Obama Team, Exxon Mobil Chief Trade Jabs on Energy

By STEPHEN POWER and IAN TALLEY

WASHINGTON -- President-elect Barack Obama's pledge to double alternative-energy production over the next three years drew a skeptical response Thursday from the chief executive of Exxon Mobil Corp., Rex Tillerson, who told reporters during an appearance in Washington that rapid increases in alternative energy would be "very challenging."
"Let's be realistic about time frames, let's don't fool ourselves," Mr. Tillerson said. "If you include biofuels, which are already at [federal] mandate levels … doubling that would require you to have available cellulosic conversion technology, which does not exist today. In terms of wind, there simply is not the manufacturing capacity today to build wind turbines…they're already backordered."
Despite billions of dollars in federal spending on various clean-energy technologies in recent decades, the U.S. energy portfolio has not dramatically changed since the administration of Richard Nixon. In 2006, fossil fuels accounted for 85% of the nation's energy supply compared with 93% in 1973, according to a report last year by the Government Accountability Office.
In his speech on economic recovery at George Mason University Thursday, Mr. Obama didn't spell out how he would go about doubling alternative-energy production, but described his goal as part of a broader strategy to "put Americans to work in new jobs that pay well and can't be outsourced -- jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain."
In response to written questions from The Wall Street Journal, an Obama transition aide said the president-elect would seek to double the amount of wind, solar, and geothermal generating capacity in the U.S. through a combination of mandates and subsidies.
"The United States currently produces roughly 24,000 MW [megawatts] of wind, solar, and geothermal power. Before the financial crisis brought the renewable industry to a halt, the wind industry publicly announced the expectation to install at least 7500 MW in 2008," the Obama transition aide said in an email. "By providing significant loan guarantees and ultimately later down the road a national [renewable portfolio standard], we are confident we will get the wind industry back on track. In addition to the 20,000+ MW of wind, we are confident that with the same combination of support and renewable standards, the geothermal and solar industries can install 4,000 MW of new power."
Mr. Obama has called for legislation that would cap and gradually reduce U.S. greenhouse gas emissions, and for a federal mandate that would require that the U.S. by 2025 get at least 25% of its electricity from renewable sources like the wind, the sun and geothermal energy (which together currently account for around 1% of U.S. electricity supply).
Turning that vision into a reality, many energy industry officials say, will require building more transmission lines, to convey wind power from remote areas in the central U.S. where it is prevalent to more densely-populated areas where the electricity is most needed. The construction and siting of such lines are often opposed at the local level. More recently, the global economic downturn has depressed investment in many forms of renewable energy.
Mr. Tillerson, whose company once funded a think tank that argued carbon-dioxide emissions were helpful to human life, has drawn criticism at times from environmentalists and activist shareholders who say Exxon Mobil is not adequately investing in alternatives to fossil fuel. While the company today acknowledges that burning fossil fuels is a significant source of greenhouse-gas emissions and increases the risks of climate change, Mr. Tillerson has also said the company expects oil and natural gas to remain the dominant fuels for decades, and that it must continue to generate needed energy while taking steps to reduce the company's "environmental footprint."
In response to Mr. Tillerson's comments, the Obama transition aide noted that the global wind turbine manufacturing industry has been growing, and said the new administration would take steps to bring a greater fraction of wind technology development and manufacturing to the United States.
"In order to achieve meaningful energy security and confront climate change we must begin to trade aspiration for achievement," the aide said. "This will require an ambitious partnership between government, industry and the American public. We invite Mr. Tillerson to join this effort."
Write to Stephen Power at stephen.power@wsj.com and Ian Talley at ian.talley@dowjones.com