June 2009
"We take seriously our responsibility in developing cleaner, renewable energy sources and technologies for the future," affirmed former Chevron Chairman David J. O'Reilly in a public discussion with Carl Pope, executive director of the Sierra Club, a prominent U.S.-based grassroots environmental organization. "But as a nation, we will only be successful if we find common ground. We need to set our standards high but not create false expectations."
Before a live audience of more than 500 people in San Francisco, Calif., O'Reilly and Pope discussed how the United States must balance energy needs with environmental concerns. Moderated by The Wall Street Journal Deputy Managing Editor Alan Murray — who introduced both men as "giants" in their respective fields — the event was hosted by the Commonwealth Club, the United States' oldest and largest public affairs forum.
During the program, themed "Drilling for Common Ground," O'Reilly and Pope found many areas of agreement between their two organizations — namely, the critical importance of increasing energy efficiency and continuing to reduce carbon emissions.
Different Paths, Common Goals
O'Reilly began his remarks by welcoming a healthy discussion and framed the exchange by highlighting the commonalities shared by Chevron and the Sierra Club. He said both organizations support the environment, energy efficiency, conservation and renewable energy.
The difference, he noted, comes in each organization's notion about how best to achieve these shared goals. Taking a realistic view of the world's energy needs is imperative, beginning with an understanding of scale.
Describing the enormity of today's global energy system, O'Reilly said, "If one looks at the data, there is no avoiding one simple conclusion: the sheer scale of our energy needs is far beyond the capacity of any one source or technology."
On the need to strengthen U.S. energy security, O'Reilly described how over the past 25 years, U.S. oil production has fallen, while demand has grown — both by 4 million barrels a day. Increased demand has been met almost entirely by more imports, despite a nearly 2,000 percent increase in ethanol production.
"The challenge of scale demands that we acknowledge that conventional energy sources will remain indispensible for decades to come," O'Reilly said. "We must be realistic. For the foreseeable future, we need to develop it all, conventional and unconventional forms of energy as well as renewables and alternatives."
While he agreed that carbon emissions must be reduced, O'Reilly deemed unrealistic the goal of reducing emissions by 80 percent by 2050 — a goal that the Sierra Club supports.
"Even with the best of intentions, we can only get part of the way there," he said, suggesting 20 percent to 25 percent as a more realistic goal. Replacing America's entire transportation and power generation systems with a zero-carbon solution would only garner a 74 percent reduction, assuming no growth.
O'Reilly challenged the audience, "We need to ask ourselves: can we replace our entire energy system in just a few short decades?" That energy system, he highlighted, is the product of more than 100 years of investment.
Both Pressing for Progress
Although there remains disagreement — primarily related to time frames for change — about how best to meet the world's energy needs while addressing environmental issues, the two leaders did find some common ground.
O'Reilly applauded the Sierra Club's efforts to advance energy efficiency, and Pope said companies like Chevron now know how to produce oil in ways that are environmentally responsible. O'Reilly discussed Chevron's own efficiency gains and long-time focus on balancing energy and the environment. He highlighted the company’s status as the world's largest producer of geothermal energy; Chevron’s Weyerhaeuser partnership aimed at developing commercial biofuels from nonfood sources; and the work of Chevron Energy Solutions, the business unit focused on increasing energy efficiency at public institutions and businesses.
Both agreed that the current discussions in Washington, D.C., on a cap-and-trade approach to reducing carbon emissions are complex and confusing, and they advocated for a more transparent system of reductions.
When the moderator asked O'Reilly whether someone in his position is really able to advocate for dramatic reductions in carbon emissions, the chairman said that what is at issue is not whether one can simply advocate for reductions, but advocate for reductions that are realistic, economic and achievable.
Updated: September 2009