Former Shell President Says Big Oil Needs No Subsidies
While oil companies raked in record-breaking profits in early 2011, the rest of the world floundered to scrape together enough money to fill up their gas tanks to drive to work and make ends meet. Oil companies in the U.S. receive enormous tax breaks every year to the tune of billions of dollars, and outraged citizens feel that if they have to pay such high prices, then Big Oil should not be subsidized. Yet, the U.S. congress failed to pass legislation this spring that would have put an end to such subsidies. Now, one former oilman is standing up to tell the plain truth… that nowadays, Big Oil needs no subsidies.
Former President of Shell Oil, John Hofmeister, has been very vocal about the fact that the oil industry’s days of relying on subsidies are over. “The fear of low oil prices drives some companies to say that subsidies should be sustained,” Hofmeister says. “And my point of view is that with high oil prices such subsidies are not necessary. [However] if prices revert to very low levels, it may take such subsidies to keep drilling.”
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According to Hofmeister, oil companies only need subsidies when the price of oil is below $70 a barrel. Up until a few years ago, subsidies were justified. But from 2007 to 2008, in the time leading up to the global financial crisis, crude oil price skyrocketed well above $70 a barrel for the first time, then almost immediately dropped after the economy crashed. Since 2009, the price has crept back up and remained above Hofmeister’s $70 a barrel level.
Interestingly, Hofmeister argued this same point in congressional hearings in 2008 while still heading Shell Oil. “In the face of sustained high oil prices it was not an issue—for large companies—of needing the subsidies to entice us into looking for and producing more oil,” he recollects.
John Hofmeister served as Shell’s president from 2005 to 2008. As president, Hofmeister launched an extensive outreach program focused on addressing global energy challenges. Through the program he led over 250 Shell leaders on a 50-city tour across the U.S. and met with over 15,000 businesses, community and civic leaders, policymakers and academics to discuss bringing affordable energy solutions to the U.S. and the world at large. He now serves as chief executive of the non-profit association Citizens for Affordable Energy, a U.S. energy security
public policy education firm. His new book, “Why We Hate the Oil Companies,” explains the oil industry from an energy insider’s point of view.
Hydrostor receives $4m funding for A-CAES facility in Canada
Hydrostor has received $4m funding to develop a 300-500MW Advanced Compressed Air Energy Storage (A-CAES) facility in Canada.
The funding will be used to complete essential engineering and planning, and enable Hydrostor to plan construction.
The project will be modeled on Hydrostor’s commercially operating Goderich storage facility, providing up to 12 hours of energy storage.
Hydrostor’s A-CAES system supports Canada’s green economic transition by designing, building, and operating emissions-free energy storage facilities, and employing people, suppliers, and technologies from the oil and gas sector.
The Honorable Seamus O’Regan, Jr. Minister of Natural Resources, said: “Investing in clean technology will lower emissions and increase our competitiveness. This is how we get to net zero by 2050.”
A-CAES has the potential to lower greenhouse gas emissions by enabling the transition to a cleaner and more flexible electricity grid. Specifically, the low-impact and cost-effective technology will reduce the use of fossil fuels and will provide reliable and bankable energy storage solutions for utilities and regulators, while integrating renewable energy for sustainable growth.
Curtis VanWalleghem, Hydrostor’s Chief Executive Officer, said: “We are grateful for the federal government’s support of our long duration energy storage solution that is critical to enabling the clean energy transition. This made-in-Canada solution, with the support of NRCan and Sustainable Development Technology Canada, is ready to be widely deployed within Canada and globally to lower electricity rates and decarbonize the electricity sector."
The Rosamond A-CAES 500MW Project is under advanced development and targeting a 2024 launch. It is designed to turn California’s growing solar and wind resources into on-demand peak capacity while allowing for closure of fossil fuel generating stations.
Hydrostor closed US$37 million (C$49 million) in growth financing in September 2019.