ConocoPhillips pushes diversified energy policy
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Oct 31 - McClatchy-Tribune Regional News - Jason Womack Tulsa World, Okla.
The energy issue in the U.S needs to be addressed through policies that encourage alternate energy sources, conservation and efficiency, a ConocoPhillips executive said Tuesday.
James L. Gallogly -- executive vice president of refining, marketing and transportation -- stopped in Tulsa to discuss U.S. energy policy with civic and business leaders during what he called a "conversation about energy."
Houston-based ConocoPhillips is the third largest integrated energy company in the nation, based on market capitalization, oil and gas production, and reserves. It is the country's second largest refiner.
"We need energy diversification," Gallogly said in an interview with the Tulsa World.
The executive contended that the U.S. requires a variety of energy sources including oil and natural gas, but that the mix also requires wind, nuclear and solar power.
"We can do better," he said.
Gallogly said the U.S. demands about 25 percent of global oil production, a percentage that will continue to climb over the next several decades.
The demand for oil in the U.S. is expected to increase by 40 percent over the next
20 to 25 years, Gallogly said. And global demand will continue to rise as appetites for oil in India, China and other foreign countries climbs.
ConocoPhillips can explore for oil and natural gas in only 7 percent to 10 percent of the world without partnering with a foreign entity. Much of the areas open to the company are in the U.S. and Canada, Gallogly said.
The company is also active in marketing ethanol, which Gallogly said will represent 5 percent of the fuel supply in five years.
But he said ethanol is not the only answer, and companies need to continue investing in research.
"Most people will say that corn is not the answer," Gallogly said. "It takes a lot of energy to turn corn into ethanol."
"Some people say that it is more consumptive than the energy it creates."
Ethanol is a fuel derived from starch crops and blended with gasoline. Both QuikTrip Corp. and Murphy's USA stations sell gasoline blended with as much as 10 percent ethanol. However, the blended fuel is not sold at Phillips 66 stations, a retail arm of ConocoPhillips.
"We are putting it where it is most economical," Gallogly said.
Ethanol is difficult to pipe and must be transported by rail car or truck. Gallogly said "there are moments in time" when ethanol makes economic sense, but the fuel can be expensive to provide to the customer.
ConocoPhillips is working to make fuel from animal byproducts and switchgrass.
The company is also working to reduce emissions at its refineries across the nation, reducing some by as much as 70 percent over the next five years, Gallogly said.
He added that ConocoPhillips works hard to provide a fair product price. During the third quarter, its refineries operated at 97 percent.
But earlier in the summer, an increase in demand coupled with a weak dollar caused fuel prices to spike, he said.
Over the last several weeks, oil has traded near record levels and in recent days has topped $90 a barrel.
Gallogly said the company does not control the price of oil.
"When prices get that high, people get really angry at us," he said.
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