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This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could.

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Presentation on theme: "This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could."— Presentation transcript:

1 This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could differ materially due to changes in technology, the development of new supply sources, political events, demographic changes, and other factors discussed herein (and in Item 1 of ExxonMobil’s latest report on Form 10-K). This material is not to be reproduced without the permission of Exxon Mobil Corporation. Energy in the 21 st Century Texas A&M January 25, 2008 Clay Vaughn Construction Vice President ExxonMobil Development Company

2 2 The Global Energy Challenge The pursuit of economic growth and a better quality of life in the developing world is driving global energy demand. New supplies of reliable, affordable energy are needed. Meeting this demand while managing emissions is an enormous challenge…

3 The Outlook for Energy

4 4 A Global View

5 5 Global Economics and Energy 3.0% Average Growth / Yr – – % GDP $Trillion MBDOE 1.3%1.8% Energy Demand BOE/2005$K GDP -1.6%-1.0% Energy Intensity

6 6 Global Energy Demand 1.5% 2.0% Hydro/Geo MBDOE Wind, Solar & Biofuels 8.7% 0.7% Biomass/Other Renewables 8.7% 10.5% 7.6% Wind Biofuels MBDOE 9.9% Solar Wind, Solar, Biofuels 1.3% 0.9% 1.2% 1.7% 1.5% Oil Gas Coal Nuclear MBDOE Average Growth / Yr Renewables 2.0% Primary Energy

7 7 Global Oil Resource Base USGS 1984 USGS 1987 USGS 1991 USGS 1994 ExxonMobil 2007 USGS Trillion Barrels Frontier Conventional Produced YE 2006

8 8 Energy Security

9 9 Largest Economies & Oil Importers in 2006 Imported OilDomestic Production Oil Demand Source: EIA, IEA

10 10 U.S. Imports of Crude and Products EIA, Petroleum Supply Monthly, May 2007

11 11 What Should Be Done? Seek solutions that moderate demand, increase supply Focus demand reduction efforts on transportation sector Enhance supply both domestically and internationally Provide access to prospective areas within U.S. Maintain diverse portfolio of suppliers Promote interdependence

12 12 Factors behind Gas Prices

13 13 What consumers are paying for at the gasoline pump TAXES 31%16%53% Source: Average of gasoline components from January through September 2007 as reported by EIA Profits from Oil Daily. Profits 8.7% CRUDE OIL RE- TAIL- ING REFINING TAXES 54%20%11%15%

14 14 Crude Oil and Gasoline Prices Source: EIA, WSJ Gasoline WTI Gasoline $ per gallon (2007$) Crude $ per barrel (2007$)

15 15 Global Liquids Supply and Demand $ per barrel (2007$) Iraq invades Iran 1980 Strong global demand Tight spare capacity Iraq conflict Venezuela / Nigeria unrest Yukos collapse US hurricanes 2003-Today Reagan removes remaining price controls 1981 Oil Embargo Iranian Revolution 1979 Iraq invades Kuwait 1990 Source: WSJ

16 16 Retail Gasoline Prices & Taxes (2006) Source: IEA Tax Price (ex tax) $/gal $6.37 $6.11 $6.03 $5.88 $4.85 $4.47 $3.26 $2.57

17 17 Energy and the Environment

18 18 Addressing the Risks of Climate Change ExxonMobil takes the issue of climate change seriously, and the risks warrant action. Climate remains today an extraordinarily complex area of scientific study, but the risks to society and ecosystems from increases in CO 2 emissions could prove to be significant. Despite areas of uncertainty, it is prudent to develop and implement strategies that address the risks, keeping in mind the central importance of energy to the economies of the world The challenge going forward is to provide the energy the world demands while reducing greenhouse gas emissions.

19 19 Global Energy and CO 2 Emissions MBDOE Oil Gas Coal Other Demand 0.5% 2.0% Average Growth / Yr – 2030 OECD Non-OECD Oil Gas Coal Other Billion Tonnes CO 2 Energy Related CO 2 Emissions 1.9%0.1% Billion Tonnes CO 2 Oil Gas Coal Oil Gas Coal

20 20 The Need for Innovative Technology Source: J. Edmonds, PNNL

21 21 Reducing Emissions: What We’re Doing Cogeneration Plant, Beaumont Refinery Breakthrough ResearchCarbon Capture & Storage

22 22 Our People

23 23 Our Business, Your Opportunity Growing Business –World oil and gas demand growing Dynamic Landscape –Dramatic advances in technology –Competitive environment changing rapidly Full of Opportunity –New areas opening for development –Emerging markets hold enormous customer base –Unprecedented time to apply your skills to energy challenges

24 24 Engineering Opportunities Opportunities to contribute to global operations from day one Chemical – Upstream: Development, Production, Research; – Downstream: Refining & Supply, Research & Engineering, Chemicals, Global Services Civil – Upstream: Exploration, Development, Production – Downstream: Fuels Marketing, Lubricants & Petroleum Specialties, Pipeline, Research & Engineering, Chemicals, Global Services Electrical – Upstream: Exploration, Development, Production, Research; – Downstream: Refining & Supply, Research & Engineering, Pipeline, Chemicals, Procurement, Chemicals, Global Services Mechanical – Upstream: Production – Downstream: Refining & Supply, Pipeline, Chemicals, Global Services Petroleum – Reservoir, Drilling, Subsurface production, Surface facilities

25 25 In Summary… Global energy demand increases 40% versus 2005 – with the majority of this growth coming from the developing world Oil, gas and coal will continue to provide majority of world’s energy needs Energy security is best achieved through energy independence and diversity of supply Technology critical to managing emissions and meeting growing energy needs

26 This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could differ materially due to changes in technology, the development of new supply sources, political events, demographic changes, and other factors discussed herein (and in Item 1 of ExxonMobil’s latest report on Form 10-K). This material is not to be reproduced without the permission of Exxon Mobil Corporation. Backup

27 27 U.S. Refining Capacity Growth U.S. Gasoline Demand Gasoline Production Number of U.S. Refineries

28 28 Renewables: Wind, Solar and Biofuels Wind & Solar Fastest growing non-fossil fuel sources Wind more competitive than solar Major technology advances needed Biofuels Scale and cost issues Improvements possible Land and water impacts

29 29 Other Technology Options Gasification Converts carbon energy to synthetic gas Suited for use with Carbon Capture Research continuing Hydrogen Must be produced from another source Cost and safety are key issues May be suited to power generation Nuclear Strong potential Cost, safety perceptions and waste are key issues Research into advanced systems underway H

30 30 Light Duty Transport Ethanol (Cellulose) Hybrids Ethanol (Conventional) $ per Tonne CO 2 Avoided Power Generation Gas IGCC- CCS Wind Nuclear Cost Power Generation Source: SFA Pacific, JEC WTW Study Annual CO 2 (Billion Tonnes) CO 2 Mitigation Options Scale Light Duty Transport

31 31 Source: International Energy Agency The Global Energy Investment Challenge Oil & Gas Industry Investment Requirement: $300 billion per year between 2004 – 2030 Gas 18% Electricity 62% Oil 18% Coal 2%

32 32 Africa $15 billion Europe $14 billion Energy Investments for Today … and Tomorrow ExxonMobil Investments 2002 – 2006 (US$ billion) North America $25 billion Asia Pacific/ Middle East $11 billion $7 billion Africa $17 Latin America $3 Europe $15 North America $25 Asia Pacific/ Middle East $14 $8 Russia/Caspian

33 33 Scale and Cost of Fuel Ethanol in U.S. Source: NCGA, EIA, DOE * adjusted for energy content $ per gallon $2.30 Cost % of Corn Harvest Dedicated to Ethanol % of Ethanol in Total Gasoline Demand 2005 (4 billion gallons of ethanol) 2% Scale 13% $2.53 $2.96 Subsidy

34 34 U.S. Gasoline & E85 Prices Source: DOE Alternative Fuel Price Report $ per gallon Gasoline E85 (Energy Adjusted)

35 35 Source: EIA Other Americas Domestic Production ~ 8 MBD Middle East Europe, Africa, Russia/Caspian, Asia U.S. Oil Supply by Region of Origin

36 36 Teaching Tomorrow’s Leaders Supporting and providing for teachers Committed to developing next generation of scientists and engineers High school level: Founding sponsor of National Math & Science Institute Elementary school level: Mickelson Teachers Academy


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