One of the giants of the energy business, John Hofmeister, sat down with me for this week’s episode of the Pickens Podcast. In addition to being the senior executive for Shell Oil in the United States, John has held key leadership positions at General Electric, Nortel and AlliedSignal (now Honeywell International).
John Hofmeister believes that world oil prices will be $80 per barrel by the end of 2016 and will be at or near $100 per barrel by the end of 2017. He thinks India, China, and the African continent all need to use oil to grow their economies.
At the same time, Russia, Saudi Arabia and other OPEC countries are “going broke” by over-producing to try and force the U.S. out of its leadership position. “People say it only costs $5 per barrel for the Saudis to produce,” Hofmeister said, “but that doesn’t include all of the costs of supporting its people including the people it needs to import to actually do the work.”
Hofmeister shares with us his top three energy-related goals:
1. Start a North American Energy Alliance under NAFTA. Mexico has oil, but needs our technology. We can trade technology for favorable oil prices.
2. More natural gas for heavy duty trucks and also look to LNG and other natural gas-derived liquids for POVs: Cars, light trucks, and SUVs.
3. Have politicians stop thinking like politicians. A political timeline is 2 years – until the next election. A typical energy timeline is 30 years. Politicians have to recognize the need for long-term thinking as regards energy.