Car drivers filling up with natural gas not likely: Exxon Mobil’s CEO
People will learn to adapt to a warmer climate and car drivers will not be retrofitting their vehicles to fill up with natural gas, said Exxon Mobil’s CEO, Rex Tillerson, who spoke on a wide range of topics at the Council of Foreign Relations on Wednesday.
Tillerson discussed climate change and the impact of the natural gas revolution on the US, which he called amazing.
Despite the low prices for natural gas, Tillerson doubted the general population would make the switch because the conversion cost per vehicle is too high. There also won’t be a build out of natural gas fueling stations.
The Associated Press reports that natural gas futures are at $2.722 per 1,000 cubic feet. In April natural gas hit a ten-year low of $1.91.
While individual drivers may not make the change, Tillerson says it may make sense for a company that has a fleet of vehicles and enjoys economies of scale, like a UPS.
Tillerson says the low prices can’t last.
“What I can tell you is the cost of supply is not $2.50 . We are all losing our shirts today. We are making no money. It is all in the red. ”
Tillerson says the price and demand signals are out of whack.
“Today we are seeing these very low prices because the industry overshot when we had those $6, $7 and $8 prices and we over-developed the supply.”
Tillerson does see natural gas coming to power plants for electricity generation. Over the next 25 to 30 years, Tillerson predicts natural gas demand worldwide will grow 60%, and it will be the world’s fastest growing energy source. A long-term, secure supply of natural gas could also rejuvenate the manufacturing sector in the US.
Tillerson pushed back on climate science warning of dire outcomes from the build up of greenhouse gases. While admitting that the globe has been warming, Tillerson says how that will play out is unclear.
“Our approach is that we look at the range of the outcomes and try to understand the consequences of that and clearly there is going to be an impact. How large it is is very hard to predict.”
If there is change, people will adapt.
“That is why we are here. We have spent our entire existence adapting.”