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an interview with Rich Pisarczyk, president of ExxonMobil Research and Engineering
This article originally appeared in the Lamp, 2008 — Number 2
Research commitment provides competitive cornerstone.
Consumers are increasingly concerned about greenhouse-gas emissions, energy conservation and, above all, today’s rising oil prices and fuel costs. More than ever, people wonder what the world’s major energy companies are doing to mitigate the impacts on their finances, their lifestyles and their world. ExxonMobil Research and Engineering Company (EMRE) President Rich Pisarczyk describes how research and development at ExxonMobil, and at EMRE in particular, are addressing these issues.
Broadly, how would you characterize ExxonMobil’s key research and development strengths and challenges?
There are many activities we do exceptionally well at ExxonMobil — things that are difficult for our competitors to match. Our commitment to R&D is a disciplined and sustained commitment. It’s steady and continuous, and that’s very important. Research isn’t something you can turn off today and then suddenly turn back on tomorrow. Another one of our strengths is the integration and close collaboration between our R&D organizations and their ExxonMobil business partners. Each R&D unit is located in close proximity to its business partners — the upstream R&D people are close to the upstream businesses, and so on. That collaboration goes a long way in helping researchers understand and meet their clients’ needs.
Our challenges include the speed at which today’s world changes and the need to implement new technologies as close to real time as possible. We have to develop as well as monitor and understand game-changing technologies being developed by others; ExxonMobil recognizes that “not invented here” is no basis for ignoring good ideas. Thus we must effectively manage our collaborations. These aspects are key as we further the development of both high-potential alternate energy sources and frontier, or nontraditional, hydrocarbon resources such as tar sands and shale gas.
Finally, we have to continue to find and attract skilled people, even though fewer U.S. students are pursuing math and science degrees today. We need to excel in knowledge management so that we can effectively hand over our knowledge base to those who replace us.
With such a focus on energy prices today, are any of ExxonMobil’s R&D activities helping conserve energy at your facilities or helping consumers control fuel costs?
We’ve improved the energy efficiencies at our company’s manufacturing operations, and that’s a big focus for us. These initiatives have lowered our carbon dioxide emissions and overall carbon footprint as well, which reduces the impact of our operations on the environment.
They’re also lowering manufacturing costs, and that ultimately cuts the price of our products in the marketplace.
ExxonMobil has been a recognized leader in lubricant technologies for decades, and we continue to develop lubes that are more effective, more environmentally friendly and better at boosting fuel efficiency. Our latest synthetic lube formulation — Mobil 1 Advanced Fuel Economy engine oil — can improve fuel efficiency for motorists by up to two percent.
We also have several substantial, ongoing research collaborations with engine builders and other third parties such as Toyota and Caterpillar. These collaborations have steadily improved the fuel efficiency and emissions of the current generation of passenger and commercial vehicles.
What about building new refineries – wouldn’t that help lower fuel costs?
It’s a very expensive proposition to build new grassroots refineries, especially in mature markets such as the United States and Europe. However, since 1995 we’ve added the equivalent of one new refinery into the system every three years by improving catalysts and process technologies that boost refining capacities. In this manner, we are doing our part to provide incremental fuel supplies to meet the growing demand that contributes to rising costs at the gas pump.
What other R&D contributions can consumers look forward to in the foreseeable future?
There continues to be tremendous opportunity for us to improve the fuel economy and efficiency of conventional gasoline and diesel engines through our third-party collaborations. We’ve developed an extremely robust synthetic lubricant for other alternative energy sources such as wind turbines. Since these turbines operate high in the air and, in some instances, offshore, they require lubes that can withstand extended service intervals. We also are doing an extensive amount of work to develop new, more efficient energy formulations for a variety of industrial applications.
Hydrogen fuel cells may become a viable energy source for vehicles, and we’re working on a technology that will take conventional fuels and convert them to hydrogen on board the vehicle. This technology would considerably reduce the infrastructure costs of introducing hydrogen fuel cells in the marketplace on a widespread basis.
What about ahead-of-the-curve research?
Within EMRE, we have a sustained breakthrough research program that’s dedicated to the development of ahead-of-the-curve initiatives. There might not be a high probability of success in any one initiative, but if we do succeed, it would result in a major step change and competitive advantage for ExxonMobil.
We’re looking at opportunities in the area of renewables and biofuels. In coal and heavy-oil conversion, we’re working on gasification technologies that improve conversion at significantly lower capital cost. Improved gasification, coupled with carbon capture and storage technologies that have the potential to reduce carbon emissions as much as 90 percent, would make coal a more viable alternative if carbon restrictions are implemented. We’re also looking at the potential for gasification and other conversion options for biomass fuels such as wood and charcoal. Gasoline and diesel will continue to be the automotive fuels of choice for an extended period of time, but novel fuels may become significant alternatives in the next 10 to 20 years, and that means the time to look at them is now.
Overall, how has the development of new technologies contributed to the profitability of ExxonMobil’s downstream businesses?
New and improved technologies have contributed a substantial amount to the more than $1.3 billion after tax of annual savings the downstream has averaged over the last five years. This has widened our competitive lead. Our molecule management program, for example, is a suite of technologies that helps us optimize the use of cheaper advantaged crudes, maximizes the value of every hydrocarbon molecule and contributes to our continued increase in refining capacity. It’s just one of the ways EMRE plays a tremendous role in partnership with the various ExxonMobil businesses.
What would you say to those who contend that energy companies should invest even more money back into R&D initiatives in areas like energy conservation and environmental protection?
Again, we have a sustained commitment to pursue R&D opportunities within ExxonMobil. If we see a good opportunity for additional research and development that is aligned with our business and corporate goals, we will pursue it.
