Peak Oil is You

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Page added on July 30, 2006

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Q&A: John Hofmeister, president, Shell Oil Co.

Q: What is the greatest threat to U.S energy security today?

A: There is no single threat to energy security. As global demand for energy keeps growing, supply disruptions, access to untapped oil and gas supply and energy efficiency will all be challenges that confront us.

But, I firmly believe that we can secure energy supply in the U.S. and improve the prices that we pay for it. Access, diversity of supply and managing demand will all play vital roles.
Q: Gasoline appears to be hanging around $3 a gallon in the U.S. Why is it at this level and what factors could push it higher in the next year?

A: Shell recognizes that rising fuel costs affect our customers, but very simply, supply is just keeping up with demand. And that’s what’s driving up prices.

Worldwide demand for oil has increased rapidly in recent years, led by the growth of the economies in places like China and India.

While the overall supply of crude has also increased, it has not kept pace with demand. A lot of people suggest crude prices are being elevated by geopolitical tensions and, possibly, by financial speculators. To whatever extent those factors do exist, they’re beyond our control. We must deal with the market as it is, and in this regard, supply and demand prevail.

Houston Chronicle

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