Last Friday night, PBS talk show host Charlie Rose devoted his entire hour to ExxonMobil Chairman and CEO Rex Tillerson. Tillerson, 60, joined the oil and gas giant in 1975 as a production engineer, climbed the corporate ladder, and replaced Lee Raymond at the helm in 2006.
Tillerson sounds a lot more reasonable than his crusty predecessor--who denied the reality of climate change and called environmental advocates "extremists"--but his agenda is pretty much the same. While Tillerson acknowledges that climate change is "a serious issue," he is still all about oil and gas--not developing cleaner alternatives--and that unwavering focus is working out well for the company. ExxonMobil generated $44.9 billion in profits last year, just shy of its 2008 record. But continuing on this path, regardless of its profitability, will have dire consequences. If the world winds up relying on fossil fuels for 80 percent of its energy in 2040, as Tillerson predicted during his chat with Charlie Rose, I'm sure ExxonMobil will enjoy another banner year, but we definitely won't be enjoying the weather.
Rose asked Tillerson a number of open-ended questions on a range of issues, including the Keystone pipeline, gasoline prices, climate change, algae-based biofuels, and U.S. energy policy. And Rose did, at times, ask follow-up questions. But in nearly every instance, Rose listened politely, refrained from challenging Tillerson on the facts, and went on to his next question.
Let's imagine, for the sake of discussion, that yours truly was sitting at Rose's oak table during the interview and had the opportunity to provide contradictory evidence--exactly what Rose should have done to keep Tillerson honest. Below are word-for-word excerpts from Rose and Tillerson's conversation that night with the addition of my commentary and how I imagine Rose would introduce me and sign off at the end of the show.
Charlie Rose, March 8, 2013 (Bonus Edition)
Charlie Rose: Rex Tillerson is here. He is chairman and CEO of ExxonMobil. It is the world's largest refiner of petroleum products. ...Today he has positioned his company to capture the promise of a natural gas revolution as the world transitions to cleaner fuels, natural gas and electricity are expected to account for more than 60 percent of the world's energy demands by 2040.
Elliott Negin is also here. He is director of news and commentary for the Union of Concerned Scientists, a leading science-based advocacy organization. UCS has called for dramatically reducing carbon emissions, cutting projected oil use in half over the next two decades, and transitioning to clean, renewable energy technologies to avoid some of the worst consequences of global warming.
I'm pleased to have Rex Tillerson and Elliott Negin on this program. Welcome.
Rex Tillerson: Thank you, Charlie.
Elliott Negin: Good to be here, Charlie.
Tillerson stresses "uncertainty" to cast doubt about climate change
Rose (to Tillerson): Speaking of global warming, how are you different than Lee Raymond, your predecessor who had outspoken views about global warming?
Tillerson: Well, I think in terms of my view of where we find ourselves on our understanding of global warming, we have continued to study this issue for decades. ... With all of that [new data, better models, and more competent analysis], though, the facts remain there are uncertainties around the climate, climate change, why it's changing, what the principal drivers of climate change are.
And I think the issue that I think is unfortunate in the public discourse is that the loudest voices are what we call the absolutist, the people who are absolutely certain that it is entirely man-made and you can attribute all of the climate change to nothing but man-made burning of fossil fuels. And on the other end of the debate, I would say the absolutists who say there is no relationship. And the truth of the matter, based on our investigation, is it is somewhere in between.
Negin: Charlie, Rex's absolutist argument is absolute malarkey. He's setting up a straw man. Climate scientists have never stated that human activity, namely burning fossil fuels and destroying tropical forests, is the sole cause of global warming. That said, in 2007, the U.N. Intergovernmental Panel on Climate Change concluded that "most" of the increase in average global temperatures since 1950 is "very likely" due to the increase in manmade carbon emissions.
As for the absolutists on the other side, most of them have changed their position from outright denial to a more nuanced "global warming is happening but it's not caused by human activity," or "it's not serious enough to do anything about it, or "it would be too expensive to address."
Rex should be familiar with these arguments. Over the last decade his company has been financing a handful of fringe scientists and so-called free-market think tanks that make them. My organization published a study on ExxonMobil's funding activities a year after Rex became CEO. We found that between 1998 and 2005, ExxonMobil spent $16 million to support 43 "contrarian" think tanks that dispute the reality of climate change. Just after we released the study in 2007, an ExxonMobil spokesman claimed the company stopped funding them. In fact, according to the company's tax filings through 2010, it's still funding a number of them.
The link between global warming and extreme weather
Rose: We've had a series of weather incidents, and some people believe there's a link between those weather incidents, Hurricane Sandy and others, and what's happening in terms of global warming. Do you believe there is some link?
Tillerson: I have seen no scientific studies to confirm. Not a specific storm, but nothing.
Rose: In terms of those kinds of direct outcomes, you see no link?
Tillerson: There has been nothing to confirm there is a link.
Negin: There is, in fact, substantial scientific evidence that there's a strong link between global warming and heat waves and coastal flooding from sea-level rise. There's also a strong link to heavy precipitation and drought, depending on the region and time of the year.
The link is less clear when it comes to hurricanes, but there again, climate scientists expect them to be influenced by higher average temperatures. Higher temperatures are leading to warmer sea surface temperatures during hurricane season, moister air, and higher storm surges because sea levels are higher. There is no doubt that Sandy was worse because sea-level rise led to more inland flooding.
Rose (to Tillerson): Here is what I understand about your position on this. That this world has been able to adapt to many things. And that it is a manageable problem. That we can deal with global warming if we focus on it, if we understand it, and if the models are accurate.
Tillerson: Well, I view global warming and climate change as a serious risk. And I'm in the risk management business. ...So as I look at climate change and global warming as a risk management challenge for policymakers, then I think you undertake it like we manage all risks. You take sensible steps that can mitigate the risk by controlling the growth of greenhouse gas emissions through a lot of the things [carbon tax, energy efficiency, regulation and public education] we talked about.
Negin: Global warming is a serious risk, but we have to do more than control the growth of carbon emissions. We have to dramatically roll them back.
The big question for me, Rex, is if you agree that we have to take what you call "sensible steps" to cut carbon emissions, why is your company and the rest of the oil industry trying to block progress? Your trade association, the American Petroleum Institute, is suing to stop the federal government from enforcing the new greenhouse gas emission standards for new vehicles. These standards have widespread support among automakers, unions, the federal government, state governments, scientists, engineers and the general public. Regardless, ExxonMobil and the rest of the oil industry is getting in the way of exactly the kind of sensible step you say you support.
The future of fossil fuels and renewables
Rose: If you look at the future of fossil fuels, how long are those sources of energy going to be with us?
Tillerson: Timber was the principal energy source in the world; then suddenly coal came into the picture. It took about 50, 60 years for coal to displace timber and suddenly crude oil was found and it took about 60, 70 years for crude oil and natural gas. So it takes 100 years or more for some new breakthrough in energy supply to penetrate the market sufficiently to become the dominant source. ...
Most people I think have difficulty coming to grips with the sheer enormity of energy consumption. If we look at our own energy outlook--at things like renewable wind, solar, biofuels--we have those sources of energy over the next 30 years growing 700 to 800 percent. But in the year 2040, they'll supply just 1 percent.
Rose: So what's important is that as we look out there, there will be sufficient traditional fuels, oil, natural gas, coal to still power economies, while these new, newer sources are growing.
Tillerson: We have always said that it is important that we pursue all forms of energy because we are a technology-based company. We believe in technology. But we also know that we have an enormous responsibility. Because as I said, if I can look out for the next 30 years, in the year 2040, oil, natural gas and coal are still going to supply 80 percent of the world's income need, whether we desire that to be the future or not, that's just going to be the facts. So we're in that business.
Negin: Well, if that's the case, that fossil fuels will be supplying 80 percent of the world's energy demand in 2040, we'll be lucky if we will be able to cope. Extreme heat waves in Russia, Europe and Chicago over the last 10 years have already claimed the lives of more than a hundred thousand people. Rex's headquarters is in Texas. He can tell you about the devastating drought that has been plaguing his state for the last two years. The future Tillerson envisions would be the worst nightmare I could imagine.
I can offer you a rosier picture. I know Rex is talking about energy worldwide. But let's look at what we can do here in the United States over the next few decades. Wind, solar and other renewables now generate about 5 percent of our electricity, but by 2030 they could produce more than 40 percent, half coming from wind, according to a study by my organization, the Union of Concerned Scientists. That would just about replace the share currently generated by coal, which is responsible for most of the U.S. utility sector's carbon emissions. The Energy Department's National Renewable Energy Laboratory also is bullish on renewables. According to the lab, today's commercially available renewable technologies could easily generate 80 percent of U.S. electricity by 2050.
We also can slash oil consumption. The Obama administration already has done us all a big favor by making the first big improvements in fuel economy for cars and light trucks since the year Rex went to work for Exxon, and it also established the first ever U.S. global warming pollution standards for cars and trucks. The standards covering model years 2012 through 2025 will cut oil use by as much as 3.1 million barrels per day by 2030. That's more than what we currently import from any country, including Canada, which is now our largest supplier. Those new standards also will reduce U.S. global warming pollution by as much as 570 million metric tons in 2030 alone. That's the equivalent of taking 85 million of today's cars and trucks off the road for an entire year. And the big bonus is this better gas mileage will save drivers $8,000 over the life of a model year 2025 vehicle compared with the average vehicle on the road today. That's less money going to ExxonMobil and more money in your pocket.
And we can make an even bigger dent. We can double the fuel economy of commercial vehicles--delivery trucks, buses and big rigs. We can also make planes, trains and ships much cleaner and more efficient. Investments in electric vehicles and better biofuels will make them a great choice for many consumers, allowing them to avoid oil use altogether. And we can do all of that with technology that's already being developed. Engineers at the Union of Concerned Scientists have tapped into these kinds of practical solutions and devised a way to cut projected U.S. oil use by 50 percent over the next two decades. We call it the "Half the Oil Plan."
President Obama made climate change one of his top priorities for his second term. He ought to be looking at these proposals from the National Renewable Energy Lab and the Union of Concerned Scientists to fulfill that promise.
Tillerson's national energy priority? Undermine renewables
Rose (to Tillerson): Imagine this for a moment. The president of the United States calls you and he says, Rex, I would like you to come down to the White House and let's have a conversation. What do we need to do, would you say to him what?
Tillerson: Well, I think we need to agree on our national priorities around energy. Much of what has been done to this point has been an enormous amount of interference with that process of discovery. And it's been done by well-intended people. And I appreciate that it's been by well-intended people who want to promote the advancement of alternative energy sources. ...And whether that's, you know, battery technology or whether it's efficiencies in wind or whether it's transmission systems that behave in different ways. How do you want to supply the underlying research but then allow the commercial activities up here to move about in the free market?
Rose: You're saying less regulation and more research.
Tillerson: More fundamental research, less mandates. I mean, wind has received subsidies for more than 20 years now. Maybe if we took the subsidy off and it was challenged and had to perform, people would take it to a new level.
Rose: They haven't had to.
Tillerson: They haven't had to. So I think a lot of this is how do you want to structure our pursuit of our future energy supplies. And the president has said he is a proponent of all of the above. And we are, too. We are, too. That's a very sensible strategy.
Negin: Rex, it's bizarre that your top national energy priority is ending federal support for renewables. Especially since it's critical that we do all we can to promote them and dramatically cut oil, natural gas and coal.
You mentioned that the government has been subsidizing the wind industry for more than 20 years. You want to pull the plug. But what about the oil and gas industry's subsidies and tax breaks?
Charlie, do you know how long the government has been subsidizing oil and gas? Since 1918. And do you know how much the industry has averaged every year in tax breaks and subsidies since then? A whopping $4.86 billion in today's dollars.
Renewables have gotten peanuts in comparison. Between 1994 and 2009 they averaged only $370 million a year--less that 8 percent of what the oil and gas companies got. Yes, the 2009 stimulus package provided $21 billion for renewables, but that support hardly balances the scales that have tilted toward oil and gas for 95 years and coal for more than two centuries.
Another way to look at it is to compare energy subsidies during the first 15 years each technology received federal support, which is a critical time to get projects off the ground. For each technology's early years on the dole, the government spent in inflation-adjusted dollars an annual average $1.8 billion on oil and gas and less than $400 million on renewables.
The question is not whether the federal government should subsidize energy. It clearly has a role to play. The question is should taxpayers continue to underwrite extremely profitable, mature companies--especially highly polluting ones like ExxonMobil--at the expense of nurturing new, promising carbon-free alternatives? No. The obvious answer is no.
Both of you guys are old enough to remember that saying from the late '60s: "If you're not part of the solution, you're part of the problem." Well, ExxonMobil is not only part of the problem, it is the problem.
So please, Rex, spare me. ExxonMobil should stop trying to kill off renewables, and it should stop funding think tanks that mislead the public about climate change. You and your think tanks are all about the free market when it comes to renewables, calling for an end to their subsidies. But you're socialists when it comes to protecting the oil and gas industry's billions in subsidies and tax breaks. Isn't it time that ExxonMobil got off the dole so we can shift precious taxpayer resources to solutions that will help solve climate change, not make it worse?
Rose: We've run out of time, gentlemen. Thank you. Thank you for joining us.
Tillerson: My pleasure, Charlie.
Negin: Thanks, Charlie. Much appreciated.
Rose: Rex Tillerson, the CEO of ExxonMobil, the largest company in the world in terms of market capitalization. Elliott Negin, the director of news and commentary at the Union of Concerned Scientists. Thank you for joining us. See you next time.