Russ: This is the BusinessMakers Show, heard here and online at the BusinessMakers.com. And now it's time for the Aflac BusinessMakers Flashback, brought to you by Aflac, ask about it at work. And for this morning's Flashback, we're going to re-visit one of our favorite discussions about the business of energy, when we had John Hofmeister, former President of Shell Oil company and now Founder and CEO of Citizens for Affordable Energy. I started the discussion by asking John to tell us about Citizens For Affordable Energy.

John: If I learned one thing as the head of Shell, during my years of rising prices and failure to address the nation's energy policy as a nation, I learned that grassroots Americans need somebody looking out for them. So I'm trying to take the energy knowledge that I have with the corporate experience that I have, the government relations engagement experience that I've had, and I want to be the voice of grassroots Americans when it comes to what is the future of energy in these United States. Energy is a broad term. It's not just about gas prices, it's about the future of electricity, the future of our environment, the future of sources of all kinds of energy and so I founded a grassroots organization called Citizens for Affordable Energy.

We predicate what we're doing on four principles. These are our so-called four mores. The first of the four mores is as a nation, we need more energy from all sources – whether it's hydrocarbons, nuclear, renewable like wind and solar and biofuels – we need more energy from all sources. We can't rule out any source at this stage because of the demands of our economy for affordable energy.

Secondly, we need more technology to drive efficiency in the use of energy. We waste a lot of energy today because of our old technology that we still employ, such as the internal combustion engine. To me, it's time as a nation, we should look beyond the internal combustion engine, which is 100 years old – only 20 percent efficient – and we ought to find new sources of power for vehicles like batteries or like hydrogen fuel cells, which puts internal combustion engines in the auto museum of history.

Russ: Okay.

John: Thirdly, we need to protect our environment and manage gaseous waste the way we manage physical waste and liquid waste. If we were not able to manage our physical waste, we as a society would be suffocated by now – we'd be drowning in it. If we didn't manage our liquid waste, we wouldn't be able to drink water because it would be poisoned by our liquid wastes that we now manage but we otherwise would put right into our water systems.

Russ: Okay.

John: So I think if we learned how to manage physical waste; we've learned how to manage liquid waste; I think it's time that as a society, we manage gaseous waste. I don't really get into the discussion of climate change or global warming because I don't know. I'm not a climatologist or a scientist of the climate but I do know that we're putting nasty, dirty, gaseous waste into the atmosphere that we create. I think we ought to deal with that.

Fourth is we have to build infrastructure to move energy from where it's produced to where it's consumed. If we don't build more transition lines, liquefied re-gasification terminals, more nuclear plants, more clean coal, more clean coal with carbon sequestration – all of this infrastructure to assure our future energy supplies – we're hurting ourselves. So affordability for citizens is premised on knowing what people need to know. We're simple, we're basic, we're web-enabled Citizens for Affordable Energy.org is our website and I'm convinced that if we practice these fore mores, we'll be successful and if hundreds of millions of American citizens recognize these four mores, they'll take care of public policy because they'll say to their elected officials, get with the program 'cause right now, we're not with a very good program at all.

In fact, I go on to say if we stay on our current course, within ten years, we won't have enough energy. We'll be standing in gas lines; we'll be rationing gasoline; we will have brownouts, blackouts like we've never seen in this country because the system is unable to keep up with what the demand of the future looks like on the course that we're on.

Russ: There just seems to be an abundance of misinformation out there.

John: Well there's a problem in this country with political partisanship in which we divide everything into right-wing movements or left-wing movements and the middle of America, the big centrist bell curve of America, is missed by the right wing and left wing. So my message is neither right wing nor left wing. If we leave energy to the right wing, we'll destroy the earth. If we leave energy to the left wing, we'll destroy society because neither extreme has a set of solutions that will work and what is politically correct is pragmatically impossible. And so political correctness is not gonna solve the day.

Russ: Whoa, Political Correctness is not going to solve the day. Later in the discussion, we moved to the topic of the role of supply and demand on pricing and John's comments on this subject quickly led to his emphasis on affordability, and his feelings that public policy has more to do with high prices than does supply. Check this out.

John: I believe that the principal of affordability of energy fits directly in line with the principal of social equality in our country. We cannot have energy haves and have-nots and continue to be a pluralistic country and society built on the principal of equal opportunity and the notion that we artificially make energy expensive by making it scarce because of manmade public policy is something I abhor. So, for example, there was absolutely no reason on this earth that this nation had to pay four dollars, plus for gasoline in 2008. It was all about harmful public policy, which prohibited the development of US domestic natural resources, such as oil and gas, when for 30 years, 85 percent of the outer continental shelf of this country was off limits for exploration and production of new oil and gas finds.

That's a manmade policy. I understand environmental sensitivities and I care deeply about how and what we drill, where we drill but the fact of the matter is, as Americans are complaining about high prices, our Congress is blasting away at the oil companies as though they are the problem. The problem is bad public policy and our Congress would not admit it. And so even the President at the time, President Bush, for seven and-a-half years of his administration, he had a presidential moratorium on exploring in areas that were off limits. It wasn't until seven and-a-half years into his term, and we're now into the 2008 election cycle, that he withdraws the presidential moratorium.

So we're paying too much for gasoline because of public policy. Electricity costs, skyrocketing, because we're not building new power plants. In the past five years, more than 100 coal-fired plants have been shelved. We haven't built a new nuclear plant in this country in almost 20 years and they only have a 30-year to 40-year lifespan. So we're about to have to shut down dozens, if not a hundred nuclear plants in the course of the next 10 to 20 years because we haven't built any new ones, unless we re-commission them, which is a very elaborate, long, drawn-out exercise. So we are causing electricity prices to rise by failing to invest in our infrastructure because of man-made reasons. This country has more energy than it can ever use. We're just not allowed to produce it.

Russ: From there we went to our Federal Government's attempt to force so called cleaner fuel through corn ethanol.

John: What a waste of taxpayer money to use food products to make fuel products so that society suffers from rising food prices so that we can taxpayer-subsidize fuel which only is commercial if the taxpayers pay 45 cents a gallon. What many people don't realize with corn ethanol is that if it wasn't for the 45 cents a gallon of taxpayer subsidy, nobody would produce it because it's not commercial.

Russ: Oh, and I understand even the carbon emissions from corn ethanol, when you look at the life cycle, was higher than fossil fuel.

John: I think there's a lot of evidence that says that. I think I – in my own analysis it comes out about neutral but it means we're not gaining any ground.

Russ: Right.

John: Because it's a flawed product. It has 25 percent less efficiency than gasoline. There are other biofuels that have efficiency equal to gasoline – that's what we ought to pursue. Not biofuels that are less efficient than gasoline.

Russ: Right.

John: Particularly when the taxpayers' the one payin' the bill.

Russ: Let's say that all the governments in the world got together and decided that you knew exactly what you were talkin' about and said, "Let's just make John Hofmeister Energy Czar for the planet," what would you do?

John: Well, I'd come right back to the four mores that we started talking about in the beginning. Let's keep in mind – of all of the eight or so billion people in the world, only about two billion have the kind of lifestyle and energy supply that US citizens are accustomed to. About three billion people have just enough energy to get by but not enough to enjoy personal mobility, not enough to have a range of appliances and light or heating in their homes, or air conditioning. And there's over two billion people that don't have any energy at all, except wood or charcoal or dung. So if you look at the world as a whole, most of the world, five out of eight billion people, do not have what we have in America or the Europeans have in Europe or the Japanese, let's say, have in Japan. Why not? They should. They should enjoy the fruits of life of this earth and so there's a whole market out there for more energy. I believe that there is a supply system that can be created that is clean, efficient and sustainable that takes into account all forms of energy production, from nuclear, to hydropower, from geothermal to hydrogen, to biofuels, to hydrocarbons, including coal and gas and oil, solar, wind – all of the supplies of energy are possible and I think with a coherent, managed 10-, 20- 30-year plan, you could do all the above from a supply side. So I think there are solutions where eight billion people on this earth can enjoy the fruits of energy, the blessings of energy, the economic progress of energy and we can do it in sustainably clean ways.

Russ: Okay, and that concludes our review of The BusinessMakers Interview with John Hofmeister, former President of Shell Oil Company and now Founder and CEO of Citizens for Affordable Energy. To hear the whole interview including a WebXTRA with John Hofmeister, go to TheBusienssMakers.com and enter Hofmeister in the Search Box. And that wraps up this morning's Aflac BusinessMakers Flashback brought to you by Aflac Ask about it at work. Stay tuned in for our Featured Guest interview with Bob Schwartz of Energy Ventures. You're listening to The BusinessMakers Show heard here and online at TheBusinessMakers.com.