During his recent acceptance of the Huffington Award from the Asia Society Texas Center in Houston, ExxonMobil Corp. CEO Rex Tillerson sat down with former White House Chief of Staff Andrew Card, Jr., to discuss the role ExxonMobil and North America will have in the global energy industry during the next several decades.

Between now and 2040, ExxonMobil expects a 35% increase in energy demand worldwide, Tillerson said. Recognizing the enormity of that growth can be a challenge for the public and for policymakers, Tillerson said, which is “like adding the entire energy demand of Russia, India, Africa, Latin America and the Middle East combined.”

Meeting that demand is further complicated by the fact that providing necessary infrastructure is a long-term process that must begin before the fact.

“In our business we have to look forward multiple decades because finding, developing and delivering energy is not something you do just overnight, it’s not something you do within a year or two,” he said. “Much of the energy that we’re delivering today is the result of discoveries we made, some of them as far back as the 1970s, they’re only now finding their way to the consumer. So you have to look at very long-term time frames.”

The good news, Tillerson said, is that “we have a lot of tools we can draw on, we have a lot of human ingenuity and capacity” available to meet that demand.

“As we are now witnessing, a significant portion of the world’s energy supply is right here in North America. It’s here in the United States with the transformational impact with the development of unconventionals, whether it’s unconventional natural gas or it’s tight oil,” he said. “Technology has opened that window of supply to the world.”

Advances in E&P technology are benefitting Canada and Mexico as well as the U.S., Tillerson said, making North America an integrated system.

“Enormous oil resources in Canada that are being developed today and much more that can be developed … with newer technologies, are being developed in ways that are much more sensitive to the environmental impacts of developing those resources,” he said. “Now Mexico, through their constitutional reform, has recognized that they need to, for their own benefit, for their own people, for their own economic well-being, participate more broadly in these global markets.

“There’s a lot of brain-power, know-how, that exists right here, and a labor force that knows how to do this, so I would say North America has an enormously important role to play today and in the years to come.”

Free trade

For North America to fully live up to its potential as a global energy supplier, U.S. regulations forbidding crude oil exports must be “relegated to the dustbin,” Tillerson said. “It’s not helping us, it’s holding us back.”

“There have been numerous economic studies done by independent think tanks, academic institutions and in fact … the GAO (Government Accountability Office) also just completed its own independent assessment, and every single assessment says allowing the U.S. to export crude is beneficial to the U.S. economy and beneficial to the U.S. consumer because the projected impact is that it lowers the overall cost of crude oil for the world,” he said.

According to Tillerson, concerns that the U.S. must first stop importing any crude oil before allowing exports are unfounded. Allowing crude oil exports under current conditions would be a way to “optimize the cost of [the U.S.] energy slate to [its] economy,” by putting all crude that is produced in the U.S. on the global market and allowing refiners the selection, giving them the chance to select lower-cost oil produced in the U.S. We should continue imports, he said, because, “If we’re going to optimize we should have access to all those qualities of crude that fit the investments that have been made here.”

In addition to the economic advantages to the U.S., Tillerson stressed the importance of allowing exports in building strong relationships with foreign countries.

“I think free trade is so enormously important to lubricating the global economic machine,” he said. “It connects economies, which therefore connects countries. As we all know, the world is a much more interdependent world today from its economies. Economic [interdependence], I’ve always viewed, is enormously healthy for government relations, for people understanding each other. If you have economic and business ties between countries, a lot of problems that come up get solved more quickly, because there’s too much at stake, economically.”

If the U.S. lifts restrictions on crude exports, Tillerson said, the rest of the world would take its cue from that move. “We are the largest, most successful economy in the world, built on the principles of open and free markets, and so whenever we take a position that’s contrary to free trade, that sends a very, very chilling message to the rest of the world.”

Cultural understanding

Promoting free trade would be especially beneficial to regions trying to develop their economies like the Asia-Pacific region, Tillerson said. “The Trans-Pacific Partnership, TPP, I think would be the most visible, powerful signal the U.S. could make to the Asian-Pacific region.”

ExxonMobil expects the Asia-Pacific region will account for 60% of the expected growth in energy demand between now and 2040, so U.S. trade relations with the region are paramount.

The countries involved in the TPP, Tillerson said, “want to know they’ve got a strong partner in the United States,” which he said is not an alternative or a counter to China’s rapid growth, but a balance to China. “If lesser countries in the Asia-Pacific region are going to grow and improve their economies and improve the quality of life for their people, they have to know they have options available to pursue what’s best for them,” he said.

When approaching trade relations with other cultures, Tillerson had a clear message: “Don’t assume you know anything about [that] place.”

Rather than entering trade communications with assumptions about another culture, Tillerson said he spends a lot of time learning about the history of the people he’s working with.

“Everybody…[is] a product not of today—we are a product of what we were…once upon a time. That’s who we are today. And I think, as I have approached different cultures, I have spent time trying to understand, what is the journey this person, whether it’s an oil minister or a chairman of a national oil company, what’s the journey that he or she has been on in their country and in their culture? Because I can deal with them as they are today, but that won’t really let me understand what’s going to motivate them, what’s going to speak to them.”

Knowing how to communicate across cultures, whether in partnerships or in adversarial settings, is key, Tillerson said. “We’ve got to arrive at a point where we’re together.”