U.S. energy policies should heed the country's new era of natural gas and oil abundance with an overhaul to make them less burdensome and more transparent, ExxonMobil Corp.'s chief said Thursday in Washington, DC.
Rex Tillerson, speaking to The Economic Club, said adjusted policies would ensure that the country realizes the benefits of the new energy era.
"We need sound energy policies, policies equal to the innovation that has redefined the modern energy landscape," Tillerson said. "It is time to build policies that reflect our newfound abundance that view the future with optimism, that recognize the power of free markets to drive innovation, and that proceed with the conviction that free trade brings prosperity and progress."
For example, he said, domestic gas and oil exports should be enabled, TransCanada Corp.'s Keystone XL oil pipeline should be approved, and the regulatory process should be made less burdensome and more transparent.
"With free trade in energy and common-sense regulatory reforms, the U.S. energy industry can strengthen U.S. energy security and continue to pioneer the innovations that make possible the safe and responsible development of energy," Tillerson said. "No one can say for sure how the industry will evolve next or where it will go, but one of the enduring lessons of our industry is that sound policy rewards wide and disciplined investments, spurs economic growth and improved environmental performance, and leads to greater peace and prosperity."
The domestic energy sector accounts for close to 7% of the U.S. economy and has been responsible for around 30% of the nation's economic growth since the 2008 financial crisis, he noted. The industry "has been an economic engine for the entire nation at a time of recession, slow growth, and falling labor participation rates."
A lot of the credit in the energy renaissance was given to the integration of hydraulic fracturing and horizontal drilling.
ExxonMobil is the largest gas producer in North America, and Tillerson gave a nod to its importance in reducing greenhouse gas emissions.
"Because natural gas emits up to 60% less carbon dioxide than other major sources when used for power generation, our abundant and reliable supplies have been instrumental in reducing our nation's carbon dioxide emissions to levels not seen since the early 1990s."
The industry too has a responsibility, he said, to meet a "two-pronged challenge" in providing the world's energy needs while protecting the environment. "The global economy will need sound economic reasoning and more sensible policies to fully leverage this moment to meet the energy and environmental challenges of the future."
There was a cadre of top U.S. energy CEO also in Washington over the last few days as part of a push to remove export restrictions by Producers for American Crude Oil Exports (PACE). PACE was formed last fall, the first formal effort to attempt to end restrictions on selling domestic oil overseas (see Daily GPI, Oct. 28, 2014). Members include Anadarko Petroleum Corp., Chesapeake Energy Corp., Concho Resources Inc., ConocoPhillips, Continental Resources Inc., Encana Corp. EOG Resources Inc., Hess Corp., Laredo Petroleum Inc., Marathon Oil Corp., Noble Energy Corp., Occidental Petroleum Corp. and Pioneer Natural Resources Co. No oil majors, including ExxonMobil, are members of PACE.
Lawmakers and the White House were briefed by PACE members on the market, including the decline in drilling and workforce reductions.
"We've had a series of very productive meetings with senators from both parties and the administration and look forward to continuing those conversations in the months ahead,” said PACE Executive Director George Baker.
Senate Energy and Natural Resources Committee spokesman Robert Dillon said the committee held a series of listening sessions and PACE has been part of that. “PACE has been making the rounds on the Hill this week, talking to a number of offices about lifting the ban on exporting crude oil,” he told NGI.