Royal Dutch Shell’s executive director for downstream, Rob Routs, plans to retire at the end of this year after 37 years in the oil industry. In his last job at Shell, Mr. Routs oversaw refining as well as its oil sands and biofuels projects.

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Shell executive director for downstream Rob Routs (Shell)

Mr. Routs talked with the WSJ’s Neil King about the world’s thirst for oil, the challenges facing Detroit and the U.S. transportation sector, and where oil prices are heading.

Do you buy the argument that this last historic run-up in prices was different, and that the world has now learned its lesson and will change its behavior?

That would be a major break from the past, wouldn’t it? I am a bit cynical in that regard. The values that drive humans haven’t changed, and basically humans want transportation. And even now you see demand beginning to come back a bit. So to my mind, the cycle will continue to be there.

If the next administration is going to put some measures in to really address energy demand and conservation, then you might see some structural change. But even that is going to take some time to crystallize.

But can government hope to do that in an ultra-low cost environment like we have now?

When I look at the automakers making their desperate case, I say to myself, ‘Even if they get support from the government, how much money is going to be left over for R&D to make more efficient cars or for the new technologies for plug-in hybrids?’…I don’t see the exact drivers in place to help the U.S. become more energy efficient. The cash is not out there to help find the solutions.

What would your advice to the U.S. be to get its transportation shop in order?

Dieselization would be a good answer. It will take a while for the cars to be produced and for the refineries to change their production. But what diesel has done for Europe is really astonishing in terms of fuel consumption. Gasoline demand has been dropping very sharply, while diesel demand has been growing very slowly.
The other thing this country needs is an infrastructure that puts public transportation in place.

Looking into your crystal ball, what do you think the U.S. transportation sector will look like in 10 years?

An increase in more hybrids and more efficient cars will almost certainly cut demand for oil in the U.S. and put pressure on refineries here, leading some of the smaller ones to close down.

But it is very unlikely that the overall fleet will be much different. The average turnover of a car is at least seven years. It will take years for the overall fleet to change very much.

So what Shell work now seems particularly promising to you?

What excites me most is the marine algae work that we are doing in Hawaii. The advantage of algae is that we believe we can do it economically, and it doesn’t interfere with the food chain.

We face difficulties with biofuels wherever we look. Many countries in Europe are now starting to back off their mandates [that fuels contain a set amount of biofuel]. The whole competition between food and fuel and the arguments around those are pushing them off the political agenda. That same pressure doesn’t apply to algae.

What is it going to take for oil prices to rebound from the massive fall of these last few months?

If Saudi Arabia wants $75 a barrel oil, then OPEC is going to have to get its act together. That is the only mechanism at this point that can reverse the drop in oil prices. It is not going to be a quick pickup in consumption because at the rate that factories are closing and people are people laid off, you won’t see a quick reversal.

And the only way for the OPEC countries to balance their budgets will be for them to close their valves. These countries have built economies that can’t stand oil under $60 a barrel anymore.