Fmr. oil exec: $5/gallon gas a 'serious problem'

>> let me bring in john, former ceo of shell oil usa and now the cee of citizens for affordable energy. it's good to see you. and, in fact, i've got to give you kudos, in 2010 you predicted we would see $5 gas in 2012 and now a lot of other experts are saying this same thing. i guess what the afternoon consumer wants to know is there anything that can stop this train?

>> well, we're actually in unchartered waters. that's the problem. and that's why the volatility and the prediction of high prices is so logical. what's different is -- well, what's the same. we have failed to make decisions on increasing domestic production. not just president obama but presidents before him have not made the difficult choices of expand doing most tick production to be more self-reliant. the unchartered piece is unprecedented in history is asian demand for ever more oil products. china bought 20 million new cars last year. these are new consumers, not repeat consumers. so that's an expansion in demand. in addition, the geo politics in the middle east has a psychology of fear about future of supply has probably never been greater and we just don't know from week to week how bad it could get. in addition to that, on the east coast we just closed three domestic refineries, or are in the process of closing. put that huge population on the east coast more dependent upon imports from a broad which could be more expensive on bread prices rather than west texas prices. these things are combining to make it very uncertain with the solution being more domestic production which we don't seem able to commit ourselves to.

>> and without that, i guess the question is what are the suspects. michele bachmann was criticized to saying if she was president, she would lower prices to $2 a gallon. can any president do anything to significantly reduce gas prices ?

>> not in the short term, chris. that's the problem. i said to senator obama in 2007 to him personally, if you don't do an aggressive drilling program in your first material you're going to have to worry a lot about the gas price in 2012 . she said we're going to be biofuels. i said there won't be enough biofuels to make a difference. here we are. we didn't have an aggressive drilling program and he could well face how to explain $5 gasoline as he runs for his re-election. i think that's a serious problem for him.

>> is there anything in this current political climate that you see that could happen that at least would move us in the right direction, in your perspective?

>> well, the only solution in the short term is, as the prior speaker said, drive less. so that the impact on the disposable income in the afternoon family's pocket book is not so serious. demand instruction is the way of lowering prices in the short term. that denies people the pleasure of driving or the need for driving. that's not a solid way forward . we can't just rely on efficiency and nonuse because that's not who we are as a people. we don't have public transportation to speak of. we have a society that lives out from the urban core, not in the urban core. making mass transit very difficult as a solution. more efficient cars help, of course, but again, it's the out of pocket expenditure that people make at the pump that denies them the opportunity to buy other things. larger economy.

>> john hofmeister, we are out of time, fascinating conversation. thank you so much.