Last night, the Executive Leadership Council awarded ExxonMobil with the corporate award in recognition for the company’s activities promoting and pursuing diversity leadership pipeline goals and objectives on behalf of African Americans. Before accepting his award, Rex Tillerson, chairman and CEO at ExxonMobil, sat down with BlackEnterprise.com to talk about diversity, oil prices, and taxes.
BlackEnterprise.com: With the technology advances what does the pipeline look like for African Americans? What has ExxonMobil invested to make sure that the pipeline is diverse?
Rex Tillerson: We’ve never been very successful at tapping into the African American community for scientists and engineers. We see it as very fertile ground. We continue to develop programs and try to innovate new ways to attract more young African Americans and in particular, women to science and engineering.
Through our women in science and engineering program, we provided $1 million to a joint venture project put in place in 2006 with Spelman College and Georgia Tech. Women in Science and Engineering (WISE) provides scholarships directed at African American women to attract them into science. Another significant effort is the creation of the National Math and Science Initiative, a $125 million program that takes prudent programs and puts them into school districts that will attract more competent science and math teachers.
What programs has the company initiated to develop ExxonMobil franchisees and suppliers?
Through our global procurement organization, we have a number of programs directed at minority venders and contractors, first, to ensure that they understand how to become qualified for our business. Special efforts are made to evaluate their business and their competencies, what we can do, and what can they do to become qualified to compete.
ExxonMobil funds scholarships for minority and women suppliers to attend the University of Virginia’s Darden Graduate School of Business Administration, Northwestern University’s Kellogg Graduate School of Management Executive Program and the University of Texas’ Executive Education Seminar. Our Fuels Marketing Co. has developed a minority economic development to help create awareness and interest in retailing opportunities at ExxonMobil among minority candidates.
What type of commitment has ExxonMobil demonstrated toward helping African Americans and women infiltrate the executive level in house?
ExxonMobil supports diverse employee networks including BESTÂ — Black Employee Success Team– which provides mentoring, coaching, and strategies to enhance professional growth and development.
The importance of this group is the mentoring that goes on. Our senior executives are able to share with younger, newer employees their experiences and how they dealt with it. It helps everyone assimilate into the workforce more easily, but it also helps with the discouragement. It is daunting for everyone, but for a young African American working at a company that has 81,000 employees, it can be particularly daunting.
What types of information about energy systems are you putting forth, and how are you reassuring consumers and environmentalists?
We want to teach people about the power of technology and what technology has done to transform our industry over the last 30-40 years. Just like your telephone doesn’t look anything like the one you used when you were a child. The way we drill oil, produce and transport it is more efficient and effective to protect the environment in much better ways than we ever could before. We really can develop this resource and deliver it in a safe, reliable and responsible way. A lot of the old fears that people carry around with them really are outdated and we try to get people to reexamine those, and look at them in the context of the high tech world we live in today.
ExxonMobil has been criticized about the revenue they’ve enjoyed while consumers are scraping by. Do you feel that corporations have a responsibility in terms of alleviating the pressures that consumers might feel from high gas prices?
The price itself is very difficult for a lot of families, and we do know that, but even more painful then the price itself is the real risk that comes from policies that might interrupt that supply. Not having the supply would be devastating to people’s livelihoods. What we can do about that is get more supply; both in terms of crude oil but also natural gas and manufacture more gasoline.
We’ve seen vivid examples of how painful it is when you can’t get the product at all, like when the recent hurricanes caused shortages in the supply chain. And we all saw pictures on the news of long lines at gas stations in mid-Atlantic states where people couldn’t get fuel.
What policy steps might interrupt the supply?
We’re already the most heavily taxed industry in the country. In our case, for every dollar of profit, we pay about $2.50 in taxes.
Yes, when prices are high like we’ve had, we’re doing pretty well. But the investments we have to make are these long lead times that are enormous. A single project can cost us $15 billion and take us six to eight years to implement. We’re investing huge amounts of money where there is no income coming in from that investment and we have no idea what the price is going to be 10 years from now. So the risks in this business are still enormous. If you take too much of our revenue stream away from us by increasing the tax burden, then you lower our ability to take that risk. Our level of profitability goes directly to our ability to provide the supply in the years ahead.
Everyone is looking to reduce carbon emissions and use alternative energy sources such as solar, wind, and biofuels. How do you see ExxonMobil transforming and evolving to meet the desire for a greener world and economy?
That defines the biggest issue we are facing today. Almost any forecast you want to look at will show that 25 years from now energy demand is going to grow because populations grow and economic activity grows.
Today, oil and gas account for 60% of our energy. Twenty-five years from now, they are still going to account for 60% of our energy. It’s not because there’s not going to be enormous growth in alternatives: bio-fuels, solar, wind, and some growth in nuclear over this time period. All of these alternatives start at a very small base. It’s because the energy consumption in this country and in the world is so enormous.
We can send 44,000 gallons of oil per second. Alternative fuels such as ethanol can produce 50 million gallons of ethanol a year at a world-scale ethanol plant. That is about eight hours of supply. They will grow, and they will grow rapidly, but they are starting at essentially zero. Even when you grow something at a double digit rate, 25 years from now alternative fuels will comprise about 3-4% of the supply and that’s all. It doesn’t mean we shouldn’t do it. Particularly in the U.S. we’ve got to develop all of the options because we are going to need them all.