Congress should follow President Bush’s lead in opening up the outer continental shelf to oil and gas exploration and seek other non-partisan solutions the nation’s urgent and substantial energy needs, an oil industry veteran tells CNBC.
“It’s an American problem,” said John Hoffmeister, former CEO and president of Shell Oil's US operations, adding that the powers that be in Washington need to “quit the rhetoric and get on to solutions.”
Hoffmeister’s endorsement of the president’s decision to lift the existing executive order barring activity in the area known as OCS comes amid heightened debate about how the US will satisfy its energy demand as crude oil and gasoline prices continue their seemingly endless ascent.
In his public comments Monday, Pres. Bush said the OSC is capable of producing ten years of oil, based on existing US output, which currently represents about one-third of the 21 million barrels of oil the nation consumes daily.
The President had previously called upon Congress to repeal legislation barring activity in those areas as well as the Arctic National Wildlife Reserve, known as ANWR, which is supposedly capably of producing about 1 million barrels a day.
Hoffmeister, who recently left the company to found the non-profit group, Citizens for Affordable Energy, also stressed that both the Congress and the President need to adopt a sense of urgency and think in “energy time,” not political time, stressing that exploration and development takes years.
“Seven to ten years is like a couple weeks to them,” he said. “This twenty looks at 25-40 year cycles.”
Critics of the President’s proposal – which includes Congressional Democrats – often dismiss new drilling because of it’s the long lead time involved.
“In real time, it will not make any material difference,“ admitted Hoffmeister, but was quick to add that such short-term thinking has helped lead to the nation’s predicament.
“For thirty years we have been denying industry the capability to expand, “ he said. Americans are paying the price of years of not wanting to increase their natural resources.”
Hoffmeister also played down criticism of the industry’s unwillingness to actively pursue existing leases elsewhere in the country, saying their prospects were low, “so you don’t drill.”