Hofmeister: The Issue of Low Oil Price has Nothing to Do with Shale
John Hofmeister, the outspoken former president of Shell Oil Company and current chairman of Erin Energy, talked to Oil & Gas 360®’s Angie Austin about the politics of the Middle East creating a long-term effect on global oil, the importance and future of the shale boom and the upcoming U.S. presidential election.
This is the most difficult period I can remember in the oil and gas industry in the U.S. It is testing the will and genius of everyone in the industry,” Hofmeister told Oil & Gas 360®.
John Hofmeister, former President of Shell Oil Company, speaking in a video interview with Oil & Gas 360’s Angie Austin at the 2016 EnerCom Conference.
Global Oil Politics
“Shale is essential to the global oil picture. I don’t accept any of the nonsense that Saudi Arabia is trying to shut down U.S. shale.
“The Saudis, the Russians and the Iranians [are] continuing to ship money with every barrel of oil they produce, [money] that otherwise could and should be spent on running their countries. Somewhere between $50 and $70 per barrel is being shipped out of the national treasuries of those three countries to maintain this artificial quest for market share. It is pure political pettiness and fear—let me emphasize fear—fear that the Iranians are on a mission and the Russians are helping them, and the only safety valve is Saudi Arabia trying to protect particularly the Sunni world from being devastated by the Shia world.
Source: EIA
“I admire the Saudis for what they’re doing but it’s costing them hundreds of billions of dollars to maintain this so-called ‘market share strategy’ when really they’re trying to protect the Middle East from its own self destruction. “… We will see this continue until Russia, Iran and Saudi Arabia have no money left, because they will have spent it all on so-called market share.”
Keep it in the Ground
“The people who swear by keeping it in the ground want to see an end to the oil and gas age. They will impoverish, sicken and ultimately see to it that the world’s quality of life is diminished and deteriorated … . But this notion of putting a burden on the oil and gas companies to change quickly, to think that they’re doing something immoral or wrong, that’s just not real—that’s not the way the world works. There are more people better off because of oil and gas today than who are worse off.”
U.S. Election
“Both parties need to be taken to the wood shed. We have a few months to get our act together. This country is not in a good place when 73% of the nation says we’re going in the wrong direction. … Economic growth of 1%-1½% is not enough to replace even the value that’s destroyed every quarter in terms of the aging of the housing stock, the aging of infrastructure and the aging of the educational institutions in this country. We’re not going forward.
“If the election is not about fixing, improving, solving problems, then I think there’s going to be 300 million very, very disappointed people [in this country] and several billion people ashamed of what the U.S. has just done [who are] frightened for the future of democracy.
“So I say it to both candidates—I say it to Mr. Trump and to Mrs. Clinton: you better get your acts together, because otherwise you are going to disgrace and humble this country when this country should be leading not falling into the trap that you all are leading us toward.”
