The world's increasing need for energy poses complex challenges for consuming and producing nations. Access to reliable, affordable supplies of energy is a critical factor in helping to improve the living standards of people in the developing world.
To improve worldwide energy security, the United States and other nations need sound, cooperative energy policies that address a wide array of political, economic and environmental issues. With about 70 percent of the world's proven crude oil and natural gas reserves owned by governments and state enterprises, it is more important than ever for governments and industry to work together to balance supply with demand.
In our economic and development strategies, we must focus on initiatives that will increase and diversify our supplies—including alternative and renewable energy—and use existing resources more 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 one of the world's largest producers of geothermal energy. Through our subsidiary Chevron Energy Solutions (CES) and at test installations in California and New Mexico, we are unlocking the potential of solar energy. And our research on second-generation biofuels is looking for opportunities to use fuel sources that do not compete with food supplies.
Nevertheless, fossil fuels will continue to provide the majority of the world's energy supplies for decades to come. Even under the most aggressive climate policy scenario presented by the International Energy Agency, fossil fuels are still expected to contribute at least 50 percent of the world's energy supplies in 2035. That is why we are tapping into new sources of hydrocarbons in hard-to-reach areas like oil sands and making large investments in shale gas deposits. In addition, we continue working to improve efficiency—the most effective resource for energy security—both for ourselves and for others. At Chevron, we have improved our own energy efficiency by 34 percent since 1992, enabling us to use much less energy today. Through CES, we are assisting customers in government and private sectors to do the same. We continue to invest our resources and expertise to find more efficient, economical, and environmentally sound ways to deliver the energy the world needs for economic growth.
Creating a Sound Energy Strategy
Governments are critical participants in stimulating the development and deployment of new energy technologies. Their most critical role will be to set and maintain a policy framework that promotes energy and environmental security.
That strategy should embrace new areas of development that are becoming available as a result of our increased investments and advancing technology. The delivery of new energy supplies to market remains hindered by restricted access and lengthy regulatory processes in many countries throughout the world, including the United States. Governments should move proactively to address these issues.
Adopting a New Framework
Chevron believes the time has come for a new producer-consumer framework in which producing nations increase capacity through shared investment with consuming nations. In addition, producing and consuming nations alike would commit to increasing the efficiency of their energy usage.
Such a framework should be a top priority of energy diplomacy and feature 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 the world faces today.
- Sound policies – To encourage investment across the entire energy portfolio, sound and consistent policies must be enacted. These policies should promote stable, predictable fiscal and regulatory regimes, protect the sanctity of contracts, and strengthen the rule of law.
- Robust, scientifically sound technology – This will enable the 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 development can be achieved through joint ventures and partnerships that foster the sharing of technology and best practices.
- Increased energy efficiency – This remains our cheapest and most abundant form of new energy. Energy conservation and efficiency, incorporating a wide range of behaviors and standards, must be part of any energy strategy.
- 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 2013