Exxon on alternatives: No change

Alternative energy initiatives, particularly in power generation, are getting a $100 billion boost from the Obama Administration’s economic stimulus package. But Exxon Mobil isn’t jumping on the train while alternatives and renewables still need subisides to be economical.
Rex Tillerson, Exxon’s chairman and CEO, got a question from Barclays Capital analyst Paul Cheng at the company’s annual analyst meeting in New York today asking whether Exxon would invest in alternatives more aggressively to get a foothold as government funding prompts more development.
Exxon invests in research into alternatives and renewables, but consistently declines to do more until alternatives can make money without subsidies or tax credits.
Tillerson said the company’s stance remains unchanged, particularly because alternatives make up a fraction of the nation’s energy use and fossil fuels are widely expected to provide the majority of the world’s energy for decades.
Alternatives’ and renewables’ reliance on subsidies diminishes their value to shareholders because they aren’t economic on their own. Tillerson doesn’t want Exxon to pour money into something dependent on subsidies only to have the government yank it later.
“Actually, what they’d do, they’d just cancel it for us,” he said.
He said the company doesn’t oppose development of alternatives, but to hang energy’s future on them misrepresents their size and scale.
“To say you’re going to double it through the stimulus in three years–well, that’s double from a half a percent to 1 percent. I’m not belittling the objective; I hope no one takes it that way. ”
But starting from such a low base means it will take enormous execution and installation capacity that isn’t there yet, nor is the consumption, he said.
“It’s going to play out over a very long time. That’s the view we take,” Tillerson said.

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