Interview: Exxon warming up to climate change[fr][de] 

"We are not a denier; we understand that the climate is changing. I know a number of people like to label us that way but the fact is we're not," said Ken Cohen, vice-president for public affairs at ExxonMobil in an interview with EurActiv.

With growing legislative activity surrounding climate change in the US Congress, ExxonMobil is seeking ways of preserving its interests when lawmakers eventually get to the drawing board.

"There are two debates that one can be participating in right now," said Ken Cohen, vice-president for public affairs at ExxonMobil. "One is: is climate change real? What is the cause? Call it the blame game or whatever you want. And the other discussion is: what do we do about it? We prefer to be involved in the second discussion."

However, Cohen also warns that "anything that effectively puts a cost on carbon out in the economy" will have "an impact on economic development."

"We need to keep in mind the economic impacts of the policies," says Cohen, underlining that policy options "need to be able to be adjusted as we learn more on the science side".

Exxon has reasons to believe that US legislation to curb greenhouse gases could be painful as it says it is already struggling to deal with the EU-trading scheme for CO2 emissions which affects its operations in Europe.

"The thing that makes it very difficult for us when we make investments under the European system is that the cost [of carbon] on a forward basis is far from predictable and the cost even on a near-term basis is volatile," said Sherri Stuewer, vice-president for safety, health and environment at ExxonMobil.

"If you are setting a cap or a rationed amount of carbon, you are always in the process of guessing what demand will be. And it is difficult to do that. We know in our own business that forecasting supply and demand is nearly impossible."

"So I have the situation where our businesses in Europe are coming and asking us what is the outlook in the long-term for the price of carbon to justify investment projects. And we really do not have a basis on which to give them an answer."

Both Stuewer and Cohen say that Exxon would rather have something different implemented in the US. They contrast the EU's 'downstream' cap-and-trade system where CO2 is regulated at the point of emission - by industrial emitters such as power plants, metals, or chemicals factories - with an 'upstream' system where CO2 is regulated at source.

"An upstream system puts a limit on the carbon at the point that the fuel enters commerce," Stuewer said. "So it would be at the coal mine, at the output of a natural gas processing plant or at a refinery where fuels are entering commercial trade."

The main advantage of an upstream system, they argue, is that it deals with a much smaller number of industries. "There are a lot fewer people who are making and selling fuels than are consuming them," says Cohen. 

"One reason is that it applies to all fuels so it very efficiently goes across the whole economy. You don't have to fuss with how to bring in the airline industry for example because the costs are on the fuel."

"It is a very easy way to get a price signal on carbon across the whole economy in a uniform way".

And to make carbon prices predictable in the long-term, Cohen and Stuewer say that a "safety valve" could be added to the scheme in the form of a price ceiling.

"If you have a safety-valve price it means that this price over time establishes a level of certainty."

"We think it is important to get a uniform and predictable cost for carbon across the economy and then let the markets pick the technologies that can deliver reductions at that cost as opposed to having governments trying to dictate particular technologies," Stuewer said.

Turning to future business, Exxon is sceptical about existing renewable energy technologies and prefers to focus its effort on "high-risk, high-reward breakthrough technologies that could really make a difference" in lowering greenhouse-gas emissions.

"We are not saying that there isn't anything that you can do right now," said Stuewer who mentions energy-efficiency in electric appliances and buildings as holding "tremendous potential" to reduce emissions.

"Energy efficiency has a lot to offer in the short term but what we are trying to say is that efficiency and today's technology will not solve this problem [climate change] in the long term," said Stuewer. 

"We need more, we need new technologies."

And this is where Exxon believes it can make a difference with an R&D programme it recently launched in partnership with the prestigious Stanford University.

The Stanford programme includes research into second-generation biofuels made from wood residues and cellulose which could produce higher yields per acre.

Indeed, Exxon is openly critical about today's biofuel technologies based on crops such as corn-base ethanol. "These fuels are going to be growing at very rapid rates but they are growing because they're receiving substantial subsidies," says Cohen.

"We are focusing on the R&D to make viable businesses that will stand on their own two feet," he added.

Click here to read the full interview