WASHINGTON, Aug. 22 (UPI) -- The president of Shell Oil said Tuesday if Americans cut their gas consumption slightly, there would be a significant drop in prices.
However, said John Hofmeister, the current political leadership refuses to actively promote conservation as an antidote to high prices, despite industry briefings that lay out the potential savings.
"If we could conserve even 5 percent of gasoline we would see in a period of six to eight weeks a significant difference in the price of gas," Hofmeister told the Infragard National Conference, a critical infrastructure protection convention in Washington. "The political leadership has chosen not to actively promote conservation. So we continue to produce to demand and that's what keeps prices up," Hofmeister said.
The effect is that the nation and world are consuming gas at almost exactly the rate that oil companies can pump and refine it, leaving no buffer of untapped reserves -- known as "supply overhang" -- in the event of a natural disaster like Hurricane Katrina or a terrorist attack on the energy infrastructure. Moreover, the unabated demand puts continuous upward pressure on the price paid at the pump.
The sharp increase in U.S. gas consumption is directly related to the popularity of gas guzzling SUVs and pick up trucks, as well as a reduction in refinery capability the occurred a decade ago and has not been restored.
Vice President Dick Cheney dismissed conservation as a viable government strategy to the nation's energy problems in a speech in 2001, when gas was reaching about $2 a gallon.
"Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy," Cheney said.
Cheney said the issue had to be addressed by increasing the supply of energy.