Tillerson: Feds, Industry Must Work Together in New World of Energy
It’s a new world taking shape in the energy industry, Rex Tillerson, Exxon Mobil Corp. CEO, told a crowd during the second day of IHS CERAWeek in Houston.
And while the full picture of this new paradigm has yet to take shape, it’s clear that the industry needs to come together with the public and policy makers to pioneer these opportunities in a way that will erase the old lines between the conventional and the unconventional.
With this cooperation, the United States could be a net energy exporter by the end of the next decade, he said, despite the new pressures, low prices and anemic economic growth.
“The highly technical, innovative nature of energy offers the greatest hope for us to meet our shared aspirations,” Tillerson said.
Lifting the ban on U.S. crude oil exports was a sentiment expressed during the opening day of CERAWeek as both U.S. Sen. Lisa Murkowski, R-Alaska, and ConocoPhillips CEO Ryan Lance opened the event with a discussion of repealing the outdated law.
Tillerson acknowledged progress has been made with some members of the current administration. The chiefs of both the Interior Department and the Energy Department have expressed that hydraulic fracturing can be managed safely on some federal and Native American lands.
Still, the industry struggles under the weight of onerous regulatory burdens, he said. Federal regulators would do well to recognize that the technology and techniques in use by the energy industry have been thoroughly vetted.
To meet regulatory scrutiny and public skepticism, “as an industry, we have to perform, manage risk appropriately and demonstrate our ability to operate responsibly,” he said.
But a change that would allow the industry to move forward with regulators and industry on the same side requires that issues are met with facts. There has been a lot of noise surrounding industry policy, and although it’s sincere concerns from sincere people, the government must respond to the science.
“Crude oil is a very resilient resource and energy is a very resilient industry,” he said. “I think people are going to be surprised.”
And it could happen. Tillerson had a wish list for the government regulators and he struck an optimistic, albeit cautious, tone for the industry’s future.
He urged federal regulators to promote free trade for natural gas and crude oil.
“Economic leaders from around the world agree it would bring increased jobs and energy progress,” he said, adding that to allow the export of LNG is especially critical to further reduce greenhouse gas emissions, especially as Asian nations turn toward cleaner methods to produce power, such as burning natural gas instead of coal.
Critical infrastructure – including the embattled Keystone XL pipeline – remains a priority for both the United States and Canada.
“It would improve competitiveness and strengthen our relationships with important allies,” he said.
What’s more, the drawn-out regulatory process that has held Keystone at bay for years is an example of much-needed transparency and certainty in the U.S. regulatory process.
“The Keystone XL is the poster child for problems” with federal regulations and lacking transparency. As such, those problems stifle investment and innovation.
However, with an industry that it is so dependent on human ingenuity, and has achieved so much, Tillerson said that with sound policy, energy can continue to change the world for the better.
“Safely and securely, we can reflect the highest ideals of opportunity, growth and lifting millions out of poverty,” he said.
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