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Speech

5 May 2016

“The Energy Industry’s Good News Story”

Rex W. Tillerson Chairman and Chief Executive Officer

The United States Energy Association
Washington, D.C.

It is an honor to receive the 2016 United States Energy Award, and I am humbled to join the list of distinguished recipients.

I want to thank the members of the U.S. Energy Association and the selection committee for this recognition.

It is a special pleasure to accept this award on behalf of the men and women of Exxon Mobil Corporation.

One of the highlights of my position is to represent the extraordinary work they do every day, helping provide the world’s energy safely, efficiently, and responsibly.

I also want to thank all of you here today for sharing our commitment to advancing the mission of the World Energy Council and U.S. Energy Association, which is to “promote the sustainable supply and use of energy for the greatest benefit of all.”

This mission statement makes clear the challenges we face as an industry. And it also reinforces a fundamental truth about energy that we in this room recognize, but many people in this town often forget.

That truth is that energy is the lifeblood of economic growth and the foundation for advancement and improvement in the quality of life of peoples the world over.

Our mission has never been more important – especially as economies around the world struggle to grow, and millions of people are unemployed or underemployed.

I have been asked to provide a few words on the state of energy, the industry, and the future.

I will do so by touching on the fundamental facts and historic lessons that ought to guide our public and policy discussions.

First, I will highlight the importance of communicating energy’s role in human progress.

Then, I will touch on the technological lessons that have led to today’s energy and environmental successes.

And finally, I will make a few comments as to why we must work for sound policies – policies that enable the development of technologies to expand supplies, increase efficiency, and reduce emissions.

Energy is a universal human need, and it is critical to global progress.

For all of us working in the energy sector, we have a unique understanding of the value and far-reaching contributions that energy provides all over the world.

At its most basic level, energy keeps us warm, cooks our meals, and lights our homes. It fuels our factories, powers our cities, and connects us to others all over the world.

But access to affordable and reliable energy also means access to modern health care, quality education, safer communities, better jobs, and a cleaner environment.

Energy is a building block of growth and opportunity.

The need for modern energy is even more astonishing when you consider the billions of people living around the world without it.

According to the latest figures from the International Energy Agency, about one in six human beings still has no access to electricity. And about two out of five people must rely on biomass such as wood, charcoal, or animal waste for basic cooking needs.

In other words, over a billion people in the developing world still live in a state of “energy poverty.”

The costs of this energy poverty are steep – especially in terms of lives lost. The World Health Organization estimated that in 2012 alone, more than 4 million people around the world died from household air pollution resulting from the use of solid fuels – like wood and biomass – in their homes.

Such sobering statistics remind us that there is a moral imperative to expanding energy supplies. And that the millions of people working in the energy industry are playing a critical role in transforming the world for the better.

Our scientists, engineers, and entrepreneurs are investing, collaborating, and innovating to find solutions that spread the benefits of energy to those who need it most.

And whether a person lives in a developed or developing economy, we will need bold and visionary thinking from the energy industry – especially when you consider the growth of global energy demand.

ExxonMobil’s most recent Outlook for Energy projects that by 2040, the world’s energy demand will increase by 25 percent – even after taking into account expected ongoing energy-efficiency gains.

To give you some perspective: a 25 percent increase is like adding to the current energy demand another North America and Latin America combined.

This increasing demand is a sign of increasing trade and progress.

It means that billions of people will enter the global middle class and gain access to cleaner water, improved sanitation, and modern modes of transportation for the first time.

If we consider our industry’s achievements today, it gives us great hope for the future.

Thanks to a series of technological successes, the world is now enjoying a period of resource abundance.

Decades of sustained investments, innovations, and collaboration across the energy industry have opened up energy resources from the deepwater and ultra-deepwater.

Ongoing advances in technology have made it possible to develop oil sands in increasingly safe and responsible ways.

And, of course, new technologies and techniques have made it possible to unlock vast new supplies of oil and natural gas from shale here in North America.

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. Whether markets are up or down, we must not lose sight of our commitment to sound business fundamentals and what our progress means for humanity.

To meet the world’s growing energy needs in the decades ahead, the world will need to pursue all energy sources, wherever they are economically competitive.

But, as you all know, expanding energy supplies is only part of a dual energy challenge.

The other part is producing the energy the world needs in a safe and responsible way. This includes taking action to mitigate the risks of climate change by reducing emissions.

At ExxonMobil, we share the view that the risks of climate change are serious and warrant thoughtful action.

And we know that society’s best hope for the future is to enable and encourage long-term investments in new technologies.

Our industry has proven – time and again – how technology can drive positive and unexpected change.

The U.S. shale revolution provides the most recent, and striking, example.

Advances in hydraulic fracturing have significantly increased volumes of cleaner-burning domestic natural gas, helping bring down U.S. carbon dioxide emissions to levels not seen since the 1990s. In fact, thanks to the shale revolution, the U.S. is now leading the world in reducing emissions – a fact rarely conveyed in the public discourse of our policy decisions.

The oil and gas sector is investing in a host of technological and engineering solutions that can help us manage the risks of climate change while providing the energy the world needs.

We are researching next-generation technologies like advanced biofuels.

We are committed to finding ways to use energy more efficiently, which includes adopting proven technologies such cogeneration.

And we continue to press forward on innovations such as carbon capture and sequestration. Earlier today, ExxonMobil announced a collaborative research program to pursue the novel application of carbonate fuel cells to capture carbon dioxide from power plants. Such breakthrough technology could substantially reduce costs. We are still in the early days, but making carbon capture more economic could lead to large-scale applications around the world, reducing emissions and mitigating the risks of climate change.

Throughout my 40+ years of working for ExxonMobil, I have been amazed by the people working in this industry and their ability to create technological marvels to overcome seemingly impossible challenges.

I look forward to what the next generation of scientists and engineers will be able to accomplish.

In short, the energy industry has a good news story to tell.

It is a story of progress and opportunity for billions of people living around the world.

It is a story of entrepreneurship and innovation leading to economic transformation.

And it is a story that provides reasons for optimism that we are building an even brighter and cleaner future.

It’s up to all of us to share this story.

For those of us working in energy, we have a responsibility to engage the public and policymakers about the benefits that our industry can bring and the policies that will be necessary to ensure we can continue to power the world’s progress.

You are already playing a part by participating in this policy forum.

The World Energy Council and U.S. Energy Association are playing a critical role in facilitating an important dialogue to increase the understanding of global and domestic energy issues.

The energy industry is affected by a wide range of public policy concerns – from taxes, trade, and regulations ... to promoting energy efficiency, reducing emissions, and addressing the risks of climate change.

Yet, at 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 advancements in the 21st century and beyond.

During this down cycle and period of anemic global growth, we need policies that enable the power of free markets to choose solutions that bring the greatest benefit to society at the lowest possible cost.

By establishing a level playing field, we can open the doors to greater competition and increased innovation. And by creating stable legal and regulatory frameworks, we will encourage the cooperation and long-term investments that revolutionary breakthroughs require.

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

Once again, I am honored to accept this award on behalf of the men and women of ExxonMobil, and I thank you for your kind attention.

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