ExxonMobil CEO Defends High Profits

ExxonMobil CEO tells Charles Gibson, "there is no one solution" to oil crisis.

ByABC News
August 13, 2008, 4:29 PM

Aug. 13, 2008— -- ExxonMobil CEO and chairman Rex Tillerson defended his company's staggering $11.7 billion in profits for the second quarter, saying that the company's earnings reflected the magnitude of its business operation.

"I saw someone characterize our profits the other day in terms of $1,400 in profit per second. Well, they also need to understand we paid $4,000 a second in taxes, and we spent $15,000 a second in cost," Tillerson told ABC News' Charles Gibson. "We spend $1 billion a day just running our business. So this is a business where large numbers are just characteristic of it."

ExxonMobil earned the best quarterly profit ever for a corporation, up 14 percent from last year but still below investors' expectations. While Wall Street was slightly disappointed by Exxon's earnings, some Americans were outraged by what they saw as big oil profiting at their expense. Tillerson recognized that consumers are angry about the escalating price of gas.

"I can understand why people are very upset and why they're very worried and concerned about their ability to deal with these high prices," Tillerson said. "It does bother me that much of that is directed at us. Our job is to provide energy, to provide it in a means that is reliable. And we hope we can provide it in a means that's convenient as well to the consumer."

When asked whether he agreed with Phil Gramm, Sen. John McCain's former economic adviser, who labeled America as a "nation of whiners," Tillerson said he empathizes with American consumers.

"I don't think there's any question that if these prices -- $3.50, $4 a gallon for gasoline -- and the follow-through effects on the cost of electricity [are] causing a lot of problems for a lot of Americans. ... Their budgets just are very difficult for them to accommodate this."

But Tillerson also said that the combination of new technology on the supply side and energy efficiency on the demand side will make gas more affordable for the average American.

"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," Tillerson said. "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."

Tillerson's suggestions for energy efficiency echoed recommendations by presumptive Democratic nominee Sen. Barack Obama, who called for tire-inflation and proper car tuneups to provide relief to distressed voters.

"Things like providing lighter weight tires, tires that retain their pressure more efficiently, lighter weight plastics to go into vehicles to reduce vehicle weight" will help consumers use gas more efficiently, according to Tillerson.

Energy has been center stage on the campaign trail, with both Democrat and Republican sides attacking one another's proposals and calling for energy independence.

But Tillerson added that energy independence is "not realistic for the United States or almost any other country."

"I'm not sure that it's even desirable for the United States to pursue that as a goal," he said. "Our country's economy is so interdependent with the rest of the world in so many areas of, not just commodities, but capital markets. ... So I'm not sure why we would view energy any differently than the way we view the rest of our economy."

When asked about the fragility of the global market to geopolitical developments across the world, especially in oil-rich nations such as Saudi Arabia, Tillerson suggested that energy diversity provides security.

"I think the response to that is to have as many diverse supplies of energy as possible. And that means both in terms of geographic diversity. You want to expose yourself or certainly have access for the American people to as many different geographic sources of supply as possible. So the disruption in one area does not leave you ... hostage to any one area."

Last week, Obama called to "end the age of oil in our time," claiming that the United States could produce enough renewable energy to replace all U.S. imports of oil within 10 years.

But Tillerson said that "it's going to be very challenging to achieve that goal, in that period of time. And again, so much of the energy issue that the United States deals with and the world deals with, people I think do not have an appreciation for the lead times that are required."