Exxon Chief Cautions Against Rapid Action to Cut Carbon Emissions

NY Times

By CLIFFORD KRAUSS and JAD MOUAWAD

HOUSTON, Feb. 13 — The chief executive of Exxon Mobil, Rex W. Tillerson, warned Tuesday that governments should not rush into policies that could damage the global economy in order to limit carbon emissions.

In a speech at a major industry gathering, Mr. Tillerson acknowledged that the planet was warming while carbon dioxide levels were increasing, suggesting a more accommodating position than the hard-nosed stance Exxon had held.

But in the same speech, Mr. Tillerson, who leads the world’s largest publicly traded company, gave an unalloyed defense of the oil industry and predicted that hydrocarbons would dominate the world’s transportation as energy demand grows by an expected 40 percent by 2030.

There is no significant alternative to oil in coming decades and Exxon will continue to make oil and natural gas its primary products, he said.

“The scale advantages of oil and natural gas across a broad array of applications provide economic value unmatched by any alternative,” he said.

Mr. Tillerson’s tone, if not the substance of his remarks, at times broke with the rigid positions of his predecessor, Lee Raymond, who has long been considered a skeptic in the global warming debate.

“That’s Exxon-speak,” said Barbara Shook, an analyst for Energy Intelligence Group, a publishing and information services company. “It’s their own dialect, but if you look at where Exxon was one and a half years ago they may not have shifted their position 180 degrees, but they are moving.”

Mr. Tillerson’s remarks were his first formal and extensive comments since the publication of a report two weeks ago by the Intergovernmental Panel on Climate Change, a leading panel of international scientists and reviewers, concluding that there is 90 percent certainty that human activity is decisive in changing the global climate.

Mr. Tillerson told reporters that he had not read the report but said, “My understanding is there’s not a clear 100 percent conclusion drawn.” He added: “Nobody can conclusively 100 percent know how this is going to play out. I think that’s important.”

Taken together, his statements suggested that Exxon was navigating between positions defending oil as an energy source and its core business, and showing sensitivity to growing public concerns about a warming climate.

President Bush has called for increasing development and use of biofuels. And Democrats now controlling Congress have said they favor higher taxes on oil companies to pay for research in alternative energy.

Mr. Tillerson acknowledged a small role for alternative fuels in the future, saying he thought that ethanol and other types of biofuels have “an important role to play” given the projected growth in energy demand.

He poked fun, however, at ethanol, calling it “moonshine.”

“I am not an expert on biofuels,” he said. “I am not an expert on farming. I don’t have a lot of technology to add to moonshine.”

But it was on the subject of global warming that Mr. Tillerson drew the most interest from energy leaders at the conference, which was organized by the energy consulting firm Cambridge Energy Research Associates.

“The risks to society and ecosystems from climate change could prove to be significant,” Mr. Tillerson said. “So, despite the uncertainties, it is prudent to develop and implement sensible strategies that address these risks.”

But at the end of speechmaking and answering questions, Mr. Tillerson expressed concern that policy makers could damage the world economy with precipitous environmental policies. He warned that future generations could be sorry for hasty policies taken today without more careful study.

“This is a centuries-long kind of problem, and we are going to learn more as we go,” he said.

He noted that some scientific reports describing models of climate change concluded with a “range of potential outcomes.” He added: “A range implies a certain degree of uncertainty. Policy decisions need to accommodate that uncertainty.”

Exxon, which has had record earnings the last two years, has been a target of environmental groups for financing organizations that have questioned climate science and for its business activities around the world. Much of the emissions of greenhouse gases blamed for global warming come from the burning of fossil fuels like gasoline and natural gas.

Mr. Tillerson said his company supported breakthrough research in cellulosic ethanol, which is made from grasses and woodchips, and he was clear about Exxon’s role. “There is really nothing I see Exxon can bring to this,” he said. “We don’t see a direct role for ourselves.”

The report by the panel on climate change was widely considered the most authoritative study on the subject. It said for the first time that global warming was unequivocal and concluded that human activity had very likely caused most of the rise in temperatures since 1950. The report said that global warming could be blunted by prompt action.

Mr. Tillerson defended the energy industry as being environmentally responsible. “The footprint required of our activities is getting smaller and more efficient,” he said, “proving that energy production and environmental protection need not be a zero-sum.”