Transcript: Rex Tillerson, ExxonMobil CEO

REX TILLERSON: Well, what we can do is add new supply and to provide means for people to use the energy more efficiently, which will help reduce demand. And that's what we're spending a lot of our effort doing, is working on both sides of the demand equation and the supply equation. And it's by providing new technology, new capabilities.

On the demand side, we want to provide means for consumers to use energy more efficiently. And that's in a lot of simple things, like providing lighter-weight tires, tires that retain their pressure more efficiently, lighter-weight plastics to go into vehicles to reduce vehicle weight; and, on the supply side, finding new ways to access energy where we are allowed to go and bring the technology to bear on new sources of energy to provide increasing supplies in the future. Fundamentally, that's all that's going to affect prices over the long term are the impacts of lowering demand and increasing supply.

CHARLES GIBSON: But you mentioned a couple of times supply now. Let's talk about that a little bit. There's a growing concern among a lot of the academicians who look at your profession that the curves of demand, new demand for oil, and the curve for new supply, new oil sources coming online, that the demand curve is going up faster than the supply curve. IEA says we'll be having a shortfall by 2015. Other people say 2020. Are we in a position where we're going to have demand outstripping supply soon?

REX TILLERSON: That's not our view of the future. The global endowment of oil and natural gas resources is clearly sufficient to meet the growth and demand that almost any economic forecast would foresee. Give you an example, Charlie, of how things have changed over the years. In 1950, the U.S. Geological Survey estimated the world's endowment of conventional oil at 1 trillion barrels. Fifty years later, the U.S. Geological Survey now estimates that endowment to be 3 trillion barrels.

What changed? Well, in 1950, the people making those estimates did not foresee the impact of technology on increasing the resource base. And I would say the same is true today. In many of the forward forecasts of people who are looking at future supply, it is myopic again; and they're not properly accounting for the impact that technology will have on making new supplies available.

CHARLES GIBSON: Fifteen years ago, the numbers I've seen, we were taking 15 percent more oil out of the ground each day than we were using. You just mentioned we're pulling about 87 million barrels a day out now. We're using 85 million. That's about a 2 percent cushion there. Doesn't that make us hostage to geopolitical developments in a lot of parts of the world, particularly in Saudi Arabia?

REX TILLERSON: Well, the traditional supply surplus, if you want to call it that, over the last 15 or 20 years has been in the range of 3 million to 4 million barrels per day. Now, to develop that kind of capacity requires enormous investments. So who should we expect to invest to develop supply that sits idle? That's a very difficult question. Now certainly, in the United States, we've been unwilling to develop the resources available here. So we're not contributing to developing supply and certainly not contributing to develop a cushion, as you point out. So where do we want to look? What country do we want to hold responsible for that cushion that you just described?

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