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Exxon CEO says U.S. has too many rules

Published: March 10, 2012 | 10:05 am
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State and local regulations in shale-oil-and natural-gas-rich plays across the United States provide sufficient oversight, while adding “dysfunctional” federal layers hinders development as well as the economic recovery, ExxonMobil Corp. chief executive Rex Tillerson said on Friday.

Tillerson, addressing an audience of energy executives at the annual CERAWeek conference in Houston, said complex regulatory processes in oil and gas development have “be-come an obstacle to getting anything done.”

“This type of dysfunctional regulation is holding back the American economic recovery, growth, and global competitiveness,” he said.

Tillerson said state and local governments with a close-up view of needed protections sufficiently oversee oil-and-gas activity while collaborating with producers.

“They provide us the roadmap with how to get something done,” Tillerson said. “Today, the regulatory process is now so complicated and so involved with so many different agencies, it’s a road map of how to not get anything done.”

CEOs of other two European oil-and-gas producers appeared more conciliatory about regulations when they addressed executives at the conference this week, but they didn’t differentiate state and local regulations from federal oversight.

Peter Voser, CEO of Royal Dutch Shell said the industry can handle environmental and operational challenges, particularly when governed by “well-targeted and robustly en-forced regulations.”

And Helge Lund, CEO of Norway’s Statoil, said public trust and confidence in the industry’s ability to maintain safe operations is crucial.

“There is a huge upside for working to ensure we have the right regulations, rather than being perceived as the industry that fights regulations,” Lund said.

Tillerson cited as an “unfortunate decision” President Barack Obama’s rejection of a federal permit to allow TransCanada to build its proposed Keystone XL pipeline from Alberta to Texas to transport Canadian oil to U.S. Gulf Coast refineries.

He also said the industry learns from mistakes, such as the 2010 blow-out of a BP PLC. deepwater well in the Gulf of Mexico that spewed more than 4 million barrels of crude into the basin.

“It reminded all of us that the failure to manage risk effectively carries enormous consequences, in terms of loss of life, significant financial impact, and environmental harm,” Tillerson said.

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