Hurricanes Katrina and Rita brought US energy supply concerns to the forefront of public attention, speakers said Oct. 11 during an Ernst & Young LLP energy conference in Houston.
“People are more concerned about energy today than at any time since the 1970s,” said Red Cavaney, president and chief executive officer of the American Petroleum Institute. “When things go wrong, everyone becomes an energy expert and wants things fixed overnight.”
Lasting energy supply solutions will take years to achieve, he said.
Calling for “realistic policies and realistic solutions” to potential energy supply constraints, Cavaney said industry’s first priority must be “getting people to see through the energy fictions.”
For example, the idea that the world is close to running out of oil is an energy fiction, he said. Another energy fiction is the notion that the world could make a near-term switch to alternate fuels.
“It is simply too early to anoint the successor to oil,” Cavaney said.
ConocoPhillips Chairman and Chief Executive Officer James J. Mulva said: “The country is facing a significant energy challenge, and all of us must do our part to meet this challenge. This is both a short and long-term issue. All citizens should try to conserve energy use. We must all be proactive in improving energy efficiency.”
Hurricane season provided “a wake-up call” on energy, Mulva said. “Those outside the energy industry need to respond.” Noting that Katrina and Rita each were “once-in-every-100-year storms,” he said, “We had these two in about a month.”
Best response
Industry’s best response in the short term is to restore Gulf of Mexico production and refining operations knocked out or reduced by the storms, he said. ConocoPhillips expects its Lake Charles, La., refinery to be operating again by the end of the week. It expects limited start-up of the Alliance refinery by yearend 2005 or early 2006.
Mulva encourages oil companies to invest in traditional businesses and infrastructure as well as in new technologies. ConocoPhillips last year pledged to spend $10 billion in 5 years on its downstream operations so that its refineries can handle heavier, more-sour crude oil feedstock, Mulva said.
“The fundamental need for cooperation and partnership is as strong as ever,” Mulva said of world energy supply, adding that international oil companies can assist in providing capital and technologies.
Among measures to boost US energy supply, Mulva called for streamlined permitting, greater access to areas now off limits to drilling and production, stronger conservation, and development of critical infrastructure, including pipelines and LNG terminals.
“Industry without any question feels just as strongly about the environment as any individual,” Mulva said. “We need to be far more available, far more vocal in the general public.”
In comments to reporters after his speech, Mulva said he and other oil company executives, “need to get out in a more proactive way and tell our story, primarily to American consumers.”✦