Flash back to the ’70s:

For­mer oil chief warns of need for gas ra­tioning

The Washington Times Weekly - - National - BY DAVID M. DICK­SON

One of the oil in­dus­try’s most in­flu­en­tial voices on Sept. 15 called for a tem­po­rary 1970s-style ra­tioning of gaso­line in parts of the United States to help avoid hur­ri­cane-re­lated short­ages and de­clared that the Bush ad­min­is­tra­tion, the Congress and the two men run­ning for pres­i­dent have failed to exhibit the courage needed to solve Amer ica’s longer-term en­ergy prob­lems.

“We need to get a Congress that is will­ing to make some coura­geous de­ci­sions, and we need to have a pres­i­dent will­ing to make coura­geous de­ci­sions with re­spect to en­ergy sup­ply,” for­mer Shell Oil Co. Pres­i­dent John Hofmeis­ter told ed­i­tors and re­por ters at The Wash­ing­ton Times.

Mr. Hofmeis­ter, who now serves as chair­man of the Na­tional Ur­ban League, also said that Amer­ica’s cur­rent eco­nomic cri­sis is dis­pro­por­tion­ately hurt­ing mid­dle- and lower-in­come fam­i­lies.

“The econ­omy is ac­tu­ally quite weak for mid­dle- and low­in­come folks be­cause of the drain on their dis­pos­able in­come” re­sult­ing from soar­ing en­ergy, food and health care costs, he said. “Amer­ica is suf­fer­ing a lot more than is be­ing re­ported.”

Mr. Hofmeis­ter laid blame squarely on the coun­try’s po­lit­i­cal leaders, say­ing Pres­i­dent Bush un­nec­es­sar­ily waited 7 1/2 years as gas prices soared to lift a pres­i­den­tial mora­to­rium on off­shore drilling and that Congress has made only to­ken ges­tures to solve an en­ergy cri­sis that re­quires sig­nif­i­cant action.

As for the men seek­ing to suc­ceed Mr. Bush, Mr. Hofmeis­ter said he has talked with en­ergy ad­vis­ers to both Demo­crat Barack Obama and Repub­li­can John McCain and hasn’t heard a com­pre­hen­sive so­lu­tion.

Both candidates, for ex­am­ple, op­pose drilling for oil in the Arc­tic Na­tional Wildlife Refuge, al­though Mr. McCain re­cently re­versed his op­po­si­tion to most off­shore drilling and has en­dorsed a mas­sive ex­pan­sion of nu­clear power.

“Both cam­paigns have good ideas,” Mr. Hofmeis­ter said. But “this whole en­ergy set of is­sues needs a short-term, a medi­umterm and a long-term set of so­lu­tions. Nei­ther cam­paign is looking at it holis­ti­cally.

“If you are run­ning a cor­po­ra­tion, you al­ways have a short-, medium- and long-term strat­egy,” he added. “If you are run­ning U.S. gov­ern­ment, you tend to run it on po­lit­i­cal time, which is, ‘What do we have to do in prepa­ra­tion for the next elec­tion?’ ”

Mr. Hofmeis­ter sug­gested that the gov­ern­ment im­pose lim­ited gaso­line ra­tioning over the next four to six weeks, tar­get­ing re­gions where sup­plies will be re­duced be­cause hur­ri­canes have shut down Gulf Coast re­finer­ies by tem­po­rar­ily cut­ting off their power.

Mr. Hofmeis­ter rec­om­mended in­tro­duc­ing an odd­e­ven plan that he said suc­cess­fully ad­dressed shor t-ter m gaso­line short­ages dur­ing the en­ergy cri­sis of the early 1970s. Driv­ers whose li­cense plates ended in an odd num­ber would be able to pur­chase gaso­line on odd-num­bered days. He also rec­om­mended lim­it­ing the amount of gaso­line driv­ers can pur­chase.

The United States will be in “a world of hurt” for the next four to six weeks as the oil in­dus­try re­cov­ers from the dam­age from Hur­ri­canes Gus­tav and Ike, said Mr. Hofmeis­ter. The ar­eas where ra­tioning will be needed in­clude the South­east and ex­tend north­ward to­ward Den­ver, the up­per Mid­west and Wash­ing­ton, D.C., he said.

Not ev­ery­body is on board with that idea.

“It’s hard to sup­por t ra­tioning,” said Mary No­vak, manag­ing di­rec­tor of en­ergy ser­vices at Global In­sight. “We didn’t ra­tion af­ter Hur­ri­canes Ka­t­rina and Rita in 2005. Un­til we are ex­pe­ri­enc­ing some ex­traor­di­nary pric­ing, ra­tioning should not be nec­es­sary.”

The U.S. Depart­ment of En­ergy (DOE) also de­clined to en­dorse Mr. Hofmeis­ter’s ra­tioning rec­om­men­da­tion.

“It’s nor­mal for prices to in­crease fol­low­ing pe­ri­ods of con­straint — that’s what hap­pens when sup­ply and de­mand are im­bal­anced,” said DOE press sec­re­tary Healy Baum­gard­ner. “The Depart­ment of En­ergy is mit­i­gat­ing im­pacts to Amer­i­can fam­i­lies by work­ing with the EPA to is­sue multi-state fuel waivers, re­leas­ing emer­gency ex­changes from the Strate­gic Petroleum Re­serve and mon­i­tor­ing gas-price gouging.”

Mr. Hofmeis­ter also lashed out at the U.S. po­lit­i­cal sys­tem’s fail­ure to muster the courage to ad­dress the nu­clear waste prob­lem.

He lamented the “fun­da­men­tal prob­lem in Congress,” where he said it ap­peared to be more im­por­tant to fol­low the rules of the Se­nate that per­mit two se­na­tors rep­re­sent­ing 2.5 mil­lion Ne­vadans to block the so­lu­tion to the nu­clear-waste stor­age prob­lem at the ex­pense of 300 mil­lion other Amer­i­cans.

Mr. Hofmeis­ter de­cried the “lack of an en­ergy pol­icy in this coun­try for most of the last 50 years,” say­ing Amer­i­cans be­came spoiled dur­ing the 1990s when en­ergy prices hit “bar­gain-base­ment” lev­els, when oil sold for as lit­tle as $10 per bar­rel. He stood be­hind a state­ment he made in con­gres­sional tes­ti­mony ear­lier this year as the price of oil headed to­ward $147 per bar­rel.

“$65 is a pretty good price,” he said.

Mr. Hofmeis­ter re­cently founded Cit­i­zens for Af­ford­able En­ergy, which ad­vo­cates in­creas­ing the sup­ply of en­ergy from all sources and mak­ing ma­jor in­vest­ments in en­ergy in­fra­struc­ture.

“We need a whole lot more en­ergy to sus­tain the life­style we’ve cho­sen for our­selves,” he said.

HANDS-ON: John Hofmeis­ter, for­mer Shell Oil Co. pres­i­dent, says leaders need to make “coura­geous de­ci­sions” on en­ergy.

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