Hess Corp.’s chief executive last week warned of an impending energy crisis and urged policymakers to formulate a comprehensive energy policy that would put the United States on solid footing.

The Obama administration and lawmakers in Washington, DC, “must set a strategic vision for our country to follow,” CEO John Hess said in a keynote speech at IHS Herold’s 20th Annual Pacesetters Energy Conference in Stamford, CT.

“The U.S. is in desperate need of an energy policy. It’s fundamental to our economic growth, our environmental sustainability and obviously our national security,” Hess said. “If political leadership is going to do what’s right, they’re probably going to have to do some things that are going to make people sacrifice in the short term for a long-term benefit. We can no longer pursue narrow, short-term political agendas.”

U.S. energy policies should be focused on “moderating demand and increasing supply.” Investing more to build oil and gas reserves and to construct infrastructure are imperative, he said.

“An energy crisis is on its way and is likely to be triggered by oil,” said Hess. “We are not investing enough.” Energy shortfalls would “probably be triggered by [a lack of] oil” because global crude oil production won’t keep pace with demand growth in developing countries. When oil prices exceeded $140/bbl in 2008 it “was not an aberration, it was a warning.”

Policies should be in place that encourage U.S. drilling onshore and offshore, said the Hess chief.

To capitalize on abundant domestic natural gas reserves, Hess said policies should encourage the use of gas as a baseload feedstock in power generation. He noted that a 1,000 MW gas-fired plant takes two years to build and costs $1 billion, while a 1,000 MW coal-fired plant takes three years to build and costs $3 billion.

Meanwhile, coal use should be reduced “until we can find some research breakthrough that makes ‘clean’ coal commercially viable.” Carbon capture and storage is “technically feasible” but it is still “economically prohibitive.” Alternative energy sources also have their place, said Hess.

“Renewable energy is needed and should be encouraged to meet future energy demand and reduce the carbon footprint,” but as global demand continues to escalate, fossil fuels will continue to be the mainstay of the world’s energy supply. “Renewable energy does not have the scale, time frame or economics to materially change this outcome.”

There should be investments made in alternative energy sources, Hess said. However, the short-term prospects for renewables to supply a substantial share of the world’s energy are dim.

“If one day there’s a technological breakthrough, fantastic. But let’s not bank on it.”

The oil executive acknowledged that the energy industry hasn’t told its side of the story as clearly as it should. Recent accidents, such as the Macondo well blowout in the Gulf of Mexico and nationwide gas pipeline explosions, have eroded the public’s faith in the oil and gas industry.

“The industry itself needs to regain the public trust,” Hess told the crowd. “Those companies that have those safety problems need to be brought to task and be held accountable for them. In some cases, increasing regulatory oversight is appropriate.”

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