Oil and Gas

Energy System Needs Overhaul: Former Exxon CEO


America's aging energy infrastructure will require massive investments in order to make much needed efficiency improvements, former Exxon Mobil Chief Executive Lee Raymond said on Monday.

"It's not enough to just look at solar cells or windmills or whatever. You also have to get your head around the infrastructure that's required to have those things be effective and involved in the energy system," Raymond said, speaking at the Council on Foreign Relations in New York.

"It's huge physically, without even debating where those things are going to be built. It's huge financially, and it takes a long time."

Raymond is now the chair of the National Petroleum Council, a high-level board of U.S. oil company executives. The group released a report this summer saying that while the world is not running out of oil and natural gas, there are accumulating risks to securing global supplies.

The report, entitled "Facing the Hard Truths About Energy," was a study to determine whether the world is running out of oil. But it also addressed other obstacles the energy industry is facing, including political risks, decaying infrastructure and the possible effects of policies aimed at reducing greenhouse gases.

Raymond said the infrastructure problem extends across both the oil and and power industries -- from pipelines to the electric grid. He said it is important that government understand the issue because it means any changes to the nation's energy policy will require years of effort before any benefits are felt.

"If we decide to do something, we have to stick with it for a long, long period of time," he said.

Raymond helmed Exxon Mobil for an eventful 12 years, steering the company through the consolidation of the industry and the start of the current bull market for oil.

The company's shares more than tripled while he was CEO, but Raymond was a top target of environmentalists, who felt he was overly skeptical of global warming and not supportive of renewable energy.

Raymond declined to directly discuss climate change, but did address the possibility of carbon constraints and the necessity of improved energy efficiency.

He spoke out against raising gasoline taxes to lower demand, saying they would restrict economic growth. He also said the idea was unrealistic.

"Whoever passed that tax in Washington wouldn't be there the next term," he said.