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Exxon chief: US in ‘a new era of energy abundance’

Written by  Thursday, 02 October 2014 19:16

ExxonMobil chief executive officer Rex Tillerson spoke at the first-ever Greater Houston Partnership’s “State of Energy” event, giving his perspectives on the intrinsic ties between the energy industry and the city of Houston and highlighting North America’s, specifically Texas’, emergence as an energy powerhouse.

Tillerson ended by calling to end the export ban on crude and LNG due to the strength of the US energy economy, saying that doing so could flood the US with immediate short- and long-term benefits.

He briefly outlined the revolutionary technological changes within the North American countries to show each have specifically contributed to, as he described it, “a new era of energy abundance.”

Starting with Canada, the Exxon chief said that recent technologies allowing the development of the country’s oil sands have afforded the country access to proven oil reserves of approximately 170 billion bbl.

Moving to the Gulf of Mexico, he said called the opportunity for deepwater play unprecedented, saying that the associated technologies improve each year.

“In less than a generation, we progressed from engineering concepts hand-drawn on drafting tables – that’s how I had to do them – to sophisticated computer-designed rigs,” he said, noting that platforms now sit in 10,000ft of water.

“We project that from 2010 to 2040, deepwater production worldwide will grow 150%,” Tillerson said. “The people and companies of Houston will be critical to this effort.”

In discussing the domestic production, he noted that “by itself, Texas ranks as the number eight oil producer among the world’s top ten producers of crude oil,” he told the crowd, who reacted visibly. “Of course, the rest of them are countries.”

He continued to say that Texas had surpassed even Mexico in terms of output, noting that he had been in Mexico City the previous night – Exxon and Pemex announced an MOU just before the event – and that Mexico’s Energy Minister said that the country was going to fix that, given the country's historic energy reform. 

The North American countries produce more oil than anyone in the world, he explained, putting them ahead of the second-place Russian Federation by a distant 50%. Tillerson said that efforts like this would allow the US to become an exporter.

The US government is slowly seeming to move in that direction, having approved HR 6 in June, which amends the current Natural Gas Act of 1938 to require expedited approval by the Federal Power Commission for natural gas exports from the US to a World Trade Organization member nation. With the Ukrainian-related sanctions isolating Russian business, the bill’s aim is to “provide our allies with access to a safe and secure energy source while boosting American energy production and job creation,” author and sponsor Rep. Cory Gardner (R-CO) said 6 April. In addition, also in June, Sempra Energy received final US approval from the Federal Energy Regulatory Commission (FERC) for its Cameron LNG export terminal in Louisiana, with construction to start in 2014. It was the second application approved, after Cheniere/Sabine Pass LNG

ExxonMobil has found that global energy demand will increase 30% by 2040, Tillerson explained, naming this as one of the reasons why he felt there were some reasons for concern in the state of energy.

 “For decades now, the United States has pursued energy policies based on the fear of scarcity,” he said. “That’s the old way of thinking. Now we need policies designed for this new era of abundance.”

The US needs far-sighted policies, not short-sighted policies aimed at US energy independence, he said, pointing to the Keystone XL pipeline as an example of what happens when policies and the government verge off track.

”Political gamesmanship has delayed a project for more than six years,” he said.

Tillerson said that a key lesson learned from the energy revolution is that sound policy leads to wise investment.

ExxonMobil CEO Rex Tillerson keynotes the inaugural Greater Houston Partnership's State of Energy event. Photo: Greater Houston Partnership / David Brown

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