Shell's View on the Future of Oil

Joyce Naltchayan Boghosian for Newsweek

Almost seven weeks after the Deepwater Horizon incident that has ravaged the gulf and imperiled BP, other oil companies are beginning to feel the pinch of President Obama's six-month moratorium on drilling. No drilling means no revenues, but also no jobs for the thousands of rig employees drilling deepwater wells. "At this point, public perception is a critical component of what we need to do," said Roxanne Decyk, executive vice president of group government relations for Shell, speaking at an executive forum hosted by NEWSWEEK on Monday at the National Press Club. (Following are selected video clips of the event. Click here to view NEWSWEEK's executive forum in full.)

There are two main messages that companies like Shell, which is going on the offense ahead of government action, are trying to drive. One is that safety has taken a new priority for all future drilling projects. After being told by federal regulators to halt operations in the Gulf and the Arctic, executives at Shell, Exxon Mobil, ConocoPhillips and Chevron vowed before a House subcommittee yesterday that the safety lapses uncovered in the investigation of the Deepwater Horizon explosion will be considered in ongoing drilling efforts, in many cases leading to additional "safety redundancies," as the industry calls them, for projects already considered secure. For some companies, that could mean fortifying underwater equipment by placing a second blowout preventer on top of the first.

The second message is a stark reality check. As calls amplify for a turn away from oil, executives have attempted to underscore that the nation's future energy landscape won't be void of oil and other fossil fuels. "We can count on renewables to be part of the solution, but we can't count on them filling the entire gap," said Shell's Decyk.

On Capitol Hill, where a parade of oil company executives defended their safety record this week, a growing number of lawmakers want to start that transition as soon as possible. As the Senate works to craft a comprehensive energy bill to vote on in July, there are some easy first steps. "The lowest hanging fruit is increased conservation and smart grid technology," said Virginia Sen. Mark Warner, who also appeared on the NEWSWEEK panel. If it's implemented right, he said, the transition to clean new energy sources could be the biggest job and wealth creator of the next decade.

For Democrats, the talk of an energy bill is incomplete without addressing climate change and runaway greenhouse gas emissions. Warner continued his party's call to "put a price on carbon"—a sentiment President Obama has also expressed, but left out of his Oval Office address Tuesday evening.

Yet with the imperative of reaching 60 votes, it's mathematically impossible for either party to chart its own course without input from the other side. The good news, according to political strategist Susan Eisenhower, president of the Eisenhower Group, is that energy and climate have enough agreeable components—like energy efficiency, increased investment in tech research and strategic cuts in carbon emissions—to forge a deal. "Bipartisanship is often a dirty word," Eisenhower said during the panel discussion, "but if there's any issue in which bipartisanship is a must, it's in the energy field."

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