February 20, 2007
ExxonMobil --Some progress towards a clear message
original post 2/15; revised 2/20
Here's the text of ExxonMobil CEO's recent speech. I still think Exxon should clarify the reasons why Tillerson discusses economic development, poverty eradication, and public health (according to Ken Cohen, to make effective policy with the interests of developing countries in mind -- not to suggest that we can't afford aggressive climate change policy). But, the overall message does strike me as clearer.
No discussion about the realities facing our industry today would be complete without reference to the issue of greenhouse gas emissions and climate change. This is an issue that crosses all boundaries, impacts industry and governments, but most importantly will directly impact consumers in every part of the world.
The majority of the growth in energy demand will come from developing nations as their growing populations pursue higher standards of living. With this improvement in living standards will come most of the growth in future greenhouse gas emissions.
By the year 2030 it is expected that global emissions of carbon dioxide will approach 40 billion tons per year, up from close to 28 billion tons per year today.
So, we know our climate is changing, the average temperature of the earth is rising, and greenhouse gas emissions are increasing. We also know that climate remains an extraordinarily complex area of scientific study. While our understanding of the science continues to evolve and improve, there is still much that we do not know and cannot fully recognize in efforts to model and predict future climate system behavior.
Having said that, the risks to society and ecosystems from climate change could prove to be significant. So, despite the uncertainties, it is 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.
Our industry has a responsibility to contribute to policy discussions on these important issues – and to take concrete actions ourselves to reduce emissions.
As an industry, we are already improving efficiency in our operations - greatly enhancing our energy efficiency while supplying more products than ever before. Steps taken at ExxonMobil, for example, since 1999 to improve energy efficiency at our facilities, for example, resulted in CO2 emissions savings of 11 million metric tons in 2005. That’s equivalent to taking two million cars off the road.
But we must do more. We must continue to foster and support scientific research into technology breakthroughs to deliver new sources of energy with even lower emissions. One example is Stanford University’s Global Climate and Energy Project, which ExxonMobil and other partners are supporting with a collective contribution of $225 million.
The approaches policymakers adopt to address climate risks are also important. A global approach is needed that promotes energy efficiency, ensures wider deployment of existing emissions-reducing technologies and supports research into new technologies.
It is also critical to maintain support for fundamental climate research, recognizing that there remains much that we still do not understand.
Specific policy tools should be assessed for their likely effectiveness, scale, and costs, as well as their implications for economic growth and quality of life. In that regard, rigorous and informed debate - - debate that takes into account the essential role played by energy in advancing social and economic progress -- will best support thoughtful policymaking.
In our view, the most effective approaches will maximize the use of markets. This will help promote global participation and facilitate the rapid spread of successful initiatives.
Consistent with a market-based approach, effective policies will ensure a uniform and predictable cost of reducing carbon emissions, maximize transparency, minimize complexity, and adjust to new developments in climate science and the economic impacts of policies.
Just as technology has continually been the driver of progress in our industry, I am confident that future technology advances will both expand our understanding of the climate system and enable an effective response.
We must encourage all participating in this debate to frame the discussion in terms of the realities we face – the realities of growing demand and the need for affordable, reliable energy to enable the world’s consumers to achieve genuine improvements in their quality of life.
The policy measures adopted today will have far-reaching implications in the years ahead. We must consider the potential impacts on future economic growth and quality of life for not just the current generation, but those of our children and grandchildren.
Last week, I summarized my reaction to Planet Ark reports on the ExxonMobil CEO's most recent statement on global warming as "little progress on a clearer message."
ExxonMobil obviously is still not ready to assume a leadership position on climate policy and continues to play the "balancing" game:
"It is 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,"
Ken Cohen had indicated that Exxon was not arguing that climate change policy had to be formulated to assure economic development and poverty eradication. It sure sounds like it to me.
My opinion was based on the Planet Ark report. Exxon sent me the full speech. Looking at the speech as a whole, I think that the message delivered is clearer. I believe that "some progress" is a more accurate description. But the problem for Exxon remains that it speaks in nuanced language that doesn't dramatically depart from its prior positions. Until Exxon takes a dramatic step, such as joining the Climate Action Partnership or otherwise sending an unequivocal signal that it supports immediate progress on creating an global climate policy, including strict targets in reducing GHG emissions, Exxon will still be perceived as dragging its feet.
Planet Ark report:
HOUSTON - Exxon Mobil Corp. Chief Executive Rex Tillerson said Tuesday nations should work toward a global policy to fight climate change -- another sign the oil giant is softening its stance on global warming.
"It is 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," he said.
The comments come after Exxon Mobil, a long-time foe of limits on greenhouse emissions, began engaging in talks with about 20 other companies on ways the United States could regulate heat-trapping gases.
Speaking at a conference sponsored by Cambridge Energy Research Associates, Tillerson said climate change is a global problem and policy should lend itself to global participation, including from the Asia Pacific region, where rapid economic growth could boost emissions.
He also said that the most effective policy approaches would maximize the use of markets. Europe uses a cap-and-trade system to reduce greenhouse gas emissions, in which government sets an emissions limit and companies buy and sell the right to pollute against that limit.
"Everyone recognizes that no one can conclusively say 100 percent what's going on," he said. "Whatever we do needs to have the flexibility to accommodate the fact that this is going to continue to evolve ... It will not turn out the way any of us expect it to turn out."
Since Democrats won control of Congress in November, heavy industries have been nervously watching which route the United States may take on future regulations of carbon dioxide and other heat-trapping gases.
Exxon in 2006 stopped funding the Competitive Enterprise Institute, a nonprofit advocating limited government regulation, and other groups that have downplayed the risks of greenhouse emissions. Last year, CEI ran advertisements, featuring a little girl playing with a dandelion that downplayed the risks of carbon dioxide emissions.
Tillerson also said policymakers should remain realistic about the limited role biofuels can play in the wider energy market, saying it will be difficult to increase the amount of biofuel produced absent a technological advance.
"I'm no expert on biofuels. I don't know much about farming and I don't know much about moonshine," he said. "There is really nothing (Exxon) can bring to that whole (biofuels) issue. We don't see a direct role for ourselves with today's technology," he said.
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