Exxon chief praises energy research
Rex Tillerson, the president and CEO of Exxon Mobil Corp., spoke on campus Tuesday night, praising the work of Stanford researchers and—in a recent switch of company policy—urging Congress to pass a carbon tax to reduce greenhouse gas emissions.
Exxon Mobil is the largest sponsor of Stanford's five-year-old Global Climate and Energy Project, a collaboration of academic researchers and industry. GCEP's mission is to conduct fundamental research on technologies that will permit the development of global energy systems with significantly lower greenhouse gas emissions.
Tillerson described GCEP as "an extraordinary collaboration of scientists, engineers, researchers and students" leading the way toward innovative, long-term technological solutions to "the most vexing energy and technological challenges of our time." GCEP is directed by Sally Benson, a professor (research) of energy resources engineering.
Tillerson first announced Exxon's support of a carbon tax last month in Washington. D.C. Supporters contend that a tax on carbon emissions, whether from refinery smokestacks, power plants or automobiles, will provide a financial incentive for lower-emissions technology. But any carbon tax, he said, should be offset by tax cuts elsewhere.
During his talk at the Frances C. Arrillaga Alumni Center, Tillerson, who spoke with a Texas drawl, made clear to the audience that by supporting a carbon tax, he hoped to avoid what's known as a cap-and-trade approach to carbon reduction.
In a cap-and-trade regime, companies in a certain industry—refineries, perhaps—would be granted permits to release a certain amount of carbon dioxide. A company coming in under its limit may profit by selling the unused portion of its permit to companies unable to meet their goal. The advantage of cap-and-trade, proponents say, is that it provides financial incentives for the industry as a whole to meet emissions levels, which could be steadily lowered over time.
But Tillerson and others warn that the trading of permits on the open market would be unpredictable. A Wall Street trading process would be "all about moving money around," he said in an earlier speech.
Whatever avenue regulators eventually take, the country must have a long-term strategy, he said: "We need a 30-year energy policy. We don't need a 10-year policy. Ten years will get us nothing."
And while the world waits for new technology—he cited, as an example, GCEP work on organic polymers for more efficient solar cells—oil is going to be the tried-and-true answer to the demand for more energy, Tillerson said.
"Growing populations in developing countries who are seeking higher standards of living will drive this increased energy demand, which is expected to be 35 percent higher in the year 2030 than it was in the year 2005, despite the current and temporary economic conditions," he said.
By 2030, China's carbon-dioxide emissions will be comparable to those of the United States and Europe combined, he said.
To this end, he said in response to a question from the audience, oil companies must drill in the United States, on government land holdings. "They belong to you and me," he said.
GCEP, established in 2002, has four sponsors, who together will spend $225 million over a decade or so: Exxon Mobil, the energy company; General Electric, builder of power-generation technology; Schlumberger, an oilfield services technology company; and Toyota, the auto manufacturer.
The donations fund collaborative research by 24 institutions around the world, from Stanford to Harvard, Belgium's Ghent University and the University of Sydney.
"GCEP's research is high risk; failures will likely outnumber successes in gaining promising leads for advanced technologies," Tillerson said. "But the research conducted here is also potentially high yield. It may contain the seeds of a true, technological transformation."