March 11, 2014
Rex Tillerson Chairman and Chief Executive Officer
North America’s Building Trades Legislative Conference Washington, D.C.
Thank you for that kind introduction, Sean [McGarvey, president of North America’s Building Trades].
It really is a pleasure to be here to address the men and women of America’s Build Trades, and I do hope what I have to say will be useful to you.
The Building Trades is an organization that not only understands the importance of America’s energy sector, but you have been pivotal in helping encourage better energy policies and greater opportunity for all.
The Building Trades is an organization that not only understands the importance of America’s energy sector, but you have been pivotal in helping encourage better energy policies and greater opportunity for all. For that, I thank you.
As many of you know, the past few years in our industry have been revolutionary. It is no exaggeration to say that American industry and American workers have launched a new Era of Energy Abundance.
New technologies, techniques, and visionary projects have made it possible to unlock vast, new supplies of American energy. These resources are supporting millions of new jobs, reviving U.S. manufacturing, and providing increased energy security for our country.
But I believe our nation can do more. And we must do more.
We live in very challenging times. Our nation’s economy continues to struggle. Millions of U.S. workers are out of work, and millions more have dropped out of the workforce out of frustration and discouragement.
But there is reason for hope. The workers and businesses that make up the U.S. energy industry are well positioned to transform America’s future for the better.
This morning, I will discuss how the men and women working in and around the U.S. energy sector can accelerate growth and fuel increased opportunity. By working together, we can establish sound energy policies and support education, job training, and career development that will help workers participate in new opportunities.
Simply put: Sound, pro-growth energy policies can spur our economy –by opening up access to America’s resources, by enabling investment and innovation, and by addressing energy and infrastructure projects that directly and indirectly employ millions of Americans.
And, together, we can lay the foundation for future innovation and opportunity by improving education and opening up new avenues for job training for the next generation of workers.
In fact, we need only look at recent history to see what American industry and American workers can do when we open channels of dialogue and cooperation and policy action.
Creating Jobs, Expanding the Economy
Over the last five to six years, the investments and projects of the U.S. energy industry have been one of the only consistent bright spots in our national economy.
Since the recession began in 2007, employment is up 40 percent in oil and gas fields. And in every one of the 10 states where hydrocarbon production is on the rise, overall employment growth has outperformed the rest of the nation.
American investment, innovation, and hard work have made this possible.
One of the most important innovations is the integration of hydraulic fracturing and horizontal drilling, which has unlocked new sources of oil and natural gas from U.S. shale and tight rock. For years, engineers and geoscientists knew about these resources, but they were not economically accessible. Today, they are. And these resources are now creating both economic and environmental benefits that are reshaping not just America, but the global energy landscape.
The benefits of domestic energy production are extraordinary. The oil and natural gas industry now supports 9.8 million U.S. jobs – with average upstream jobs paying roughly seven times the federal minimum wage. The U.S. energy sector now accounts for $1.2 trillion of the U.S. economy, which is equal to 8 percent of GDP. And thanks to technological breakthroughs and visionary projects, in 2013, our nation became the world’s leading producer of energy from oil and natural gas.
Our new supplies of natural gas are also providing environmental benefits. As natural gas supplants coal for electricity generation, we are helping to reduce pollution and greenhouse gas emissions.
The U.S. Energy Information Administration recently found that in 2012, energy-related U.S. carbon dioxide emissions had fallen to their lowest level since the 1990s.
What makes this extraordinary is that the United States has about 50 million more consumers of energy and an economy that is about 50 percent larger than in 1995. And yet our carbon dioxide emissions are close to what they were in the mid-1990s.
Unleashing the Economy
As impressive as these economic and environmental contributions are, we can do much more.
In fact, the workers and businesses of the U.S. energy industry, by working together, can encourage public policies that will energize the economy and put millions of American workers back to work.
And we are doing so. I believe we are forging a stronger relationship between workers and businesses than ever before. And we have the results to show for it.
The energy industry, working through the American Petroleum Institute, has been proud to work alongside unions such as the Building Trades to support sound, pro-growth policies.
At a time of often bitter partisanship in Washington, energy policy is an opportunity to move the nation forward in a constructive and cooperative way.
The American public overwhelmingly supports an “all of the above” national energy strategy. And we are helping reach policymakers with that message, in order to turn the will of the people into concrete, meaningful action that enables our nation to actively pursue all sources of energy.
Our partnership is communicating to our elected leaders the importance of access to energy resources. We are standing shoulder to shoulder to communicate why we need to expand energy infrastructure now.
In this effort, I want to thank you for your persuasive voices of America’s union leadership and America’s union members.
On issue after issue, our partnership can point to opportunities to harness America’s domestic energy sources to create well-paying American jobs to make the American economy more competitive and make our nation more prosperous.
On the Keystone XL pipeline, we have helped the public understand the importance of this energy infrastructure project. And together we have exposed how political gamesmanship continues to delay a pipeline that would create more than 20,000 construction jobs and more than 118,000 other new jobs for local businesses all along the route.
In the states of the Marcellus shale, API and the Building Trades have worked together to communicate the economic and job benefits of hydraulic fracturing to our fellow citizens. In Pennsylvania, for instance, our nation’s union leaders and workers provided powerful testimony to local leaders and in local forums. In Ohio, API was proud to work with the Building Trades to defeat a ballot initiative that would have put a moratorium on hydraulic fracturing.
And most recently, AFL-CIO President Richard Trumka boldly spoke out in favor of the Keystone XL pipeline and also in support of American exports of liquefied natural gas. As President Trumka noted, some 20 LNG projects await the regulatory green light. These are massive, multibillion-dollar infrastructure projects that would create tens of thousands of jobs to construct and operate.
On behalf of ExxonMobil, I am grateful for the voices and action of Building Trades membership and your brothers and sisters in other unions as we seek to expand our Baytown facility in Texas. That facility will help America harness the benefits of newfound energy abundance for petrochemical production.
Taken together these projects add up to opportunity for American workers and their families.
As one recent study found: With sound energy policies, we could see up to 452,000 new U.S. jobs from LNG exports by 2035; a half-million new U.S. jobs supported by new oil sands development within 20 years; and, in the upstream industry alone, 166,000 jobs for African American and Hispanic/Latino workers between now and the year 2020.
In short, by 2030, sound energy policies that enable increased development of our domestic energy resources could increase government revenue by $800 billion and create 1.4 million new jobs.
This is an extraordinary growth opportunity. As our elected officials continue to struggle with our nation’s debt and persistent deficits, we need to spread awareness of the vast new government revenues that could come from expanded energy development.
All we need is the green light to proceed.
As we look to the future, we see other challenges on the horizon. And as we identify and discuss those challenges, it is clear we must build on our past cooperation.
One of the most important organizations in this effort will be the Oil and Natural Gas Industry Labor Management Committee, which is made up of business and labor groups and is chaired by President McGarvey.
The Labor Management Committee is working to channel our cooperation and collaboration to unleash new opportunities for American workers. One of the areas where we have seen the most consequential dialogue and ongoing action has been on improving job-training programs.
As you know, there is a “great shift change” – not just in my industry but across America.
Our nation faces tremendous challenges as the U.S. workforce ages and Baby Boomers retire. For both the energy industry and the Building Trades, we must find a way in the years ahead to replace skilled workers – whether they be scientists and engineers or electricians, welders, and technicians.
And whether you work at ExxonMobil or for the Building Trades, we share the same desire for America’s future: We want the safest, best-trained, and best-qualified workforce in the world. Period.
This means we must think of the future – and anticipate how we equip workers to be successful.
Our growing relationship is working to achieve that. Through the American Petroleum Institute, we are working to communicate energy industry needs and our standards directly to America’s union leadership for application and certification in training centers across the United States.
As you know, the Building Trades unions jointly operate approximately 1,500 training centers. These centers and their apprenticeship programs are a national training infrastructure that can help meet short-, medium-, and long-term workforce needs.
We respect the potential reach and impact of these training centers – which, by their sheer numbers, are the equivalent of the “third largest public university system” in our nation. That’s why we are reaching out to help these training centers respond to the energy industry’s rapidly evolving technical needs.
But there is room for improvement. Today’s unions can help tomorrow’s workforce by communicating the urgency of action and the need to be fast and flexible in the modern global marketplace.
In addition to these training centers, we cannot neglect our nation’s community colleges, which can also serve as gateways to expanded opportunity U.S. workers.
The national need for well-trained workers is why ExxonMobil announced a $500,000 grant to underwrite a technology job-training program in the greater Houston area. This initiative is focused on helping community colleges develop the workers, such as process operators, to staff our nation’s rapidly expanding petrochemical industry.
Such opportunities to improve training and education are just the beginning in a new Era of Energy Abundance.
I thank the Building Trades for recognizing these opportunities for your members – present and future. And I thank you for your contributions to our nation and to the shared effort to improve America’s competitiveness through domestic energy development.
We must continue our cooperative efforts to educate our fellow citizens about the challenges of the future to ensure that America continues to be a leader in technology, innovation, and progress.
In the 21st century, there is extraordinary pressure to perform as nations advance and people around the world become better educated and better connected, creating a competitive marketplace that knows few borders and few barriers.
This will demand the best from all of us, if our nation, businesses, and workers are to keep pace.
For industry, the challenges of the 21st century mean that business leaders must make their highest priority protecting the lives of workers and surrounding communities, as they seek to relentlessly innovate and provide products that consumers want.
For America’s unions, there will be a need to recognize that businesses that fail to innovate will risk extinction. And there must also be recognition that there are skilled non-union workers, both here and abroad. This is just a fact of life. In the 21st century, this creates a pressure on higher paid union workers to provide a better value proposition to businesses – from safety to productivity to contributing to how companies can anticipate and overcome new market challenges.
Building a Bridge to a Better Future
There is one other area where we have a responsibility to work together and that is on improving educational outcomes across our nation.
We must expand opportunity for every child – long before students exit high school for college or career.
Simply put, we need greater depth of knowledge of math and science among all our citizens. As this group knows all too well, almost no job is untouched by technology – and the need for workers to understand math and science concepts.
Unfortunately, our education system is falling behind our international peers. And that endangers the future of all our children as jobs and opportunities move to more innovative, entrepreneurial, and more efficient nations.
At ExxonMobil, we look forward to partnering with the Building Trades – and other like-minded groups – to support teachers and students by promoting research-based programs that enhance science, technology, engineering, and math education.
And we are committed to supporting state-led initiatives such as the Common Core State Standards, which encourage the greater depth of knowledge and critical reasoning needed for college or any career a young person pursues.
Together, the men and women of the energy industry – union and non-union alike – are coming together to promote policies that are strengthening our nation. And we are doing so in a way and at a time when our country needs to see open, respectful dialogue, instead of bitter, paralyzing partisanship.
I am honored to have had the opportunity to take part in this dialogue with you and, to work with, and to see firsthand the leadership of President McGarvey on these issues so vital to our future.
And I am particularly honored by this opportunity to speak with you today about all that unites us as we work to prepare our nation for the future.
Together, I know we can do more. And in the years ahead, I know we will.
Together, we can put in place energy policies that will enable us to continue to meet the challenges of the future and create well-paying jobs and promising careers that our next generation deserves.
And by doing so together, we will inspire hope and opportunity for all Americans.
I thank you for your kind attention.