Thursday, August 14, 2008

Exxon: Waiting to Exxhale

I hope Nancy Pelosi was watching ABC news and Charlie Gibson’s interview this week of Exxon CEO Rex Tillerson, who has been on the hot seat because of Exxon’s “record profits” last quarter--$11.7-billion. Tillerson defended well the company’s performance against critics’ depiction of the company earning $1,400 a second in profits.

While that calculation may be true, Tillerson pointed out that if you’re going to slice the numbers that way, then you must also include the comparison with the $4,000/sec Exxon pays in taxes, and $15,000/sec Exxon has in expenses. According to Tillerson, Exxon runs through $1-billion a day to operate the company.

Here’s an interesting take on Energy Independence: Tillerson says that concept is "not realistic for the United States or almost any other country." He’s right: "Our country's economy is so interdependent with the rest of the world in so many areas of, not just commodities, but capital markets [,too.]"

So why would we view energy any differently than the way we view the rest of our economy?

Just as financial diversity provides a secure foundation, Energy diversity provides security for the country. Having as many diverse supplies of energy as possible should be the goal of any Energy Policy, so that any disruption in one area does not leave the country hostage to any one area.

Remember Barak Obama calling for the "end of the age of oil in our time," claiming that the United States could produce enough renewable energy to replace all U.S. imports of oil within 10 years?
Tillerson says "it's going to be very challenging to achieve that goal, in that period of time. So much of the energy issue that the United States deals with and the world deals with, people I think do not have an appreciation for the lead times that are required," he says.

Instead of the "drill now, drill here” mentality, the focus should be on both efficiency and drilling. According to Tillerson, "we can't drill our way out of this problem, just like we can't conserve our way out of this problem, just like we can't alternative-fuels our way out of this problem…"

Tillerson correctly says there is no one solution to this; there must be "an integrative set of solutions. And you have to undertake them all. So when the whole debate focuses around we have to choose this one solution or that, people are missing the point."

Our Energy policy is going to be bigger than any one candidate, and, Tillerson believes, "for people or policymakers to pick one as being the winner is really shortsighted." He said, "policy must instead be a comprehensive, long-term approach. "

And that does get to the root question of whether we doing everything here at home that we could be doing. We're living through the personal hell resulting from this country not fully developing our own natural resources. Blame Congress, blame environmentalists...or just blame ourselves for not having the backbone or resolve to make tough choices.

It's no accident that energy prices have modulated downward in tandem with election cycles, creating a false sense of security among voters. Those days are behind us, and instead of focusing on independence, Tillerson believes Americans "should be developing, again, all the supply sources and all the options that we can develop" in a way that's efficient and is going to provide energy at an affordable price.
That's a concept even Paris Hilton could grasp.

No comments: