Refueling stations are costly, as much as $1 million, he said.

"If you're a mom-and-pop retailer, that's almost impossible to do without a lot of help," Tillerson said.

For long-haul trucks, "I can't make the math work on why anybody would do that," he said, since the trucking industry relies on a service stations across the country.

He conceded that vehicle fleets that use one central refueling station might make sense.

Still, Tillerson said, converting an existing vehicle to natural gas is costly.

And while a conversion can cut a vehicle's carbon dioxide emissions by as much as 20 percent, Tillerson said the internal combustion gasoline engine has a lot of room to improve on greenhouse gas emissions.

Tillerson shares Pickens' view that natural gas will become more important for Americans. Exxon predicts the U.S. will shift more power generation to natural gas in coming decades.

That's why Exxon has offered to buy Fort Worth natural gas producer XTO Energy for $41 billion, including debt assumption. The deal gives Exxon a large stake in natural gas production in North Texas' Barnett Shale and similar shale fields around the country.

Tillerson said again on Thursday he plans to use XTO as a global unit to produce natural gas from so-called unconventional formations, such as shale. But he has said Exxon isn't shifting away from oil or changing its strategy.

Exxon executives said Thursday they plan to invest $28 billion in capital spending this year, and to continue investing between $25 billion and $30 billion each year through 2014. Exxon invested $27.1 billion in 2009.

Tillerson also said at an analyst meeting that he expects Exxon's investment in Iraq to yield double-digit returns, if the company manages the project properly.

The company recently signed an agreement to drill for oil in Iraq, and has begun holding planning meeting with its Iraqi counterparts.

"They have been more enthusiastic about our joint work than perhaps we even anticipated," Tillerson said, adding that even though security is improving, it will continue to be a challenge.

Buck