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Brian Flannery: Well, I have a couple of comments. First, I would recall the case of synthetic fuels from coal. That was an approach where taxpayers and heritage Exxon lost a great deal of money. I hope we've learned from those experiences. We don't want to see that happen again. It isn't just a question of money; it's people and colleagues and investments in whole communities that are disrupted by bad decisions when public policy leads the way and remains long after the need is gone. I think the fundamental difficulty is how fast you do something.

For the purposes of this discussion, I didn't mention the other greenhouse gases, because this workshop is about carbon management. Otherwise, we might have talked about methane a little bit more. For this meeting, I wanted to raise some broad, general questions about how research needs to be focused on widespread, possibly global, technologies for 20, 30, or 50 years from now. In my view, it's up to the research community—and yes we have several points of view, but I think everybody does—and we need to sort through them and come up with priorities.

We have to identify the fundamental barriers to alternate energy production that limit the performance or keep the cost too high or create environmental barriers. We must find ways to focus on those, rather than on demonstration projects. It's not the time to rush these technologies into commercial use too soon in an uneconomic way. It's time to step back and say let's parse this system. Let's look at what it would look like. Let's identify the barriers, and let's go to work and research in those areas that limit use. That's what I think, but it's not just the performance side—it's cost, environmental acceptability, and safety.

Tom Brownscombe, Shell Chemical: I want to make one comment about the synthetic fuels. We had a similar experience, except we have commercialized the synthetic fuels process and are building another synfuel plant. But I wanted to ask you a question—does global warming prove itself to be a serious issue in your view, and why should we take precautionary action?

Brian Flannery: I believe your remarks refer to Shell's gas-to-liquids technology, a 1990s development. I was referring to technology to make liquid fuels from oil shales, an effort in the 1970s and 1980s. When folks speak of precautionary actions to address climate change, such actions should include a wide range of steps, research being one of them. Looking at and affecting technologies, and discovering what their barriers are is real action. It requires real resources. It requires real prioritization and thought. It's not “no action.”

I think all companies are taking action to become more efficient. For example, ExxonMobil has more co-generation capacity than any other oil company in the world. We produce over 2,000 megawatts. We didn't need credit for an early action to do that. It makes great economic sense, so we do it. As soon as the regulatory and enabling conditions are in place, we put it in place.

With strong management systems and disciplined investment efficiency, steps are easy to implement. We are also undertaking research with General Motors and with Toyota on advanced vehicles, including hybrid and fuel cell powered automobiles. However, fuel cell powered vehicles cannot be rushed into widespread commercial use. They are not economic today. But performing the research to create economic options is real and tangible action.



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