Tillerson: Foundations for Continued Energy Progress

Mark Green
Posted May 6, 2016

Energy for the betterment of all. Sounds simple enough, yet the foundational role energy plays in creating opportunity for better, healthier lives, security and freedom must not be taken for granted.

America’s energy revolution is driving economic growth. It’s benefiting individuals and families with reliable, lower-cost fuels. It’s building national security and strengthening the United States’ stature in the world. Our energy renaissance also is at the heart of lowering carbon emissions to near 20-year lows, which is letting the U.S. lead the word in CO2 emissions reductions. No, we mustn’t take that for granted.

ExxonMobil Chairman and CEO Rex W. Tillerson touched on these points during a speech this week at the U.S. Energy Association’s annual meeting and policy forum, which honored him with its 2016 annual award. Tillerson underscored the need for policies and actions to sustain and grow the U.S. energy revolution, for creating broader access in the world to energy’s benefits and noted the energy sector’s leadership in advancing climate goals.

Caption: L-R, ExxonMobil Chairman and CEO Rex Tillerson, API President and CEO Jack Gerard and USEA Executive Director Barry Worthington in discussion with FERC Commissioner Colette Honorable.

Tillerson called energy the “lifeblood of economic growth” and the “foundation for advancement and improvement in the quality of lives of people the world over.” He said energy provides home heating and lighting and allows the safe, clean preparation of daily meals. It is key to modern health, quality education, safety, jobs and a cleaner environment. “Energy is a universal human need,” he said. “It is critical to global progress.”

There’s much progress to be made. Tillerson cited International Energy Agency estimates that about one in six people in the world today don’t have access to electricity and must rely on wood, charcoal or animal waste to meet basic cooking needs:

“Such sobering statistics remind us there is a moral imperative to expanding energy supplies. The millions of people working in the energy industry are playing a critical role in transforming the world for the better. Our scientists, our engineers and entrepreneurs are investing, collaborating and innovating to find solutions to spread the benefits of energy to those who need it most. Whether a person lives in a developed or a developing economy, we will need bold and visionary thinking from the energy industry, especially when you consider the growth of global energy demand.”

According to ExxonMobil’s 2016 energy outlook report, global demand is expected to grow 25 percent from now into 2040. This will challenge industry’s ability to develop more energy as well as develop the technologies and innovations needed to do the job, he said. Industry’s history of technological achievements and innovation “gives us great hope for the future,” he said – citing advancements in deep water and ultra-deep water energy development, increasingly safer development of Canada’s oil sands and U.S. shale energy via hydraulic fracturing and horizontal drilling. Tillerson:

“This new abundance of supplies at a time when we are experiencing a sluggish global economy has created some significant short-term challenges for our industry. But commodities markets are cyclical, and whether the markets go up or go down we must not lose sight of our commitment to sound business fundamentals and what our continued progress means for all humanity. To meet the world’s growing energy needs in the decades ahead, the world will need to pursue all energy resources and all sources wherever they are economically competitive.”

Industry is meeting a dual energy challenge, he said – expanding energy supplies to meet needs and doing it safely and responsibly, including actions that “mitigate the risk of climate change by reducing emissions.” Indeed, this already is occurring. Increased use of clean-burning, domestic natural gas is the primary reason U.S. carbon emissions are at levels not seen since the 1990s. He said industry is working on advanced biofuels, co-generation, carbon capture sequestration and a “host of technological and engineering solutions” to manage climate change. Tillerson:

“At ExxonMobil we share the view that the risks of climate change are serious, that they warrant thoughtful action. And we know society’s best hope for the future is to enable and encourage long-term investment in new technologies. Our industry has proven time and time again how technology can drive positive and often unexpected changes. … Throughout my 40-plus years of working for ExxonMobil, I really have been amazed by the people working in this industry, their ability to create technological marvels to overcome what were seemingly impossible challenges. I look forward to what the next generation of scientists and engineers will be able to accomplish. That’s why I’m confident these daunting challenges that are in front of us will be addressed with good science and engineering.”

Tillerson said the energy industry’s success in meeting challenges today and tomorrow will be affected by policy choices on issues ranging from taxes and regulation to access to energy reserves:

“[A]t the center of each of these debates are the inescapable facts: the need for energy and the importance of innovation. It is critical that government leaders understand this connection and adopt sound policies that will foster continued growth and advancement in the 21st century and beyond. During this down cycle in a period of anemic global growth, we need policies that enable the power of free markets to choose solutions that will bring the greatest benefit to society at the lowest possible cost.”

Tillerson said stable legal and regulatory frameworks will foster industry cooperation and long-term investments for America’s energy future:

“By recognizing the universal need for energy and the value of innovation, we can put in place policies that will enable us to research, invest and build the technologies and ventures that can transform the future for the betterment of all.”