ENERGY POLICY:

Exxon Mobil CEO pivots on climate, slams 'manufactured fear' on fracking

Rex Tillerson, CEO of Exxon Mobil Corp., said yesterday that people will adapt to new living conditions that arise because of global warming and that engineers will find ways to work around a rise in sea levels or a disruption of agriculture. Tillerson also said that fearmongering, lazy journalists and an illiterate public complicate his job running the world's most closely watched oil company.

The remarks seemed to be a departure for the 60-year-old Tillerson, a deliberate, even-tempered and relaxed speaker who, since becoming CEO six years ago, has appeared to intentionally differentiate himself from Lee Raymond, his brusque, tempestuous predecessor. Most pointedly, Tillerson has abandoned a signature Raymond policy -- Exxon Mobil's funding of writers who challenged prevailing climate science with tracts that Raymond and other critics brandished as evidence that global warming was a hoax.

Tillerson struck new ground in seeming to embrace a mainstay of climate science's harshest critics -- that the public should accept that climate change is coming -- and appearing to ridicule those who in his view possibly stand in Exxon Mobil's way.

Analysts tend to scrutinize Exxon Mobil because of its size and a record of rivals following its lead.

As he has previously, Tillerson, speaking at the Council on Foreign Relations in New York, said he accepts that rising carbon dioxide levels in the atmosphere are "going to have an impact" and proceeded to question the credibility of predictive climate modeling. He said that, using today's science, no one can know what precisely "the future's going to be."

But Tillerson seemed to pivot on his public positioning by remarking that, whatever the consequences of global warming, "we believe those consequences are manageable." He seemed to suggest that the impacts may not be as extreme as some scientists forecast.

The impacts "do require us to begin to exert -- or spend more policy effort on adaptation: What do you want to do if we think the future has a sea level rising 4 inches, 6 inches? Where are the impacted areas, and what do you want to do to adapt to that?" Tillerson said. "And as human beings, as a species, that's why we're all still here. We have spent our entire existence adapting, OK? So we will adapt to this. Changes to weather patterns that move crop production areas around -- we'll adapt to that. It's an engineering problem, and it has engineering solutions. And so I don't -- the fear factor that people want to throw out there to say, 'We just have to stop this,' I do not accept."

Tillerson said that other issues eclipse global warming in importance, in particular delivering electricity to hundreds of millions of people without access to power. "I think there are much more pressing priorities that we as a human being race and society need to deal with," he said. "There are still hundreds of millions, billions of people living in abject poverty around the world. They need electricity. They need electricity they can count on, that they can afford. They need fuel to cook their food on that's not animal dung."

"There are more people's health being dramatically affected because they could -- they don't even have access to fossil fuels to burn," he said. "They'd love to burn fossil fuels because their quality of life would rise immeasurably, and their quality of health and the health of their children and their future would rise immeasurably."

Fomenting fear on fracturing

On the issue of energy security, Tillerson embraced a growing industry belief that North America is moving into an oil-boom period. He forecast that Canada, Mexico and the United States combined will add 3 million barrels a day to their combined current production of 15 million barrels a day by 2020, a bit lower than more bullish recent forecasts of 20 million barrels a day made by others, but still a robust projection.

But he suggested that forces outside the industry are acting to frustrate this future by fomenting unnecessary fears about hydraulic fracturing, or fracking, a drilling method used to extract oil and gas from barely porous shale. It is fracking that is principally responsible for the U.S. dimension of the fossil fuel bonanza.

Certain individuals or groups -- Tillerson did not identify who -- are fabricating flaws in the record of fracking, he asserted, and an unknowing public is having trouble sorting out the truth. "The pace at which these things occur oftentimes [confounds] our ability to deal with the manufactured fear, our ability as an industry, working with well-intended regulators and policymakers to address the fears," Tillerson said. "It requires a lot of education, requires taking an illiterate public -- illiterate in the sciences, engineering and mathematics -- and trying to help them understand why we can manage these risks.

He cited "Gasland," the 2010 Josh Fox documentary, as the worst offender, having done "more to set us back in this endeavor than anything else out there, and yet every aspect of that movie has been completely, scientifically debunked. Nobody's written that story. I don't know why, but nobody's written that story." (Last year, Greenwire did a side-by-side evaluation of Fox's film and his critics' complaints. It found problems with both sides of the debate.)

The media by and large fall down at the job of separating truth from fiction, Tillerson said, presenting a business risk to Exxon Mobil, since public perceptions affect its ability to do business. "For whatever reason, a large number of people in the journalism profession simply are unwilling to do their work. They're unwilling to do the homework," he said. "And so they get something delivered to them from the manufacturers of fear. It makes a great story."

Tillerson said, "We deal with it from a risk management standpoint, because these present risks to us, as well. We have to understand what's going on. It's a question of will people do their homework? And what I'm finding is that a large segment are just lazy. They just don't do their work. It's as simple as that."

Ultimately, he said, public policymakers will determine the scale of the fossil fuel bonanza. "It's simply a matter of policy. It's simply a matter of choosing. You know, John F. Kennedy once said in a speech that to lead is to choose. Well, we need to choose. We need to choose. Are we going to have energy security and are we willing to deal with the real fears, the real concerns, and manage the risk and acknowledge that we can do that? And when we put it on the scales and balance what's in the best interest of society and our peoples, are we going to have a policy that allows this to happen?

"It's not clear to me that we are," Tillerson said. "It's not a foregone conclusion that we will. It's very much an open question. But I think it's an important question for not just the United States, it's an important question for North America."