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ExxonMobil’s Rex Tillerson: ‘Unbiased’ Regulation Will Help Sustain North American Energy Boom

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Rex Tillerson
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.

  • FIJ

    Favorable environmental impact statements on the Keystone pipeline? None that are credible, at least.

  • Dubious Brother

    Credible to whom? We live in Texas, a state that is covered with pipelines. The handful of extremists that are holding up the pipeline are sure making a lot of money for Obama’s buddy Warren Buffet though.

  • Glenn

    Tillerson mentioned multiple environmental impact statements prepared by the U.S. State Department including the latest which, according to The New York Times, “presents no conclusive environmental reason” why the pipeline should not be built.

  • FIJ

    Credible to the scientific community and not people getting paid by Exxon. Unearthing, refining, and using this amount of tar sands oil (which is like the dirtiest oil on the planet) is not “environmentally favorable,” and the overwhelming majority of actual experts on the subject agree.

    If you don’t buy scientific consensus, then we’re simply at an impasse.

  • Tim Rogers

    Is it just me, or does Rex have a little Jonathan Winters in him?

  • FIJ

    Also, the EPA head resigned in January because of Obama’s positive attitude towards Keystone. So I’m not sure why Obama’s in your crosshairs here.

  • FIJ

    Well, James Hansen and many others have a profoundly different take on that. That’s an extremely controversial report you’re referencing, and most experts (many of whom were present at the anti-Keystone rally in February) disagree with it.

  • FIJ

    Sorry, I hope my vitriol didn’t take away from this piece of genius.

  • Dubious Brother

    This is the same “scientific consensus” that had all the lefties convinced that global warming was real and the oceans are rising and polar bears are extinct…

  • FIJ

    Yep, we’re at an impasse.

  • Dubious Brother

    Lisa Jackson’s resignation had nothing to do with the pipeline. She resigned because it became known that she was using an alias for her official emails which is illegal and an investigation had been opened which would shed more light on this administration’s idiotic war on coal and other issues. Obama was for the pipeline, kind of, before the election when he was talking about job creation and energy independence but against it ater the election and a couple of white house visits from Buffet.

  • Dubious Brother

    The same James Hansen that has been lying about global warming for years?

  • FIJ

    Yeah, the e-mail thing was…odd. And I’m no fan of the EPA in general, it’s extremely inefficient and some of the base assumptions used in their studies are ludicrous (the mercury emissions one being a prime example). I shouldn’t have mentioned that anecdote.

    But we still don’t know where Obama stands on this. I have no doubt that his decision will be more political than ideological. If he goes against it, you can cry corruption all you want, but as long as he’s with the scientists, I’m cool.