The price of U.S. light, sweet crudefell toward $93 a barrel Friday, and is on course to drop 5 percent this week, which would be its biggest decline since early May. In April, crude traded as high as $114.66 a barrel.
As the world demand is projected to grow in countries such as China and India, Hofmeister expressed concern over the ability of the U.S. to meet its own oil demand.
"If we don't do something in the U.S. to look out for ourselves, we're in a serious world of hurt in terms of getting access to more domestic production because we're going to consume it," he said.
He cited a trio of big Northern Hemisphere oil reservoirs that he thinks are in serious trouble and face further decline, including Venezuela, the Gulf of Mexico and Mexico. In addition, Libya is "out of commission" and the OPEC overhang is "all but used up," Hofmeister said.
Hofmeister added that he sees potential in natural gas and using methanol as liquid fuel in addition to ethanol and crude oil to meet U.S. energy demands.