I appreciate the opportunity to join and speak with the leaders of our industry. CERAWeek is our world stage.
We gather here at a time of great opportunity. We have achieved progress in so many things: exploring new energy frontiers, developing new resources, applying new technologies, manufacturing new products, opening new markets, and forging new partnerships. At the same time, we have captured efficiencies, reduced emissions, and lessened our environmental footprint.
The net impact has been more energy for more people around the world, creating jobs and alleviating poverty.
We’ve seen progress not just in oil and natural gas, but also in the development of other energy sources, like wind and solar. The growth in alternative energy is important. The world needs options for all economic energy sources to meet the needs of growing populations and expanding prosperity.
Today, I want to talk about growth – not only energy and economic growth, but also growth in environmental progress.
I want to challenge the assumption made by many that a growing economy and a cleaner environment are mutually exclusive, that as we step forward in developing more oil and natural gas, our environment, including our climate, must step back.
All of us share the same aspirations – to live in a world that is clean, and safe, and prosperous. A place where our children can grow up looking forward to healthy and happy lives with higher standards of living. Affordable energy plays an important role in achieving this.
I believe the assumption that affordable energy and a cleaner environment are a zero-sum game is mistaken. It underestimates the power of technology. The zero-sum view is a static one, and the world of energy is anything but static. All things being equal, this view is understandable.
But technology changes the equation. It makes a dream – growing the economy while reducing emissions – a reality.
Through our research and technology organization, I have seen the transformative power of innovation. I believe in it. At ExxonMobil, we are determined to pursue it.
Take carbon capture and storage. It is a technology we have invested in – and will continue to. We currently have an interest in about one-quarter of the world’s carbon capture and storage capacity.
Last year, we announced a technology partnership to research whether carbonate fuels cells can be used to more economically capture carbon dioxide at scale – enabling widespread use.
By capturing CO2 in gas-fired power generation before it is emitted, this potential game-changer enables us to envision a future in which hydrocarbon use and de-carbonization go hand-in-hand.
We are advancing fundamental science and applying technologies in a number of areas that could lead to breakthroughs that re-define our manufacturing processes and products.
We have exciting, on-going work in advanced biofuels, catalysts, materials and manufacturing processes. Successful developments here could change our future and our impact on the environment.
Let me expand on a couple of these.
In biofuels, we are partnering with the Renewable Energy Group to explore production of biodiesel from agricultural waste.
Recently, we renewed our agreement with Synthetic Genomics to extend our industry-leading research in developing biofuels from algae. This program draws upon scientists from ExxonMobil and SGI to engineer new strains of algae that could enable production, at scale, of this low-emissions fuel.
In the manufacturing process area, we recently announced a new technology we call “cMIST” that enables us to more efficiently dehydrate natural gas. cMIST reduces the surface footprint for this process by 70 percent. It also reduces energy use and emissions.
Many more innovations are emerging from corporate, academic and government research centers from around the world. ExxonMobil alone is partnering with over 80 universities to explore new energy frontiers. Our scientists are working with MIT, Princeton, Stanford, the University of Texas and Georgia Tech – among others – to advance fundamental research that could significantly reduce emissions and profoundly shape our energy and environmental future.
Through our work with Georgia Tech, we have pioneered a new membrane for the process of reverse osmosis that enables us to convert oil and natural gas to higher-value fuels and chemicals. If we can scale it, this breakthrough could reduce global carbon-dioxide emissions up to 45 million tons, annually. Our findings were published last year in the peer-reviewed journal Science.
As we develop new technologies, we also continue to apply proven ones to reduce emissions and our environmental footprint.
We are incorporating fuel-saving technologies into a portfolio of innovative products that enable cars and trucks to go further with less, including advanced synthetic lubricants, improved tire liners and lightweight plastic body parts. If these existing technologies and others were applied to a third of the vehicles in this country, it would avoid greenhouse gas emissions equivalent to removing 8 million cars from the road.
The advanced plastics we produce for food and other packaging are yet another example of the power of technology to enable growth and reduce emissions. Our new polymers can make plastic films that are strong but light and thin. This helps to safely preserve food for longer, reducing spoilage, and ultimately reducing emissions.
We are a leader in cogeneration – a technology that uses waste heat to generate steam and reduces the need to burn fuel and emit more. ExxonMobil’s cogeneration capacity worldwide is the equivalent of the annual energy needed to power 2.5 million U.S. homes. That’s a sizeable environmental savings.
In addition, we are deploying an entire suite of technologies at our refineries and chemical plants to strengthen our environmental performance: new systems to recover gas that would otherwise be flared; specialized cameras to detect fugitive emissions so that they can be stopped; advanced burners to minimize emissions, are just a few. These applied technologies are good for the environment, and they’re good for business.
Reflecting on these examples, we can ask ourselves: What drives our industry to innovate?
Governments plays a role, for sure, but a supportive one. For example, they can help by opening trade channels and implementing smart regulations.
In the area of climate regulation, policies fostering transparent, uniform carbon prices that allow market forces to drive effective solutions, minimize administrative burdens and promote global participation can be effective.
But policies in the forms of subsidies, mandates and trade barriers only hinder progress. They are more expensive and lead to poor investment decisions, focused on the limitations imposed, not true innovation.
The real drive to innovate comes from competition in a free market. It comes from all of us striving to out-perform one another to find a cleaner, cheaper, smarter way to meet society’s needs.
When we win, we are rewarded in this market, and we use these rewards to invest in more technology and more growth. The only way to keep winning in a competitive market is to keep innovating.
Let me illustrate this with an example.
Here, in the United States, industry sparked a revolution – the shale revolution. We did this with a breakthrough applying hydraulic fracturing technology.
Hydraulic fracturing has opened up a whole new energy future for the United States, and potentially for many other countries. It is turning the US from energy importer to energy exporter. Today the United States is a top producer of oil and natural gas.
But this technology has done more than that. It is also incentivizing U.S. manufacturing to invest and grow.
One example – very close to home for me – is in the refining and chemicals sectors. These businesses are leveraging the shale revolution to manufacture cleaner fuels and more energy-efficient plastics. We are using new, abundant, domestic energy supplies to provide advantaged products to the world.
In this way, an upstream technology breakthrough has led to a downstream manufacturing renaissance. It has created new manufacturing jobs, investment and exports.
And, very importantly, we have managed to create these benefits while reducing the environmental impacts.
Natural gas, including the gas produced from shale, is cleaner burning than coal. The increased use of gas is decreasing emissions. The United States is now emitting fewer greenhouse gases than it has in a generation – thanks largely to fuel switching to natural gas.
At the same time, we are using technology to reduce the environmental impacts of natural gas production.
Recently, for example, we worked with Stanford to develop new software for estimating the potential impact injection wells could have on seismic fault lines. Better understanding and managing this environmental risk is one of industry’s key priorities. This tool will help.
If we stop and think about it, we have managed, in the United States, to accomplish what was practically unthinkable only a decade ago. At the turn of the century, analysts were predicting “peak oil” and that we would soon be undersupplied. Today, we see the opposite – abundant supplies at lower emissions levels. It’s a remarkable development.
This afternoon, I’d like to announce a new chapter that ExxonMobil is writing in this technological, manufacturing and environmental success story.
It is part of our continuing investment program we call “Growing the Gulf.” In 2013, we started expanding our manufacturing operations along the Texas and Louisiana coasts to capitalize on the domestic shale revolution. We are looking to continue that program through at least 2022 with even more growth. All told, “Growing the Gulf” will represent $20 billion in investment over ten years in 11 different projects.
“Growing the Gulf” is about more than increased manufacturing capacity, though. It is also about increased exports. These projects are export machines, generating products that fast-growing nations need to support larger populations with higher standards of living. These overseas markets underpin our investments. The supply is here; the demand is there. We want to keep connecting those dots.
Importantly, “Growing the Gulf” also creates jobs. Lots of them. All told, we expect these 11 projects to create over 45,000 jobs. Many of these are high-skilled, high-paying jobs – averaging about $100,000 a year. They will also have a multiplier effect, creating many more jobs in the community. ExxonMobil is building a manufacturing powerhouse along the U.S. Gulf Coast.
As we look forward, our opportunity is to grow. It is also our responsibility. The world’s energy industry, represented here today, is the engine of the world’s economy. We help make the world work.
As populations grow, and with them dreams of a better future, it is our job to help make those dreams a reality, by continuing to produce energy, reduce emissions and deliver growth.
Thank you very much.