Tom Doggett, Reuters 8 Jan 09;
WASHINGTON (Reuters) - Exxon Mobil CEO Rex Tillerson said on Thursday it would be difficult to meet President-elect Barack Obama's goal to significantly boost U.S. alternative energy production.
In a speech at George Mason University in Fairfax, Virginia, Obama said he wanted the United States to double its output of alternative energy sources during the next three years as part of his plan to revive the American economy.
"I think that's going to be very challenging to do," Tillerson told reporters following a speech at the Woodrow Wilson Center in Washington.
He said the United States will not be able to double biofuels output during that period and there was not enough manufacturing capacity to build the wind turbines needed to meet Obama's goal.
"I'm not wanting to be critical of his aspirational goal. Aspirational goals are good because they challenge us all to go out and find the right answer," Tillerson said of Obama's plan.
But he added: "Let's be realistic about timeframes. Let's not fool ourselves."
Despite calls for more alternative energy use, he said, "for the foreseeable future" the world will rely on oil and natural gas for 60 percent of its energy needs.
Renewable energy sources, which include solar, wind, hydroelectric, geothermal, biofuels and other biomass, accounted for 7 percent of U.S. energy supplies in 2007, according to the Energy Department.
Tillerson said the slowdown in the global economy would be temporary and then strong energy demand from emerging nations will return.
He also said that even with the weak economy, Exxon remained committed to investing in projects to meet future energy demand.
He said the company was sticking with its $125 billion capital spending budget planned for the next five years, despite the steep drop in oil prices and the global economic slowdown. Any changes to the capital spending budget will be announced in March at a meeting with analysts, he said.
Separately, Tillerson reiterated that it would be better for Congress to pass climate change legislation that levies a carbon tax to curb greenhouse gas emissions, instead of imposing a complicated cap-and-trade system that allows businesses to buy and sell pollution permits to spew emissions.
Tackling climate change is a top priority for the incoming Obama administration and the Democratic-majority Congress.
Tillerson said a carbon tax, which could be tacked on to fuel supplies and electricity consumption, was the most efficient way to reflect the cost of carbon.
By comparison, a cap-and-trade system is difficult to verify, requires new government regulators and "a Wall Street of emissions brokers," he said.
(Reporting by Tom Doggett; Editing by Walter Bagley)
Obama's green energy plans build hopes, skepticism
Jasmin Melvin, Reuters 8 Jan 09;
WASHINGTON (Reuters) - Proponents of alternative energy and energy efficiency were elated on Thursday by President-elect Barack Obama's economic stimulus speech, but some analysts warned his energy agenda could hit turbulence in Congress or from the slow economy.
Obama asked Congress "to act without delay" to pass legislation that included doubling alternative energy production in the next three years and building a new electricity "smart grid."
He said he also planned to modernize 75 percent of federal buildings and improve energy efficiency in 2 million homes to save consumers billions of dollars on energy bills.
Billionaire oil investor T. Boone Pickens said Obama's plan would help kickstart the slow economy.
"Investing in alternative energy, focusing on conservation and rebuilding our power grid to deliver that energy to every corner of our country are critical components of this effort," Pickens said in a statement.
"President-elect Obama's prescriptions will address the twin challenges of an ailing economy and the threat of global warming," the League of Conservation Voters said.
Some analysts questioned Obama's ability to boost spending on higher-cost renewable fuels during a recession.
"It will be more difficult to meet the alternative fuel goals if oil prices keep falling and we are in a recession," said Phil Flynn, oil analyst with Alaron Trading in Chicago.
It will take political finesse to implement the plan, said Tim Evans, an energy analyst at Citigroup in New York.
"All of the details of whatever policy he wants will be heavily negotiated in the legislative arena," Evans said.
SOLAR EQUIPMENT STOCKS SOAR ON SPEECH
Solar stocks climbed after Obama said his economic recovery plan would result in more jobs building solar panels.
First Solar Inc rose 4.6 percent to $155.36, LDK Solar closed 5.2 percent higher at $14.50, and SunTech Power was up 6.3 percent at $12.75. The shares outpaced the broad S&P 500 index, which climbed only 0.3 percent.
The solar industry is ready to create jobs as soon as funding from the stimulus plan comes through -- in hard-hit manufacturing areas like Ohio and Michigan, said Rhone Resch, president of the Solar Energy Industries Association.
"The reality is what President-elect Obama is talking about are policies and incentives that will create jobs in all 50 states," Resch told Reuters.
Not everyone cheered Obama's plan. Private companies could use domestic energy resources like oil and coal to create jobs without the hefty price tag for taxpayers, said Thomas Pyle of the Institute for Energy Research, in a statement.
"The road to economic recovery will be paved with private sector investment, not government-sponsored asphalt," he said.
(Reporting by Jasmin Melvin; additional reporting by Robert Gibbons and Joshua Schneyer in New York)
