ExxonMobil is famously tight-lipped and conservative, and its quarterly earnings calls rarely produce much in the way of stunning news or salacious gossip. But the company’s discussions of ongoing operations at important projects – such as massive oil sands investments, Russian gas export facilities and Alaskan infrastructure targets – touch on some of the trickiest and longest-running conflicts in energy and politics today, offering insight into how these situations are developing.

Keystone XL

During the call, vice-president of investor relations David Rosenthal echoed recent statements by TransCanada’s chief executive that if the Keystone XL pipeline is not available to oil sands producers, rather than stunting oil sands development, it will just prompt companies to find other means to get those resources to market.

ExxonMobil and its Canadian subsidiary Imperial operate the 110,000 barrel per day Kearl Oil Sands project, which came online in April, with a 110,000 bbl/d expansion planned for first production in late 2015. The company also has a stake in the 160,000 bbl/d Cold Lake project, and recently bought ConocoPhillips’ 100%-owned Clyden oil sands leasehold in Alberta for $720 million.

All of these projects would benefit from having access to Gulf Coast refineries via Keystone XL, but the threat that it may not be approved is pushing ExxonMobil and its oil sands peers to consider all options for moving crude south, including rail, which tends to be riskier and more costly.

“We are looking at a number of logistical opportunities that we have, including pipeline routes, and certainly Keystone XL will be there for the industry in general,” said Rosenthal. “But as would be prudent, we are looking at other options, including evaluating a project to build a rail terminal in Edmonton and then move some of that crude out of there into the lower 48 by rail.”

The company has a “lot of volumes to find disposition for”, Rosnethal said. “We are actively working on all of the alternatives that are available to us to move that crude into market and get the maximum value for those molecules.”

Alaska’s Fiscal Regime

Rosenthal took the opportunity of an analyst question about developments in Alaska to drive the point home that the state must have a fiscal regime that attracts investment if it wants to get major oil and gas projects off the ground.

ExxonMobil is one of the largest stakeholders in Alaska’s massive Point Thomson gas field, which was stuck in a several-year legal battle that hindered its development until the dispute was resolved in early 2012. That resolution came with the condition that ExxonMobil, BP and ConocoPhillips cooperate on developing a project proposal for a pipeline from Point Thomson to Tidewater, Alaska, and an LNG export plant to deliver North Slope gas to global customers.

Alaska has long been the object of oil company criticism over a fiscal system that offered too little in the way or returns to attract investment. Alaska has since made some changes to its oil tax regime, and ExxonMobil has met Governor Parnell’s pipeline and LNG project targets, but Rosenthal pointed out implementation of the Alaska LNG project would be a huge undertaking, requiring that that fiscal system be appropriately structured to make the state more attractive for big oil and gas projects.

“That would be a very, very large project of literally unprecedented scale and complexity,” Rosenthal said. Initial project plans put estimated costs at $45-$65+ billion. “It’s going to be very important to have a sound and stable fiscal regime there. That will be one of the items necessary of course to continue to progress that project.”

For more on this, see For Oil Companies, When Is Government Take Too Much?

Gazprom’s Export Monopoly

Rosenthal also alluded during the call to a dramatic ongoing change in the structure of Russia’s oil and gas system, which is the disruption of Gazprom’s monopoly over gas exports from the country.

ExxonMobil and Russian gas giant Gazprom have been at an impasse over natural gas exports from the Sakhalin I project for several years. Gazprom has long had a monopoly on gas exports from Russia (though that appears to be changing), and aimed to market Sakhalin I gas domestically, while ExxonMobil’s plans for the project envisaged exporting gas to China.

But ExxonMobil announced an agreement with Rosneft in 2011 entailing joint exploration and development in the US, Russia and elsewhere. The companies’ partnership has since progressed to include a range of cooperative projects, and the US firm’s prospects at Sakhalin I appear to have improved commensurately. ExxonMobil and Rosneft – which holds a 20% stake in Sakhalin I – are mulling building an LNG export plant to market gas production.

“We are looking at a potential LNG facility with Rosneft on Sakhalin Island, looking at some locations under consideration and progressing the evaluation of that project,” Rosenthal said. “We have a very nice gas resource in the area, and finding a way to monetize that would continue to make what’s already a very attractive project even more so.”