Back to issue home page

According to AAA, the average price of a gallon of regular gas nationwide on Feb. 18 was $3.02, up from $2.25 a year ago. Putting pressure on crude prices are a number of factors, from turmoil in Nigeria and the Middle East to Venezuela's recent threat to cut off petrol supplies to U.S. oil giant ExxonMobil Corp. BusinessTN recently contacted Jimmy Haslam, CEO of Knoxville-based Pilot Travel Centers LLC, the nation's largest travel center operator, to discuss the energy situation in America.

BTN: What is your view of America's current energy plan?

Jimmy Haslam: Now is the time for our country to get serious about a true national energy plan. If we want to continue to grow our economy and provide jobs for our children and grandchildren, this plan must encompass all sources of energy and be focused on long-term solutions. Our energy challenges are daunting as U.S. energy demand is growing at 2% to 3% per year while world demand is growing at 5% to 6% per year. The International Energy Agency estimates that worldwide demand will increase by 60% in the year 2030. We must work on both conservation and on supply.

BTN: Has Congress failed in addressing this issue?

Haslam: Congress' recent actions on the energy bill focused mainly on short-term gasoline prices and alternative fuels. While both of these subjects are politically popular, they play an extremely small role in solving our long-term energy needs. If we want real energy security, we must focus on all areas of supply--crude oil and natural gas, nuclear, coal, and alternative fuels, and we must raise mileage standards on automobiles.

BTN: What is your response to public sentiment that big oil is morally bankrupt for posting high profits while consumer prices rise?

Haslam: Following the Katrina and Rita catastrophes, the media has placed a tremendous amount of emphasis on gasoline prices and oil industry profits. We all must understand the role that "Big Oil" plays in the global energy picture. Oil companies such as Exxon, BP, and Chevron now control less than 20% of the world's proven oil reserves. The vast majority of the crude oil in the world is controlled by national oil companies (countries). The prices of crude oil, gasoline, and diesel fuel are set by worldwide demand. It is true that Exxon and other oil companies are reaping record profits. Policies must be developed to offer incentives to these companies to re-invest in exploration and production of more crude oil and expanding and/or building new refining capacity in the United States. They should not receive tax breaks for stock buy-backs or large dividend payouts. We must send a clear signal to the petroleum industry that they must continue to reinvest heavily in increasing our nation's long-term supply. Sixty-three percent of our nation's energy comes from crude oil and natural gas. If we can increase that by 5%, that would raise our overall energy supply by 3%. To put this in perspective, 6% of our energy needs comes from alternative fuels. We would have to increase this by 33% to net a gain of 2%.

BTN: What about drilling for oil on American soil?

Haslam: We must open up new areas of our country for exploration of crude oil and natural gas. Our country's proven crude oil reserves are currently 22 billion barrels. It is estimated that the Gulf Coast of the United States and Alaska contain 112 billion barrels of crude oil and 656 trillion cubic feet of recoverable natural gas. Modern technology has made the exploration, production and refining of petroleum a much safer and environmentally sound business. Consider the following: During the horrible storms of Katrina and Rita in which offshore crude oil platforms and Gulf Coast refineries were literally torn apart, the environmental impact from that damage to our coast line and ocean life was extremely minimal. Alaska is a huge state. A small portion of the state comprises the Arctic National Wildlife Refuge (ANWR), an area totaling 19,000,000 acres. Recent technological advances would limit the "footprint" of proposed exploration and production in the area to only 2,000 acres or 1/10th of 1% of the total area. It is extremely disingenuous for an elected official to say that he or she is for energy independence and not to be for opening up areas with proven reserves in the United States.

BTN: How does alternative fuels play into that?

Haslam: Our nation must once again turn to nuclear energy. TVA should be applauded for restarting the Browns Ferry nuclear reactor. The major issue with nuclear remains what to do with the spent fuel? Technology is very close to becoming a reality that would allow us to deal with this spent fuel in a much more efficient manner. This is where government must play a major role in helping to fund the research necessary to solve what we do with long-term spent nuclear fuel.

BTN: Is coal an option in your mind?

Haslam: The United States is the "Saudi Arabia of Coal." Clean-burning coal technology and coal to natural gas conversion technology is rapidly becoming a reality. The State of Illinois has more BTUs of coal energy than Saudi Arabia does crude oil! Here again, our government must continue to fund the necessary research to help us take advantage of our vast supply of coal reserves while minimizing environmental impact.

BTN: Support for alt-fuels appears to have finally hit the mainstream. Any words of caution?

Haslam: We must also continue to explore alternative fuels (which really should be called additional fuels), but we must do so in a long-term fiscally responsible manner. We cannot let the nation's farm policy dictate our energy policy. There are over 100 ethanol plants currently being built in the United States. For us to continue to put a tariff of 51 cents per gallon on ethanol coming into the United States is bad policy. Cellulistic ethanol, which takes advantage of grass versus corn (or soybeans for biodiesel fuel), is a real alternative. Once again, our government must step up and continue to fund such projects as the one that UT-Battelle is working diligently on at Oak Ridge. This type of technology will help solve the nation's long-term supply needs without impacting the price of food.

BTN: Final thoughts?

Haslam: Backing a national energy policy with such high visibility will be difficult for elected officials because of the passionate--and diverse--opinions held by their constituents. It is imperative that government work with all sectors of the energy universe--oil, natural gas, nuclear, coal, alternative fuels, etc.--to reach a long term, comprehensive policy to ensure our energy future. It is time for our leaders to introduce legislation that provides incentives for research. New tax laws are needed to encourage investment and to let the efficient private sector work. It will take political courage, not vote attracting pandering, to do what is right for America's future.

Thanks.

Back to issue home page

Email to a Friend Print-Friendly Format