Black-Gold Booster

Lee Raymond succeeded as an oilman by staying focused on oil. (In the mid-1980s, he was responsible for unwinding the alternative-energy program at his former company, Exxon.) Now chairman of the National Petroleum Council, Raymond says that petroleum remains plentiful, and a new report he's prepared for the Bush administration argues for developing new sources of oil and gas. But the report also advocates moderating demand, especially by raising fuel efficiency in cars. As for global warming? Raymond, who is also chair of President Bush's alternative-energy committee, says, "No comment." He spoke to NEWSWEEK's Fareed Zakaria. Excerpts:

ZAKARIA: You ' ve given the impression that you ' re somewhat skeptical about global warming. In the last year or two, have you changed your views?

RAYMOND: Frankly, if the conversation is going to be largely focused on global warming, that's not really where I'm going to go. The National Petroleum Council's study says, on the question of global warming, if policymakers conclude that actions should be taken, that would force, likely, a change in the energy mix and would force higher costs of energy.

How should we think about petroleum, in light of the two most common arguments — first, that it makes us dependent on politically unstable Middle Eastern countries, and, second, that it contributes to global warming?

The notion of energy independence in this country may sound attractive to Americans, because Americans tend to think they can divorce themselves from the rest of the world, but the United States can't be [truly] independent. We are part of the worldwide system. This notion that people have that "we're going to stop importing crude oil from Saudi Arabia"—facts are, [wherever you buy from] in effect you're still importing Saudi crude oil, because the Saudi crude oil is in the world pool.

But should the United States be trying to develop alternate technologies to reduce the overall global dependence on this one fuel and one region of the world?

Well, I don't have any problem with that, and in fact the study recommends that this country doesn't have any choice but to pursue all economically driven, market-driven sources of energy. That's what it says: do it all! So when someone says, "We shouldn't have coal; we should have nuclear," well, my answer to that is you need coal and you need nuclear.

Do you think the world is running out of oil?

As the study says, the world is not running out of the resource. The problem we're getting into is the question, can we develop it in a timely way, given the constraints we have on the political front, the economic front, and just the time it takes to get things done?

As for the future of oil, what are the most promising geographic areas?

Early in my career there was a fellow who was president of Exxon, and his comment used to be: "The best place to look for oil is next to where you've already found it." It was called "closeology." We're finding out that as we go back and we get a lot better tools, technically speaking, and the ability to drill a lot deeper and more cleverly than we did in the early years, we're finding that there's a lot of oil in places we've already been, but we didn't go deep enough, we didn't go far enough, because we didn't have the capability. Places that have been attractive [and] are going to continue to be attractive will be the Gulf of Mexico, offshore Africa, probably some areas of the North Sea. We might even find some in the Mediterranean or Egypt.

Iraq hasn ' t had serious exploration in 40 years.

That is true. There is an enormous amount of oil in Iraq. We [ExxonMobil] were part of the consortium, the four companies that were there when Saddam Hussein threw us out, and we basically had the whole country. Really, to my knowledge, and I think it's pretty accurate, there has been no real exploration done since 1971.

Will there be as much as Saudi Arabia?

That's unlikely. But easily as much as Iran [the world's second largest producer].

Critics say the oil majors don ' t want to encourage the United States to seek out alternative energy or use gas more efficiently. We still have the cheapest gas in the industrialized world.

That's a canard that's been around for a long time. People say the energy companies don't want to raise the gasoline tax. I don't think the energy companies take a position on the gasoline tax. That's a political issue. The facts are, we don't have to oppose it; the American people oppose it.

How serious a threat do you think global warming is?

That's where we started this … I'm not going to comment on that.

Your view on global warming as a citizen is " no comment " ?

My view on global warming is the purpose of this interview is not to talk about that.

© 2007