The world's ever-growing demand for energy poses complex challenges for consuming and producing nations alike.
The United States and other nations need sound energy policies that accommodate a wide array of political, economic and environmental concerns. No country is energy independent. We live in a world of energy interdependence.
The majority of the world's oil resources are concentrated in just five countries: Canada, Iran, Iraq, Kuwait and Saudi Arabia.
Major oil- and natural gas–producing exporting nations and consuming nations, which rely heavily on imports, must find new ways to work together. Government and industry should collaborate to promote a global marketplace for affordable, reliable energy.
In our economic and development strategies, we must focus on initiatives that will increase and diversify our supplies — including alternative and renewable energy — and that will use existing resources efficiently.
What We Are Doing
As one of the world's leading integrated energy companies, we are working to increase, diversify and conserve our energy resources.
We are the world's largest producer of geothermal energy. We also are tapping into new sources of hydrocarbons in hard-to-reach areas and unlocking the potential of alternative energy sources, such as second-generation biofuels, which will be made from sources that do not compete with food supplies.
Nevertheless, we understand that both today and for decades to come, fossil fuels will provide more than 80 percent of the world's energy supplies — as recognized by the International Energy Agency and a recent comprehensive study by the National Petroleum Council. At the same time, we should do everything we can to develop alternative and renewable fuels because the world will need energy from all sources.
In addition, we continue working to improve efficiency — the largest available resource for energy security — both for ourselves and for others. Since 1992, we have increased our energy efficiency per unit of output by 28 percent. Through Chevron Energy Solutions, we are assisting other customers, in government and private sectors, to do the same. And we are investing our resources and expertise to find better ways to deliver the energy the world needs in order to fuel economic grow.
Much of our work is through partnerships. And partnerships — between governments and industry and between producers and consumers — are key to providing the world with the energy needed for human progress.
What Governments Can Do
Governments can help stimulate the development and deployment of new energy technologies, next-generation ethanol fuels and advanced battery systems. However, the most critical role of governments will be to set a policy framework to promote energy and environmental security and to balance these effectively.
Creating a Sound Energy Strategy
We need an energy strategy based on sound management principles that include efficiency, protecting core investments and investing in the future.
That strategy should reflect new areas of development that are becoming available as a result of our own increased investments and advanced technology. But the delivery of new energy supplies to market is hindered by restricted access and lengthy regulatory processes in both the United States and abroad. Governments should move proactively to address these issues.
Adopting a New Framework
How we respond to the challenge of energy security will determine the economic outlook not only of individual nations, but also of the global community.
For this reason, Chevron believes the time has come for a new producer-consumer framework. Within this framework, producing nations would effectively agree to increase capacity through shared investment with consuming nations. In addition, producers and consumers alike would commit to increasing the efficiency of their energy usage, yet reliable demand for producers would continue.
Such a framework should be a top priority of our energy diplomacy, featuring five fundamental elements:
Open markets – Transparency and the free flow of energy trade and investment can occur only on a level playing field. Removing market barriers can significantly increase production and moderate the price volatility we face today.
Sound policies – To promote stable, predictable fiscal and regulatory regimes, the sanctity of contracts, and the rule of law, sound policies must be put in place. The better established these are, the greater the investment development and security of energy resources for all countries.
Robust technology – This will enable the conservation and optimization of the resources we have now and the development of a full range of new energy sources while protecting the environment. A climate of robust technology can be achieved through joint ventures and partnerships that foster the sharing of technology and best practices.
Increased energy efficiency – This remains the cheapest and most abundant form of new energy we have. Energy conservation and efficiency deserves a commitment from each and every one of us.
Responsible development – The production and use of energy must serve as a platform for broader economic growth and social well-being. We must ensure that the economic benefits of energy flow to all stakeholders, including the poor and the vulnerable. This can be done only through proactive national and international leadership fully supported by industry.
Taken together, these five elements can effect a profound change in the relationship between energy producers and consumers. They can provide true energy security based on a clear understanding and acceptance of interdependence supported by strong, mutually beneficial partnerships.
Updated: May 2009