CERAWeek: Exxon's not just about oil

Michael Dolan, senior vice president of Exxon Mobil, repeated the call today that the current downturn is temporary and demand will return. He notes energy demand will grow by 25 percent by 2030, even with efficiency gains.
Dolan also noted the many non-E&P efforts the company is working on, such as “homogenous charged compression combustion” engine systems which improves engine efficiency, work with tire manufacturers on new technology that uses less material making them lighter and better able to hold pressure (low tire inflation can burn an extra gas of tank a year, he noted) and battery separator films for lithium ion batteries to improve technologies.
He also repeated the call his boss, Rex Tillerson, made a few weeks ago to regulate greenhouse case through a carbon tax, not a cap-and-trade system, which is the way the U.S. government is now tilting. He notes it’s a less risky way to mean the goals of reducing greenhouse gases without introducing new financial intermediaries (i.e. the banks looking to make money off trading and arbitrage) or creating vast new bureaucracies.
Daniel Yergin asks a few questions:
Q: How high should a carbon tax be?
A: [paraphrase] if you look at the different between them, a carbon tax governments can put out there for a certain number of years, they can revisit it every few years, but we as business people can look out and know what it means and what kind of investments we want to make.
With cap and trade the cost floats. Exxon has been involved in the carbon trading system Europe, he said, and knows first-hand about how it can change.
Q: Is there a role for plug-in Hybrids.
A: [paraphrase] Yes, but there’s a lot that need to happen to the technology. Drivers are used to getting 300 miles per fill-up and that’s nowhere near happening yet.
Q: Early 1980s last time had two years of demand downturn. How much of the current drop is due to the downturn, how much demand destruction etc?
A: Exxon thinks will continue to grow, by 2030 will still be 60% oil and gas. The company tends to just focus on long term trends and not pay attention to the short-term changed, Dolan said. He thinks energy efficiency improves about 1.7 percent per year, but still huge growth in demand ongoing. [He didn’t really answer the question, it seems!]