Exxon Mobil Corp. Chief Executive Officer Rex Tillerson said energy independence for the U.S. and other industrialized countries is impossible, and diverse sources of oil are needed to soften the impact of supply disruptions.
``The nationality of energy is irrelevant,'' Tillerson, who heads the world's largest oil company, said today during a panel discussion on global energy security in Calgary. ``A diversity of sources mitigates the impact on total supply from disruptions in any region or from any one source.''
Political leaders from U.S. President George W. Bush to Democratic Senator and presidential candidate Hillary Clinton have called for speedier development of domestic energy supplies such as ethanol to reduce reliance on oil from countries such as Nigeria and Saudi Arabia. Tillerson said energy independence would be counterproductive.
Eschewing oil imports would lead to protectionism and isolationism, said Tillerson, 55. ``History shows this approach is often counterproductive, leads to inefficiencies, higher prices, supply shortages and at times even trade wars,'' he said.
Tillerson also criticized a proposal by Democrats in Congress to end $15 billion in tax breaks related to exploration and overseas oil production.
`Upside-Down'
The provision would reduce funds available to explore for new oil supplies and expand refineries, Tillerson said. ``This will make a company like mine and (Chevron Corp. upstream chief) George Kirkland's less competitive in the international marketplace,'' he said. ``It's upside down.''
Kirkland also participated in the panel discussion.
Tillerson, a University of Texas-trained engineer who joined Exxon Mobil in 1975, said Saudi Arabia has begun the process of boosting daily oil production to 12.5 million barrels. That would represent a 49 percent increase from the 8.37 million barrels produced daily during the second quarter, according to International Energy Agency figures.
The kingdom has doubled the number of rigs drilling new wells to about 120, he said. The state-owned oil company, Saudi Aramco, is spending $1.50 to $2 to produce each barrel, he said.
Irving, Texas-based Exxon Mobil, which traces its roots to the 1880s and John D. Rockefeller's Standard Oil Trust, has no current plans to acquire any rival producers, Tillerson said.
Mackenzie
The company still is actively evaluating the proposed C$16.2 billion ($15.4 billion) Mackenzie pipeline to ship natural gas from the Canadian Arctic to the U.S. In May, Tillerson said the project might be shelved after the cost estimate more than doubled from C$7.5 billion.
The proposed 1,220-kilometer (758-mile) pipeline from Canada's Northwest Territories to a U.S.-bound hub in Alberta would provide enough gas to supply about 10 percent of U.S. households.
Tillerson said evaluations of the project will take at least another year. After that, Exxon's 70 percent-owned Imperial Oil Ltd. will update its cost estimate, he said.
Exxon Mobil, Royal Dutch Shell Plc and Total SA are tapping Canada's oil sands, drilling in the deep waters of the Gulf of Mexico and exploring Arctic regions as oil and natural-gas resources become harder to find, boosting prices.
Crude-oil futures traded in New York more than doubled in value since the start of 2004, reaching a record $78.77 a barrel on Aug. 1. Prices have retreated 2.6 percent since then to $76.70 at the close of trading today.
Renewable, crop-based fuels such as ethanol are too scarce and expensive to replace petroleum, Shell CEO Jeroen van der Veer said during a presentation at today's Calgary conference.
``The nationality of energy is irrelevant,'' Tillerson, who heads the world's largest oil company, said today during a panel discussion on global energy security in Calgary. ``A diversity of sources mitigates the impact on total supply from disruptions in any region or from any one source.''Political leaders from U.S. President George W. Bush to Democratic Senator and presidential candidate Hillary Clinton have called for speedier development of domestic energy supplies such as ethanol to reduce reliance on oil from countries such as Nigeria and Saudi Arabia. Tillerson said energy independence would be counterproductive.
Eschewing oil imports would lead to protectionism and isolationism, said Tillerson, 55. ``History shows this approach is often counterproductive, leads to inefficiencies, higher prices, supply shortages and at times even trade wars,'' he said.
Tillerson also criticized a proposal by Democrats in Congress to end $15 billion in tax breaks related to exploration and overseas oil production.
`Upside-Down'
The provision would reduce funds available to explore for new oil supplies and expand refineries, Tillerson said. ``This will make a company like mine and (Chevron Corp. upstream chief) George Kirkland's less competitive in the international marketplace,'' he said. ``It's upside down.''
Kirkland also participated in the panel discussion.
Tillerson, a University of Texas-trained engineer who joined Exxon Mobil in 1975, said Saudi Arabia has begun the process of boosting daily oil production to 12.5 million barrels. That would represent a 49 percent increase from the 8.37 million barrels produced daily during the second quarter, according to International Energy Agency figures.
The kingdom has doubled the number of rigs drilling new wells to about 120, he said. The state-owned oil company, Saudi Aramco, is spending $1.50 to $2 to produce each barrel, he said.
Irving, Texas-based Exxon Mobil, which traces its roots to the 1880s and John D. Rockefeller's Standard Oil Trust, has no current plans to acquire any rival producers, Tillerson said.
Mackenzie
The company still is actively evaluating the proposed C$16.2 billion ($15.4 billion) Mackenzie pipeline to ship natural gas from the Canadian Arctic to the U.S. In May, Tillerson said the project might be shelved after the cost estimate more than doubled from C$7.5 billion.
The proposed 1,220-kilometer (758-mile) pipeline from Canada's Northwest Territories to a U.S.-bound hub in Alberta would provide enough gas to supply about 10 percent of U.S. households.
Tillerson said evaluations of the project will take at least another year. After that, Exxon's 70 percent-owned Imperial Oil Ltd. will update its cost estimate, he said.
Exxon Mobil, Royal Dutch Shell Plc and Total SA are tapping Canada's oil sands, drilling in the deep waters of the Gulf of Mexico and exploring Arctic regions as oil and natural-gas resources become harder to find, boosting prices.
Crude-oil futures traded in New York more than doubled in value since the start of 2004, reaching a record $78.77 a barrel on Aug. 1. Prices have retreated 2.6 percent since then to $76.70 at the close of trading today.
Renewable, crop-based fuels such as ethanol are too scarce and expensive to replace petroleum, Shell CEO Jeroen van der Veer said during a presentation at today's Calgary conference.
Via| Bloomberg
by Joe Carroll and Sonja Franklin
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