THE WALL STREET JOURNAL: UPDATE: US DOE Secy Sees No Quick Answer To High Oil Prices: “…Shell Hydrogen LLC will set up five hydrogen-refueling stations in Washington, New York, California and along the Eastern seaboard.” (ShellNews.net) Posted 31 March 05
DOW JONES NEWSWIRES
WASHINGTON -- U.S. Energy Secretary Samuel Bodman said Wednesday there is no overnight solution to high oil and gasoline prices.
Speaking to reporters after a hydrogen-car demonstration, Bodman also praised the Organization of Petroleum Exporting Countries for agreeing to raise production to help consumer countries replenish inventories ahead of an expected demand surge in the second half of the year.
"The price of gasoline and oil is a reflection of problems that have been decades in the making," he said.
Bodman said the U.S. needs to become more energy-efficient and make better use of alternative energy sources, including renewables, nuclear energy and hydrogen. He also said the Bush administration is working on "diversifying sources from which we seek (natural) gas and oil from around the world."
President George W. Bush "has stated repeatedly that the solution is going to include a multi-year effort, if not a multi-decade effort," he said. "The long term is the only way to deal with these problems."
Bodman's comments came on the sidelines of a National Hydrogen Association event. During the event, the energy secretary touted hydrogen cars, which run on hydrogen instead of gasoline, as part of the solution needed to achieve energy security in the U.S.
Bodman said there are still some technical challenges in developing hydrogen-fuel vehicles. He announced that General Motors Corp. (GM) and the Department of Energy have signed a five-year, $88 million deal to build a fleet of 40 hydrogen-fuel vehicles in an effort to move the ball forward. Under the program, GM will spend $44 million on fuel-cell vehicle demonstration fleets, while DOE will provide the rest.
"Having the industry pay half is a bargain for the taxpayers," Bodman said, adding that he expects hydrogen-powered vehicles to be widely available to consumers in about 15 years.
In addition, he said, Shell Hydrogen LLC will set up five hydrogen-refueling stations in Washington, New York, California and along the Eastern seaboard.
"We want to offer consumers (hydrogen) cars and trucks that perform just like today's cars and trucks and don't cost anymore than today's vehicles," he said. "Oil trading at over $50 means hydrogen makes more sense than ever before."
Crude futures on the New York Mercantile Exchange topped $57 a barrel last week but have since retreated about $4/bbl on a steady rise in U.S. crude inventories.
Although Bodman suggested alternative sources of energy as the way to combat high prices, U.S. Sen. Jeff Bingaman of New Mexico, the top-ranking Democrat on the Senate Energy and Natural Resources Committee, has asked the DOE to stop sending crude to the federal Strategic Petroleum Reserve. The senator sent a letter to Bodman last week asking him to stop filling the reserve.
A Bush administration official Wednesday reiterated the government's stance against using the SPR to combat high oil prices and said the SPR would continue to be filled until its reached 700 million barrels in August.
When asked about OPEC's reluctance to implement the second phase of a two-phase, 1-million-barrel-a-day production hike because oil prices had eased in recent days, Bodman said OPEC had "responded in a positive way" to talks he had with several ministers before OPEC's most recent meeting two weeks ago.
"These are very difficult matters to discuss and it is a challenge but i consider them to have been quite responsive," Bodman said.
-By Maya Jackson-Randall, Dow Jones Newswires; 202-862-9263; maya.jackson-randall@dowjones.com
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