We should ensure energy security by encouraging investments and avoiding policies that could result in excessive oil price increases that would threaten the fragile global economic recovery. This is the message given to the United States administration by Rex Tillerson, number one at ExxonMobil – the biggest American oil company in terms of market capitalization – on the occasion of a meeting organized by the Houston World Affairs Council, during which he was presented with the Jesse H. and Mary Gibbs Jones International Citizen of the Year award.
So is the real issue energy security, rather than energy independence?
I don’t see why the United States should not benefit from the energy resources of countries such as Canada, Mexico, and many others. It is absurd to aim for energy independence. It is not realistic. The best way for the people in government to sustain the economy would be to ensure fair competition and stable policies so that companies can plan long-term investments.
At what level do oil prices risk having a negative impact on the global economic recovery?
It is hard to say what price level would have the effect of inhibiting growth, but we have seen that if gasoline reaches $3 a gallon people start to change their habits and use their car less. If it happens to reach four dollars, we may see a deterrent effect on the recovery. We are still not completely out of the last economic recession, so I am worried about the fact that energy prices could become a slowing factor. Gasoline prices started to have a negative impact on fuel demand when they reached $3 to $3.50 dollars a gallon. If this threshold is passed the impact could become permanent in terms of a drop in demand.
Businessman and diplomat, Wayne Rex Tillerson is the 69th and current United States Secretary of State, serving since his confirmation on February 1, 2017. Born in Wichita Falls, Texas, Tillerson has a degree in civil engineering from the University of Texas at Austin and, in 1975, he joined Exxon Company USA as a production engineer. After the appointment, in August 2001, as Senior Vice President, he was elected in March 2004, President of ExxonMobil and member of the Board, assuming then, from 1 January 2006, the position of CEO of the same company, position he held until his appointment as head of the US diplomacy.
Are you afraid that an increase in oil production royalties and taxes, especially for deep water, could become economically unsustainable?
I am worried about some of the political decisions that are being made in this country because they could elevate energy costs, reducing the earnings of companies and thus reducing investments. The people in government have to realize how incredibly large the extraction capacity is when operating at low margins. Greater access is needed for offshore areas, onshore areas, and especially unconventional gas-rich areas such as the Rocky Mountains in Colorado and Utah. The Obama administration has taken steps forward on energy issues but the regulatory approach has to be less precautionary and based more on the cost-benefit ratio.
Is the investigation on shale gas started by the EPA, the United States agency for the protection of the environment, a cause for concern?
Any government investigation on the safety of shale gas extraction techniques is welcome; we have nothing to fear. Hydraulic fracturing has been used for sixty years. It is a well-known procedure that involves very low risks. This new investigation is welcome; it is the third one, and no sort of water contamination has been discovered. We do not consider the investigation to be a threat to the development of these enormous reserves.
Will ExxonMobil be participating in the new auction for the allotting of licenses for the development of oil and gas fields in Iraq?
We will decide after evaluating the terms and conditions.