John Hofmeister, former president of Shell Oil, predicts that unless we act now, within ten years this country will slide into an "energy abyss"
It's a scary prospect. According to Mr. Hofmeister, we will be confronted with much higher energy prices, electrical brownouts and blackouts, shortages of liquid fuels and stunted economic growth - not as temporary inconveniences, but as a way of life.
Mr. Hofmeister (for whom I had the honor of writing speeches when he was at Shell) sketches this grim scenario in his new book, Why We Hate the Oil Companies - Straight Talk From an Energy Insider. A political scientist as well as an energy executive, he is uniquely qualified to analyze our current energy policy quagmire and to suggest a way out.
According to Mr. Hofmeister, the crux of the problem is that energy executives and politicians live in different time zones. New supplies of oil are not brought to market by turning on a spigot. Permits must be acquired, regulations met, capital raised, pipelines and other infrastructure built and wells dug before a drop of new oil is produced. Consequently, energy executives must think in terms of decades.
Politicians, in contrast, think in terms of two-year election cycles. Often, they think no further than the next public opinion poll or the nightly news. Because they are obsessed with getting themselves re-elected, they pay little heed to the long-term consequences of the policies they champion in order to look good at any given moment.
Endless bickering between the politicians and the energy industry, fanned by extremists on what Mr. Hofmeister terms the "reckless right and the ludicrous left," hamstrings constructive efforts to meet America's long-term energy needs. So we continue to drift toward the energy abyss. Mr. Hofmeister points out that since the Arab oil embargo in the early 1970s, eight U.S. presidents and 18 U.S. Congresses have committed this country to "energy independence" and we haven't achieved it yet.
To break the policy gridlock, and to formulate realistic, long-term energy solutions for this country's future, Mr. Hofmeister puts forth what will likely strike many Americans as an impossibly radical solution. He proposes the creation of a Federal Energy Resources Board.
Modeled after the Federal Reserve Board, his proposed Federal Energy Resources Board (FERB) would consist of a board of governors appointed by the president for 14-year terms, subject to confirmation by the Senate. Also like the Fed, the FERB would be assisted by regional boards that would take account of the differing energy needs and resources of the different regions of the country.
Mr. Hofmeister admits that skeptics of big government are likely to "choke" on such a proposal. In reply, he notes that we already have massive government regulation of the energy sector, and it doesn't work. Why not try a big government solution that might succeed? Moreover, he sees no reason why private energy companies shouldn't continue to flourish under a Federal Energy Resources Board, just as private financial institutions flourish under the Fed.
Mr. Hofmeister is a realist. He understands that the energy sector is already under the control of a mass of federal and state regulatory agencies, and congressional and state legislature committees. He is aware that none of barons in charge of these fiefdoms will yield power willingly to the kind of super-authority that he has proposed. But he is convinced that a national grassroots movement could ultimately bring about such a change. Toward this end, he has founded the non-profit Citizens for Affordable Energy, based in Houston, Texas, [...].
The philosopher Nietzsche once said that when you stare into an abyss, the abyss stares back into you. John Hofmeister has taken a fearless look into America's energy abyss, and has come back with some tough, honest and sensible proposals to avert catastrophe. His book deserves widespread and thoughtful reading.
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