the changing climate

 June 1, 2007

An interview with Sherri K. Stuewer, vice president, Safety, Health and Environment

There is growing public concern today about climate change. Do you share that concern?

We have followed this issue for more than two decades, so we understand the current concern well. In fact, two of our scientists are lead authors of Intergovernmental Panel on Climate Change (IPCC) reports, so we are directly involved in the international policy discussion. Based on these experiences, we recognize that climate change is an important global issue, involving risks that could be significant for society and ecosystems. We take it very seriously, and we are working on our own and with others toward approaches that address the risks, while protecting economic growth and social progress.

What is your understanding of the current state of climate science and the need to control man-made greenhouse gas emissions?

Climate science is far more complex than the simplified version we see in many media reports. We know that the earth's climate has warmed about 0.7 degrees Celsius over the past century and that many global ecosystems, including the polar areas, are showing signs of warming. Carbon dioxide (CO₂) emissions have increased over that period, with an important source being the burning of fossil fuels. There is a risk that human activity, including man's use of fossil fuels and land use changes, is contributing to climate change, so it is prudent to develop and implement strategies to address that risk. At the same time, we must also continue to improve our understanding of climate science so that policies and actions can be adapted as we understand the risks better.

ExxonMobil's Energy Outlookpredicts nearly a 40 percent rise in CO₂ emissions through 2030.  What is driving that growth?

As populations and economies expand, energy use rises, resulting in increased CO₂ emissions.
About 80 percent of the anticipated growth in emissions is expected to stem from developing countries, such as China and India, as they continue to modernize and develop their economies. Remember that 2.5 billion people today lack access to modern energy. These growth predictions, which are consistent with other forecasts, show the challenge of achieving meaningful emissions reductions when developing countries are working to bring their citizens the quality of life that we in the more industrialized world take for granted.

Can meaningful emissions reductions be achieved without the developing countries?

There are certainly many opportunities to reduce emissions in the industrialized world, and this will help to slow the rate of growth of global greenhouse gas emissions. But with the developing world's share of global energy use expected to rise from about 50 percent today to almost 60 percent by 2030, it is hard to see how any substantive decrease in the world's emissions total can be achieved without the participation of countries where emissions are rising most rapidly.

How much is achievable by improving today's technologies, and how much depends on new breakthroughs?

There is tremendous potential for emissions reductions from the deployment of good, existing technologies. However, we would need breakthrough technologies to achieve a goal of stabilizing the amount of carbon in the atmosphere. That is why a focus on fundamental, 'game-changing' research, and not just incremental improvement, is so important — one reason why we initiated the Global Climate and Energy Project (GCEP) at Stanford University in 2002.

In your view, which technologies hold the most promise?

There are no silver bullet solutions today. There are many interesting options, but further research and development are needed to see if they can be applied on a scale large enough to make a difference and be affordable. Of the emerging technologies, carbon capture and storage (CCS) is promising, particularly as many companies, including ExxonMobil, have industrial-scale experience with its component technologies. However, there are still questions about its viability, which is why we support global research in this area, including participation in the European Commission's CO₂ReMoVe project. Most long-term mitigation studies also conclude that more nuclear energy will be essential, as without it, costs rise rapidly.

What are the challenges for ExxonMobil in reducing emissions from your operations?

First, as a large energy consumer, we have concentrated on energy efficiency for a long time, so we have already implemented the most economically attractive opportunities. Second, demand for our products continues to grow, so efficiency improvements can be offset by growing production, like last year when our total CO₂ emissions rose 5 percent, despite taking steps in our operations that reduced emissions by 2 million metric tons. To address these challenges, we are working hard on further energy efficiency improvements and reductions in gas flaring. Both have improvement targets under our environmental program, 'Protect Tomorrow. Today.'

Why do you focus so strongly on energy efficiency to reduce emissions?

Energy efficiency reduces environmental emissions, extends the availability of the resource base, reduces operating costs and helps make energy more affordable. As work continues on longer-term solutions, energy efficiency avoids emissions in the near term. For example, energy efficiency steps taken since 1999 resulted in 8 million metric tons of avoided CO₂ emissions from our operations last year — equivalent to taking 1.5 million cars off America's roads. And our growing investment in energy-efficient cogeneration technology saved more than 10 million metric tons of CO₂ emissions in 2006 — equivalent to taking another 2 million cars off America's roads.

How important are improvements in vehicle emissions?

Vehicles, including trucks, account for about 20 percent of global CO₂ emissions, and vehicle ownership is growing rapidly in the developing world. Total emissions from vehicles are several times greater than emissions from the facilities that produce the fuels, so vehicle emissions are an important focus area. New technologies, such as hybrids, have a role to play. But improving the efficiency of conventional engines is important, too. We are working with auto and engine makers on programs that could deliver up to 30 percent fuel economy improvement, while we also work on longer-term opportunities for vehicles in areas such as hydrogen.

Does ethanol hold promise for reducing CO₂ emissions from transportation fuels?

As one of the world's largest blenders of ethanol, we know its capabilities well. Ethanol has a 30 percent lower energy content than gasoline, so you need more to go the same distance. Corn-based ethanol requires a lot of land, water and nutrients, which can impact the price of food and other corn-based products. It also requires a lot of energy for fertilizer, cultivation, harvesting, processing and distribution, so any overall CO₂ benefit will depend on the methods used. Advanced cellulosic ethanol could potentially overcome some or all of these challenges, but technology breakthroughs are needed. So while ethanol holds promise, much will depend on efforts to improve the yield per acre of the feedstock, and we are far from being able to judge its longer-term contribution.

Many people see potential in other renewable energies like wind and solar, but ExxonMobil has not yet invested in these businesses. Why not?

Wind and solar both hold promise, but today's wind and solar technologies cannot be scaled up to make a significant world-scale contribution. Major technology breakthroughs are needed if they are to supply more than a small fraction of the world's energy. GCEP includes fundamental research to overcome the barriers to progress of many new energy technologies, including renewables. We continue to look for opportunities where our expertise could help make a new energy technology viable on a large scale.

GCEP has been running for four years now. Have there been any breakthroughs?

GCEP's research is at a very fundamental level, and you would not expect 'eureka' breakthroughs early on. But it is moving the ball forward on several technologies, and a number of patents have been filed. The work is also helping to prioritize research areas and identify constraints in the various technology options. GCEP has successfully attracted some of the world's best scientific minds into the energy field and is training talented young researchers — an important step in the immense challenge of finding ways to meet future global energy demand with far less emissions.

What do you think are the biggest challenges facing climate policymakers?

Policymakers must grapple with several complexities, including the uncertain impact of emissions over time, the uncertain cost of reducing emissions, the need for global action and the long time frame of this issue. Climate change will be addressed over decades — far longer than any political term in office — and over time, our understanding of climate science and experience with mitigation options will grow. So it is important that policymakers take care that policy measures not only make short-term progress, but also provide a good framework to manage the issue over the long term.

What do you think the priorities should be for policymakers?

First and foremost, a policy that establishes a uniform, predictable cost for carbon or CO₂ across the whole economy will deliver results most effectively. The free market, responding to a transparent cost signal, is the best engine for selecting and deploying technology for emissions reductions. It is also important to recognize that no domestic policy can be effective on a global issue like this one without a way to promote global participation. Finally, a policy should be transparent and not weighed down by administrative complexity, and it must be able to be changed as we better understand the risks involved.

There has been a lot of debate recently about whether a 'cap and trade' system of emissions allowances or a carbon tax is a better option. Do you have a view?

We do not advocate either policy option, because poorly considered versions of each could have negative consequences. What is important is to recognize the basic pros and cons of any approach. 'Cap and trade' operates like a rationing system — the emissions reduction is defined, but the price of achieving it is uncertain. This cost uncertainty can be a deterrent to investment, and the allocation process can be politically challenging. By contrast, a carbon tax provides certainty in terms of energy costs, but no certainty on the level of emissions reductions. The economic impact of a tax depends strongly on how the revenue is used. Either approach could have negative implications for economic competitiveness if nations do not act together.

Do consumers have a role in addressing climate concerns?

About 40 percent of energy-related carbon emissions in the U.S. result from consumers' energy use at home or on the road, so the decisions all of us make in the way we live and travel can have a profound effect on emissions. In the end, industry, governments and consumers all have a role in addressing this challenge. Only by working together to find approaches that allow environmental protection to go hand in hand with economic development can we be successful.