The president of Shell Oil can't predict whether gasoline in the U.S. will rise to an average $5 a gallon, but he told CNBC that gas is directly tied to the price of oil and "we’re going to have to see stability around the world to start to have an impact."
That means the U.S. should be producing more of its own oil and gas.
"Even though gasoline demand is fairly stable in the U.S., when you take a global view you’re seeing an increase in energy demand across the world," Marvin Odum, head of the Royal Dutch Shell unit said Friday.
"There’s a pressure on these supplies that continues," he said. "Those that look at it in the future are very concerned about where this picture is going. So producing more resources to help solve the supply side of that equation is the most critical factor."
For Shell that means more domestic oil drilling both on land and offshore. As for natural gas, currently at a very low $2.30 per million BTUs, Shell has only invested about $3 billion and is waiting for the price to come up, say to $4 per million BTUs, before it invests more in natural gas production.
In the meantime, he would like a "clear view on what our energy strategy is" from the Obama administration.
"The degrees of freedom are relatively narrow," he said. "We know we're going to need oil and gas for quite some time into the future. Just getting clear about how much we want to produce ourselves versus how much we want to import and then putting some policy in place to make sure that that happens is what we need to do."
