The world’s largest publicly traded energy company has given the biggest lift in recent times to hopes for the Mackenzie Gas Project.
ExxonMobil President Rex Tillerson, speaking for his Canadian subsidiary — the smallest and quietest of the Mackenzie Delta gas owners — said he expects the pipeline will proceed based on progress towards resolving “a number of long-standing issues.
“We’ll ultimately get across the finish line on this thing,” he told reporters in Calgary, while observing that “it’s a long process and there’s a lot of interests that need to be addressed.”
While Imperial Oil, ExxonMobil Canada’s sister company and lead partner in the Mackenzie consortium, has expressed misgivings lately about the chances of overcoming aboriginal access and benefits demands, Tillerson raised optimism that the Mackenzie partners will request public hearings when they report to Canada’s National Energy Board by Nov. 18.
But he offered no further explanation to support his confidence, nor did he provide a timeline for the project.
Murray Smith, Alberta’s former energy minister and now the Alberta government’s representative in Washington, D.C., agreed with Tillerson that the Mackenzie pipeline is “desperately needed for North American markets; it’s desperately needed to add gas to the North American inventory, which you’ll see this winter is going to be a very interesting scenario.”
Tillerson doubts windfall profit tax
Tillerson, poised to succeed Lee Raymond as ExxonMobil’s chief executive officer in 2006, doubted the U.S. Congress will support a push to impose a windfall profit tax on U.S. oil producers. He said such a cash grab would undermine Washington’s efforts to reduce U.S. dependence on imported energy.
“We experienced a windfall profits tax over 20 years ago and the result was a reduction in the development of domestic supplies of crude oil and natural gas,” he said.
“I don’t think that’s a policy solution that anyone is going to find very attractive,” he said.
“The industry has to have the resources when times are good to carry it through when times are not so good,” he said, noting that ExxonMobil made US$15 billion in capital investments when oil prices slumped in the late 1990s.
Tillerson said rash decisions in response to short-term conditions, while ignoring the large investments and long lead times needed to bring new supplies into production, will be counterproductive to U.S. energy needs.
