Exxon CEO Says Europe Should See Climate Benefits of Shale Gas
Exxon Mobil Corp. CEO Rex Tillerson said Europe should see the “tremendous environmental benefits” of producing natural gas from shale, pointing to the U.S. output boom as a model for cutting greenhouse-gas emissions.
“Natural gas and shale have been instrumental in reducing CO2 emissions to levels not seen since the 1990s” in the U.S., the chairman and chief executive officer of the Irving, Texas-based company said at the World Gas Conference in Paris Tuesday. “U.S. gas production has soared and emissions have declined” as the fuel replaces coal facilities that emit more greenhouse gases.
European oil companies including Royal Dutch Shell Plc, BP Plc and Total SA are promoting gas as a way to limit the growth of emissions blamed for climate change. They have also called for a price on carbon dioxide. Tillerson said the U.S. example shows emissions can be reduced using technology and free markets, without requiring a carbon price.
Exxon, Chevron Corp. and other producers have unsuccessfully attempted shale drilling in Europe, where Tillerson said “there’s significant and meaningful natural gas potential.” Chevron pulled out of western Ukraine last year, months after Shell retreated from the eastern provinces riven by a bloody war with pro-Russian separatists. Exxon and Chevron failed to find gas in commercially large volumes in Poland.
France and Germany are among European nations that have banned or blocked hydraulic fracturing, or fracking, used to crack open shale-rock formations to release oil and gas. The U.K. is reviewing permits amid concerns drilling techniques could pollute water sources and cause earthquakes.
No commercial volumes of gas are produced from shale in Europe. The U.S. Energy Information Administration estimates Europe has technically recoverable shale gas reserves of 470 trillion cubic feet. France has the highest resources -- 137 trillion cubic feet -- after Poland. The U.S. has 567 trillion cubic feet of shale reserves, according to the agency.
The U.S. shale boom was helped by laws that give individuals ownership of the oil and gas beneath their property, something that doesn’t exist elsewhere, BP CEO Bob Dudley said at the conference. That’s a primary reason shale output has not spread outside North America, said B.C. Tripathi, chairman of GAIL India Ltd., the nation’s biggest gas distributor.
“Certainly technology is a huge part of the solution,” Dudley said. “We think a carbon price is also essential.”