ExxonMobil Corp. CEO Rex Tillerson made a serious and thoughtful effort Wednesday to make the case that the company is just as concerned about climate change as the most rabid protester.
There’s still no definitive answer to the outcome of what may happen because of climate change and greenhouse gas emissions that are said to contribute to it, he said in Dallas during the annual shareholder meeting. While a group of protesters outside the building was challenging the company’s policies, Tillerson said ExxonMobil was taking responsibility.
Climate change is one of the things that management views as a “risk management problem,” and that makes it a priority.
“I think for a long time, the whole time we were talking about it, the whole conversation was about ‘how are we going to stop greenhouse gas concentrations from reaching certain levels in the atmosphere?’ My view of that was multiple-fold,” a view that he said is shared by many stockholders and the business community.
As to “achieving certain levels that some suggest have to be achieved, there’s no one today that can map a viable pathway to achieve that. No one. No one has a viable path on the way to get there. That doesn’t mean we shouldn’t strive. And I think the steps we’re taking as a corporation are enabling at least progress toward mitigation.”
In April, ExxonMobil agreed to disclose for the first time more details about the risks of drilling unconventional wells that use hydraulic fracturing, complying with minority shareholder demands (see Daily GPI, April 4). In March the operator agreed to publish, also for the first time ever, a carbon asset risk report describing how it assesses the risks of stranded assets from climate change (see Daily GPI, March 20).
The company is as serious as a judge when it comes to the risks facing it, Tillerson said. He pointed to some built-in advantages to combat climate changes, such as its natural gas portfolio, the biggest in North America. ExxonMobil’s outlook to 2040 indicates that gas will overtake coal as the largest source of electricity and be the fastest-growing major fuel source worldwide (see Daily GPI, Dec. 12, 2013). Energy efficiency also is a priority.
“As we’ve long said, the first and important step that every consumer, whether it’s an individual consumer or an industrial consumer, should be taking is to look at your ability to utilize energy more efficiently, smartly, because then you carry out your same activity and have a lower overall impact. But even when you take all of those things into consideration and in our energy outlook we project what we think the effect of those are, it’s still very difficult to map a viable pathway to certain concentrations that some people’s models indicate are desirable,” said the CEO.
Mitigating risks means taking the steps to reduce them, but a company has to recognize that they can’t be eliminated entirely.
“So you should be spending some time thinking, what if everything I’m doing doesn’t work, or what if it turns out that the reasons for all this happening aren’t what we thought they were? The end result is the same. How are we going to deal with that? As part of prudent policy discussions, we’ve begun to promote the dialogue [that] we think you have to think about this problem with both of those areas in mind.”
The company has taken a “very broad view to where we can harden our assets, where we can harden our facilities” in light of the climate changes. “We learned a lot through some of the terrible storms that we’ve been through on the Gulf Coast,” said Tillerson. “Where we see opportunities to do so, we are hardening our own facilities and assets.”
He asked shareholders to “rightfully acknowledge” that climate change “is the most complex area of scientific and social conversation anyone’s having today. It is extremely complex. And it is one that’s not going to be a ready set of solutions that are going to fit the world’s peoples because the world’s peoples all have varying needs in this stage of their development, which is why it makes it so complex.
“We do support and engage in, and will continue to engage in, active dialogue.” Among other things, ExxonMobil scientists have continued to be actively engaged with the United Nations’ Intergovernmental Panel on Climate Change, said Tillerson.
“We are keenly aware of what that work is indicating. We are going to continue our engagement with that. It’s something that an ongoing dialogue is important. People need to be examining what the various pathways to mitigate are. But being realistic, if those don’t produce the outcome we want, how are we going to deal with it?”
For Tillerson, the answer is already at hand. “We have enormous faith in the technological prowess of the human mind,” he said. “We have seen what it’s produced in all of our lifetimes. I’m as confident about the things we do today that I never dreamed that we’d do 30 years ago. I’m just as confident that the solutions to a lot of these problems are those same technical, innovative minds that will deliver those as problems present themselves…We take it seriously…”
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