Exxon chief calls for Kyoto reality check

The head of ExxonMobil, the world's biggest oil company, has warned Europe that "a reality check" is needed over its commitment to the Kyoto treaty on climate change.

Lee R Raymond, the chairman and chief executive, caused outrage among environmentalists with his comments, given in a speech in London to an oil industry gathering. He declared that the targets to reduce greenhouse gas emissions set by Europe, which is leading the world in the implementation of Kyoto, would prove very difficult to achieve.

Mr Raymond also took a swipe at the British Government's tax policy for North Sea operators. Exxon extracts 15 per cent of the oil and gas supplied from the UK continental shelf in the North Sea. Speaking at a dinner on Wednesday night at the Grosvenor House Hotel in London, to mark the International Petroleum Week conference organised by the Energy Institute, a trade body, Mr Raymond said the UK's tax and regulatory regimes needed to be more competitive. He said the costs of operating in the UK continental shelf were among the highest in the world.

"We have only to look back to the tax changes made in the UK North Sea in 2002 to see the interruption that subsequently took place in exploration."

In the 2002 Budget, an extra 10 per cent tax was applied to oil companies operating in the UK part of the North Sea. Mr Raymond said that, to those calling for windfall taxes to be applied to the multi-billion pound profits now being made by oil majors, "I would remind them that ours is a long-term business and that project lives often exceed 20 years".

Exxon, which also trades as Esso in this country, has never accepted the mainstream science on global warming that led to the signing of the Kyoto treaty in 1997. The company points to "uncertainties" in the science and funds a number of think tanks and academics that have questioned the research. The EU has committed itself to reducing greenhouse gas emissions, which are blamed for global warming, to 8 per cent below 1990 levels by 2012.

Mr Raymond said: "I also think there will be a need to be realistic about environmental targets. While the political commitment to the Kyoto process and targets is quite strong in Europe, attaining those targets is going to be very challenging, given the energy supply and demand realities. That is why a reality check may be needed regarding the attainment of those targets."

He said the world will experience a dramatic rise in energy demand - equal to an extra 100 million barrels per day of oil by 2030 - more than 10 times the current output of Saudi Arabia, the world's leading producer. He said fossils fuels remained the only way of meeting those needs, in particular from new sources of gas. Mr Raymond predicted wind and solar energy would provide just 1 per cent of global requirements in 2030.

Unlike Shell and BP, Exxon opposes the Kyoto treaty - many saw its hand behind the decision taken by the Bush administration in 2001 to pull out of Kyoto. But Exxon insists it is taking practical actions to reduce emissions. A spokesman said that Kyoto would "impose dramatic economic costs in the developed world" while failing to tackle the emissions from the developing world. He said the company believed that "it is time to move beyond Kyoto" and focus on developing technologies to reduce emissions.

The dinner Mr Raymond addressed was disrupted by protesters, who labelled him "the number one climate criminal".

Even in Mr Bush's Republican Party and in the US oil industry, some leading voices have called for America to adopt a Kyoto-style system for reducing greenhouse gas emissions. US Senators John McCain and Joseph Lieberman introduced the Climate Stewardship Act 2005 earlier this month, but Exxon said that it opposes the move.

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