EDITORIAL: Oil’s Future

By Albany Times Union, N.Y.

Aug. 13–Whatever else one might think of it — and we have our differences — the three-pronged energy plan outlined by John Hofmeister, president of Shell Oil Co., is not short-sighted. It includes medium- and long-range ideas that warrant serious consideration by Congress as it crafts energy legislation.

In our view, Mr. Hofmeister’s plan, which he outlined during a meeting with this newspaper’s editorial board last week, is strongest when looking ahead. Its weakest point is the short-term goal of expanding domestic drilling (though not in the Arctic wildlife reserve) during the next five years to meet consumer demand and offset expected shortfalls in supplies from Mexico and Venezuela. Mr. Hofmeister also supports expanding refinery capacity, and cites Shell’s plans to do just that at its Port Arthur, Texas, facility.

We don’t doubt that more refining capacity is necessary, given the tight situation today. But we remain convinced that reducing demand, not increasing supply, is the best answer to stabilizing gasoline prices. And that means higher mileage standards for all vehicles, more money for mass transit, and taking simple but effective steps like enforcing the 55 mph speed limit.

While tapping into the billions of gallons of oil under federal lands would also help stabilize gasoline prices, history shows that when prices are low consumers flock to gas-guzzling sport utility vehicles and light trucks, thereby giving Detroit little incentive to produce smaller, fuel efficient automobiles.

Mr. Hofmeister is on firmer ground with his medium-range plan, which calls for using more biofuels over the next 10 years to extend the oil and gas supply. But he wisely cautions against an over-dependence on corn-based ethanol, which would compete with a key food source and drive up prices at the grocery store. Instead, he urges greater use of cellulosic sources, such as switch grasses, which can be converted to alternative fuels using much less energy than turning corn into fuel.

Mr. Hofmeister’s long-range plan, spanning the next 25 to 30 years, would emphasize greater use of all renewable sources, including liquefied natural gas and coal gasification. Any mention of coal is sure to evoke images of a dirty, polluting fuel, but the gasification process is seen by many energy experts as environmentally acceptable.

It’s always risky to see technology as the answer to all the nation’s energy woes, of course, but it’s a fact that there has been steady progress over the years.

For example, the Gulf Coast refineries were able to withstand the battering of Hurricanes Rita and Katrina because of new shutdown procedures that prevented oil spills.

Mr. Hofmeister has his eye on the future, and that’s just where Congress should be looking. THE ISSUE:An oil executive proposes a three-part energy policy.THE STAKES:Without more conservation, success will remain elusive.

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