Technology will be a "critical enabler" in meeting the world's growing energy needs, ExxonMobil Corp. CEO Rex Tillerson said Thursday.
In a keynote speech to the Academy of Medicine, Engineering and Science of Texas, Tillerson said technological advances that include those that have opened up shale gas and oil in North America "will underpin solutions" to all of the energy challenges ahead.
Too often, said the CEO, "energy policy debates frame the issue in 'zero-sum' terms, pitting one energy source against another. But the growing energy needs here in the United States, and around the world, make it clear we will need to develop all sources to stay globally competitive. We will need oil, natural gas and coal. We will need nuclear power. And we will need alternative energy sources such as wind, solar and next-generation bio-fuels. It is not 'either/or' -- it is 'all of the above.'"
ExxonMobil's projections indicate that oil, coal and natural gas "will continue to meet the vast majority of the world's growing energy needs well into the middle part of this century, thanks to their availability, reliability, accessibility and their versatility. Alternative energy sources are expected to achieve relatively high annual growth rates, but because they begin from a comparatively small base, they will continue to comprise a small share of the world's energy portfolio for many years to come."
When the world began transitioning to coal from wood in the middle part of the 19th century, Tillerson said it took 50 years before coal met half of the world's energy demand. "Likewise, when world economies began shifting from coal to oil and natural gas in the late part of the 19th century, it took three quarters of a century for oil and natural gas to displace 50% of the world's coal demand.
"The point here is not that growth in alternative energy sources is not important, but rather, that the world's energy challenges span a very long time frame."
Just as technological progress has promoted economic growth, it also has played a crucial role in the energy industry by "improving safety, reducing environmental impacts of energy production and enabling access to new sources of energy supply," said Tillerson. "With technological advances and breakthroughs come exposures to new risk -- risk that must be recognized, accommodated and actively managed...
The Macondo well blowout in the Gulf of Mexico last April "was a painful reminder of the human and environmental damage that can result from a failure to uphold these standards" revealing "that our nation, and the energy industry, could have been better prepared for the possibility, however remote, of a deepwater well blowout. Our systems and technology advancements must always recognize the human element and its fallibility."
However, "beyond that moral imperative, safety and operational integrity are squarely in our nation's economic interest. The resources from the Gulf of Mexico account for about 30% of U.S. oil and natural gas production and support more than 170,000 jobs."
Tillerson cautioned against government policies "that pick winners and losers through mandates, subsidies or penalties can have the perverse effect of actually stifling innovation. By supporting options that are unable to stand on their own, such policies may be delaying the next phase of innovation or misdirecting the effort entirely.
"While there can be an appropriate role for government incentives or funding, policy makers must avoid subsidizing certain sectors, companies or jobs -- especially if those policies hinder the ability to invest in new technologies."
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