Shell Oil President, Marvin Odum Talks Rising Gas Prices

SUSIE GHARIB: Despite rising prices at the pump, a new study says the energy sector
could become a huge economic driver this year. IHS (NYSE:IHS) Cambridge
Energy Research Associates says the sector grew more than three times the
overall U.S. economy last year. Diane Eastabrook is in Houston where oil experts from around
the globe are talking about energy security and fueling the future — Diane.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Susie, much of the growth the industry has been enjoying over the past few years has been because of natural gas. Shell Oil is the world’s second largest oil and gas company. Today, I have a chance to talk to company president, Marvin Odum. He
started our conversation by telling me how shale gas in the U.S. has
literally transformed his business.

MARVIN ODUM, PRESIDENT, SHELL OIL CO: It was only a few years ago
that in North America and the U.S. primarily, the question was around how
many regasification terminals should we build so that we can bring natural
gas into this country from other parts of the world.

There’s been so much gas found with new technology in the U.S. and in
Canada, that now the question is: should we be exporting gas or not? And
that’s a political debate still happening and will happen over the next
several years, I presume.

EASTABROOK: You have liquefied natural gas terminals all over the
world, but none in the U.S. Are you planning to build it here in the U.S.
anytime soon?

ODUM: Probably the largest LNG — of the international oil and gas
companies, we’re the largest LNG player out there on a global basis. And
so, we look at the North American market and we say the fundamentals are
here for liquefied natural gas export to other parts of the world.

Now, we think that likely happens first in Canada because Canada, you
know, needs less of that natural gas itself. It’s primed, if you will, for
export because the amount of resources that have been found in the U.S. are
pretty astounding as well.

So, I think the real political debate will be: do we export liquefied
natural gas from the U.S.?

But Shell is definitely looking at those projects, evaluating those.
We’re pushing very hard on one in Canada. And we’re considering that in
the U.S.

EASTABROOK: There’s been opposition to drilling for natural gas in a
lot of states. Is that still going to be a problem, you think going

ODUM: It is a problem and it’s a valid problem, because I think
there’s a lot of very real concerns out there about what does this type of
development do to water, ground water sources, quality of water, what does
it do in terms of air emissions?

Now, I think those are — those are growing pains, because when you
get down to the science and the facts, and a real explanation of how this
business ought to be developed, you get pretty quickly to a comfort level
that those issues are OK, and we can deal with those issue if we do this
the right way.

GHARIB: There’s been a lot of chatter during this presidential
primary season about the United States becoming energy independent. In
fact, just last night, when Newt Gingrich won the Georgia primary, he
talked about the United States becoming more energy independent.
Do you think that is likely to happen in the foreseeable future?

ODUM: Totally independent? I don’t know if it can, and I’m not sure
that’s actually the goal. But can we make an enormous dent in the amount
of energy that’s imported into this country — and by an enormous dent, I
mean make more of it ourselves and get all the benefit that go along with
that — the jobs, the improvement in our trade balance, the security of
supply and so forth. And the answer to that is absolutely yes.

So, does that mean over time replacing half of our imports or three
quarters or, you know, in the stretch case , even a hundred percent?
Maybe. We need to pursue that opportunity now because it is an enormous
opportunity for this country.

EASTABROOK: Oil is still a huge part of Shell’s business here in the
United States. In fact, Odum told me later this year, the company plans to
start a new project just off the coast of Alaska.

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