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Video: Ex-oil exec: Cleanup remedies ignored

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    >> anne thompson , thank you. so is enough being done to stop the leak? the former president of shell is with us and he is the author of "why we hate the oil companies -- straight talk from an energy insider." good morning. is enough being done at this point?

    >> i think bp has a crisis planned. they're following the different steps of the plan. they're going to try every possible solution.

    >> is it a smart plan though?

    >> i think smart -- the fact that the blowout happens says something went wrong. but you plan for these crises just in case. i think it is a smart plan in the sense that it has a variety of options. the options are all different. everyone in the industry knows that the ultimate failsafe plan is to really do the relief drilling , get down to the base of the reservoir, re-cement the pipe that's carrying the oil out of the reservoir.

    >> they are in the process of creating that relief well now but that's going to take leaks.

    >> that's the problem. it is a slow process. i think the whole industry is wondering what in the world happened to that blow-out protector . there are 30,000 wells in the gulf of mexico . every one of them had to be drilled, every one of them had a blow-out protector .

    >> but the fact that it was defective, does that speak to the company at all and its responsibility here?

    >> of course it does. a company is responsible for making sure that the equipment that they're using is operational. and if it's not operational, to make the hard decisions of what to do about what's not working.

    >> they're talking about this top hat , this small containment home, top hat , pinning all their hopes on that right now. what's the success rate of that in the past?

    >> this is all new territory. what happens with the temperature, the pressures, the forces that exist at 5,000 feet. most people just can't comprehend. so you really have to do your calculations very carefully if it is going to work at all. they have to try it though.

    >> they have actually -- bp has actually reached out to the oil industry and said, have you got any ideas ? send them our way. and you did send them a possible solution. what was it?

    >> i'm very worried about the spreading of the slick on the top of the surface. i had the opportunity to meet a few engineers at the offshore technology conference who came forward with experience from another part of the world. the arabian gulf where a huge spill took place some 20 years ago. it was such a large spill, larger than anything we've seen in this country , ever, that they actually deployed super tankers to skim the surface of the ocean. by skimming the surface of the ocean with these huge super tankers in formation, they could collect massive quantities of oil, off-load it, come back out, collect more, and actually the report from these engineers is they had a very clean, clean-up taking place .

    >> why didn't we ever hear about this?

    >> well, the press is not exactly open in that particular part of the world, and it is a spill that was huge but never reported.

    >> and you mention this to bp . what was the response?

    >> they were looking into it. i don't know where it went from there. of course, this is also something the coast guard could decide to deploy, the interior department . we're just trying to get the message out there that maybe there is a remedy that hasn't been tried, putting chemical dispersants on the surface of the ocean is not a good thing for sea life .

    >> you say there is a negative effect here, what they're doing is making the problem worse.

    >> it solves one problems but creates another which i think potentially makes it much worse. if we can get super tankers in place to skim the surface, they have the equipment and the capacity, and in the scheme of things, 5,000 barrels a day relative to huge super tankers is not a huge amount of oil.

    >> there's been a lot of criticism, in general , about the lack of federal oversight when it comes to the oil industry and the drilling offshore. you were in the business, you were in big in the business. is it a case of the oil industry basically the fox guarding the hen house ?

    >> i never thought of it that way. i always respected what the regulators had to say. the experience in the industry is so technical, it is so well developed, that people who work in government may not have the expertise, but they have the authority. and it was my position, and my company's position, that we don't run the industry . we work for according to the permits, the regulations and so forth, and try to make sound judgments in that regard.

    >> quickly, all the finger pointing that we saw in washington , d.c. over the past couple of days, shameful?

    >> it's not productive. it's just not productive. i think having hearings on a preliminary basis like this may be good for congress , but we're frustrated because we don't have answers to the questions that are being asked. when documents get produced that haven't been reviewed and somebody has to respond to a document they've never seen before, that's setting somebody up for a pretty difficult exercise. i've been there. i've been through that process. it is an ugly way to try to get answers. it's better if we can do the investigations and then in a timely way and reveal what we know when we know it.

    >> john hofmeister, thank you. 7:10. now back to matt in

TODAY books
updated 5/13/2010 7:52:53 AM ET 2010-05-13T11:52:53

As president of Shell Oil, John Hofmeister was known for being a straight shooter, willing to challenge his peers throughout the industry. Now, he’s a man on a mission, the founder of Citizens for Affordable Energy, crisscrossing the country in a grassroots campaign to change the way we look at energy in this country. Read an excerpt from his book "Why We Hate the Oil Companies."

Americans have long had a love-hate relationship with the oil industry. Myself included.

Although I spent the last third of my corporate career working for Royal Dutch Shell, one of the world’s largest international oil companies, and the final three years as president of its U.S. subsidiary, Shell Oil Company, my perceptions of the industry were shaped long before I first stepped through the doors of Shell’s elegantly understated European headquarters back in September of 1997.

I started paying attention to energy policy the year Richard Nixon turned out the Christmas lights. It was 1973, and I had just started working as a management trainee at General Electric’s lighting headquarters in Nela Park, near Cleveland, Ohio. On October 20, Saudi Arabia, supported by other Arab states, cut off all oil supplies to the United States as retaliation for U.S. funding Israel in the latest Arab-Israeli conflict. To conserve energy during the embargo, Nixon asked Americans to turn off their Christmas lights. GE, of course, was in the holiday light bulb business. At the company’s campus where I worked, our Christmas lighting display was a local historic landmark. Generations of Cleveland-area families looked forward to an annual drive-through of the displays. GE made the symbolic gesture of turning off the lights to comply with the president’s request, but the real impact was that we had to lay off hundreds of local employees in a matter of months because of the drop in business caused by that government policy decision. Just down the road from Nela Park was the Gulf station on Euclid Avenue where I filled up my stripped-down 1972 Chevy Nova.

During the embargo, the station owner wore a pistol on each hip because customers were fighting over places in the gas lines and he wanted order, not chaos. Over the next 25 years, as I moved into management and executive positions at companies that were large consumers of energy, oil shocks and surpluses played havoc with business planning, and I continued to manage uncertainty around energy costs. During my 15 years at GE, we were continually buffeted by the energy waves, as prices spiked and fell and alternative forms of energy rose in favor then quickly ebbed. In 1979, when an Arab oil cutback sent U.S. gasoline prices soaring, then-president Jimmy Carter announced a huge push to create synthetic crude oil from coal and oil shale deposits in the Rocky Mountains. He projected 2.5 million barrels of production by 1990.

Three years later, oil prices had fallen, and on May 2, 1982, a day remembered in Colorado as Black Sunday, Exxon shut down its synthetic crude operation, eliminating thousands of jobs on the remote western slope of the Rockies. Over the next several years of my career I was at Nortel, a global telecommunications technology company, and AlliedSignal, a large aerospace, automotive, and engineered materials company, that later acquired Honeywell and took its name. Both companies were large energy consumers that benefited from a period of mostly low oil prices. However, when the first Gulf War took place in 1992, I was at AlliedSignal’s aerospace business, and the airline industry lost more profit that year than it had made in its entire history, due to the high cost of fuel and loss of customers. We shed some 20,000 employees in the restructurings that followed.

After 24 years on the consumer side of oil, I joined Shell. I had worked in companies that paid for the consequences of oil energy policies — or the lack of policy — and I wanted to see if it was possible to make a difference on the energy producer side. I did not have the traditional petroleum engineering or geophysics background of an energy executive — my degrees were in political science — but I had a strong global business strategic and leadership experience, a diverse background in marketing, manufacturing, and human resources, gained at top Fortune magazine-rated companies, and I believed that sometimes an outsider can provide a fresh perspective and accomplish more — or so I hoped.

What I found at Shell was a company that pushes the frontiers of technology, employs many of the smartest people on Earth, enables economic growth and development around the world, increasingly appreciates and responds to sustainable development needs, and provides solid shareholder returns. Yet it is a company in one of the most hated industries in the United States, an industry that consistently ranks at the bottom in reputation polls.

That animosity came to a head after Hurricanes Katrina and Rita hit the Gulf Coast in the late summer of 2005, just months after I became president of Shell Oil Company. Prices had been climbing for the past three years, but the serious supply disruptions caused by the storms sent prices skyrocketing. I started receiving hate mail, including a drawing showing me hanging in effigy. Not exactly what I expected when I took the job.

In June 2006, Jim Mulva, chairman of ConocoPhillips, Dave O’Reilly, chairman of Chevron, and I appeared together on “Meet the Press,” where host Tim Russert began by confronting us with a set of negative poll numbers and asking us, “Why is that?”

Excerpted from “Why We Hate the Oil Companies” by John Hofmeister. Copyright (c) 2010, reprinted by permission of Palgrave Macmillan, a division of Macmillan Publishers Limited. All rights reserved.

© 2012 MSNBC Interactive


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