Exxon Mobil Corp.'s CEO says the world's largest publicly traded petroleum company is not in any hurry to find alternatives to oil and gas. If anything, the company must scramble to keep up with rising global demand for fossil fuels.
HOUSTON -- Exxon Mobil Corp.'s CEO says the world's largest publicly traded petroleum company is not in any hurry to find alternatives to oil and gas. If anything, the company must scramble to keep up with rising global demand for fossil fuels.
Chief Executive Rex Tillerson said Tuesday that the company is spending the bulk of its record profits on finding and producing new supplies of crude oil and natural gas. Moreover, Tillerson said Americans should recognize that biofuels and other renewables will continue to play a small, if growing, role in the global energy supply for years to come.
On the need to combat climate change, Tillerson touted a global approach, engaging the countries that use the most hydrocarbons. Under its former leader, Lee Raymond, Exxon Mobil was a firm skeptic about the link between fossil fuel combustion and global warming. The company's position has softened under Tillerson's leadership.
Tillerson, speaking at a gathering of industry executives, academics and analysts, said his company has invested $82 billion on six continents in the past five years to search for new supplies of hydrocarbons, expand refining capacity and introduce environmentally advanced technologies.
But he said only a fraction of that investment is going toward developing alternative forms of energy such as wind and solar. In fact, he sees little his company can offer to the current push to make biofuels, or cleaner-burning vehicle fuel made from various crops.
The reason: Exxon Mobil is a petroleum and petrochemical company, and worldwide demand for its products will persist for decades. The U.S. Energy Department estimates global oil demand will rise to 118 million barrels a day by 2030, compared with roughly 85 million barrels a day in 2006.
"We're going to have plenty of things to work on, staying with what we know how to do and then evaluate other options as they progress, as technology changes, as we see areas where we have something of value to bring other than money," Tillerson told reporters after a speech at the conference sponsored by Cambridge Energy Research Associates, an energy consultancy.
Another avenue for increasing supply is opening access to more potential reservoirs in places like the U.S. Outer Continental Shelf, Dave O'Reilly, chairman and CEO of Chevron Corp., said at a dinner gathering of CERA attendees. He said technological advances in the past 20 years have allowed energy production and environmental protection to coexist.
"I believe any plan to enhance our energy security must include an open discussion of ways to increase access to domestic supplies," O'Reilly said.
Weaning Americans and the rest of the world off fossil fuels will certainly be a monumental and lengthy endeavor. At present, renewable energy sources such as wind and solar supply only about 6 percent of America's energy needs, according to the federal government's Energy Information Administration. That figure is expected to grow only to about 7 percent in the next 20 years, the EIA forecasts, meaning fossil fuels will still carry the bulk of the load.
Still, some others in the industry are investing more heavily than Exxon Mobil, whose $39.5 billion profit last year was the largest for any U.S. company.
BP PLC, which earned $22 billion in 2006, says it plans to spend $8 billion over the next decade developing alternative energy using wind, hydrogen and other means.
Tillerson said Exxon Mobil's support for alternatives comes primarily through contributions to academic and other research groups. He touted the company's $100 million contribution to Stanford University's Global Climate and Energy Project, which he said is geared toward finding "game-changing technology" that may be decades in the offing.
He said policymakers often think in increments of two, four or six years based on election cycles. But industry leaders typically think in increments of two, four or even six decades -- the time it can take to bring a new field to production.
"This is an important point, because acting impulsively in setting energy policy with the expectation of immediate results will likely have negative consequences that will be felt for decades to come," he said.
Measures that seek to tax the industry further or increase government's take during price spikes will likely hinder investments needed for new, more diverse energy sources to meet demand 10 or 15 years from now, Tillerson told the gathering of about 2,000 from more than 50 countries.
On global emissions, Tillerson said it's an issue that affects everyone in the world. He acknowledged Earth's climate is changing, the average temperature is rising and greenhouse gas emissions are increasing. He also noted that climate remains a complex area of scientific study.
But he said it's clear the risks of climate change to society and ecosystems could be significant, and it's prudent to develop and implement "sensible strategies that address these risks while not reducing our ability to progress other global priorities such as economic development, poverty eradication and public health."
Shares of Exxon Mobil climbed 85 cents, or 1.1 percent, to close at $75.45 on the New York Stock Exchange.
Source: Associated Press
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