When he showed up today at the Hyatt Regency hotel to address a luncheon meeting of the World Affairs Council of Dallas/Fort Worth, ExxonMobil chairman and CEO Rex Tillerson had a lot to smile about. Last week, the Irving-based energy giant revealed that Tillerson had received a 15 percent pay increase, to $40.3 million last year, after the company earned a profit of nearly $45 billion.
Then, on Wednesday, Exxon recaptured its position as the world’s most valuable publicly traded company, after shares of Apple Inc. dropped below $400. “Whatever that means,” Tillerson said with a laugh during a private reception before his talk. “They’re more volatile than we are. Day traders must love that Apple stock. We try to stay steady, while they go up and down. We’re good for long-term investors like pensions.”
In his formal remarks, Tillerson had his mind on the long-term as well. In contrast to the “old ways” of thinking about oil and gas in terms of rationing scarcity, he said, new technologies mean North America is enjoying and will enjoy an abundance of affordable, environmentally safe energy for decades to come. Thanks to techniques like fracking and horizontal drilling, North America is now the world’s fastest-growing hydrocarbon region, he said, providing jobs for rural areas, boosting U.S. industrial competitiveness, and pumping tens of millions of dollars in revenue into government coffers every day. At the same time, Tillerson stressed, CO2 levels have fallen to their lowest levels in decades, even as the population has grown.
To sustain this momentum, the CEO went on, it’s predicted the industry will need to invest $37 trillion in infrastructure costs over the next 20 years or so.
In order for that to happen successfully, he said, the government will need to have “stable, unbiased” regulatory policies in place—in contrast, for example, to its current stance on the proposed Keystone XL pipeline, which would bring oil-sands crude from Canada to refineries on the Gulf Coast.
Despite years of study, public hearings, favorable environmental impact statements and the support of unions, Tillerson said, a final decision on the pipeline has continued to be delayed—simply because of “politics.”
In a Q&A session following his talk, Tillerson said Exxon has had good success with its energy ventures in Russia, though he has “been disappointed at the pace with which things have continued to evolve” there. What’s most needed now, he said, is that the “right legal and regulatory frameworks” be put in place in Russia—although that’s not unlike the situation here in the United States as well.
“We know where we need to go,” Tillerson said. “Sometimes we just have a hard time getting there.”
The final questioner probed ExxonMobil’s stance on alternative energies.
“We are a petroleum and petrochemical company,” because that’s what 80 percent of the world uses, Tillerson replied. But the company is open to exploring alternatives, he added. It’s been in the solar space and in biofuels, and it’s watching wind as well. “We pay close attention to all alternatives and, if there’s a business opportunity, we look at it. But, fundamentally, we are an oil and gas and petrochemical company.”
Even if solar grows 20-fold over the next 30 years, Tillerson said, it would still account for just 2 percent of global energy. If wind grew 7-fold over a similar period, it would account for 7 percent. More than 1 billion people on the planet still lack energy for basic needs like cooking and lighting, he said, and it’s primarily oil and natural gas and coal that will allow them to meet their needs and raise their standards of living.