Chevron CEO Speaks to Congress About Drilling Safety

John S. Watson

By John S. Watson, Chairman and CEO
Chevron Corporation

Statement Before the United States House of Representatives Committee on Energy and Commerce, Subcommittee on Energy and Environment

Washington, D.C., June 15, 2010

Chairman Markey, Ranking Member Upton and members of the Committee: I’m John Watson, and I lead Chevron. As we meet today, the tragedy in the Gulf of Mexico continues to unfold. Our thoughts are with the families who lost loved ones, workers who were injured, and communities that are dealing with ecological and economic damage.

For Chevron, this tragedy is personal. Our employees knew people who died on the Deepwater Horizon. More than 13,000 Chevron employees live and work in the Gulf region. We have a very personal stake in operating safely because it is our home, too.

For our industry, this is a humbling experience. The American people expect that the energy we need will be produced safely and reliably. That did not happen here.

This morning, I’ll focus my comments on what Chevron did immediately following the accident and why I believe deepwater development can be done safely.

After the Deepwater Horizon accident, Chevron provided its full support to the response. We deployed experts to assist BP and advise the Coast Guard on marine transportation planning. We’ve also been working with communities and organizations across the Gulf region.

We helped lead the Joint Industry Task Force, which made recommendations to the Department of the Interior to raise industry standards to an even higher level. A majority of these standards are already embedded in Chevron’s operations. Within hours, Chevron held safety stand-downs on our rigs around the world to review our drilling processes and procedures. We examined our blowout contingency plans and scrutinized our drilling and completion policies.

We also stressed the responsibility that every single Chevron employee and contractor has – the authority to stop work immediately if they see anything unsafe. We reward people who exercise this authority.

At Chevron, one goal overrides all others: making sure everyone goes home safe every day. We have multiple systems to prevent a tragedy like the Deepwater Horizon. Our drilling policies and procedures are rigorous. We require continuous training. We certify our drilling personnel to ensure they are qualified to manage unusual circumstances. And we verify that contractors have the skills to execute well control.

Our internal review confirmed what our regular audits have told us: Chevron’s deepwater drilling and well-control practices are safe and environmentally sound. Since our first year of deepwater exploration in 1987, Chevron has successfully drilled 375 deepwater wells around the world.

But, we know that we can always learn and improve. So we welcome any new standards and safeguards that improve safety and prevent future accidents. To that end, we must act quickly to implement the recommendations made by the Joint Industry Task Force to ensure that all companies are operating with the same high standards of safety and reliability. Chevron will adopt any new standards that it doesn’t already apply.

We must also expedite the work of two new industry task forces – one focused on subsea well control and the other on spill response and clean up. We also committed to work with the president’s independent commission. We’ll contribute to improve safety in every way we can.

Now, we must restore the country’s confidence in deepwater drilling. I believe the independent investigation will show that this tragedy was preventable. This is not a tradeoff of energy for safety. I strongly believe that responsible deepwater development must continue: America needs the energy. And we can produce that energy safely.

Our nation would lose more than it has already lost if this incident becomes the basis for reversing the many benefits of offshore development. Today, production in the Gulf of Mexico accounts for 15 percent of our nation’s natural gas and 27 percent of our domestic oil supply. Gulf of Mexico production also is a foundation of local economies – providing significant jobs, economic development and revenue.

The Deepwater Horizon tragedy reinforces that all companies must operate with the same high standards of safety and reliability. It’s clear that failure to do so has dire consequences.

Mr. Chairman, we must learn from this accident and we must make sure it never happens again. My commitment to you is that Chevron will do everything in our power to see that it doesn’t.

Thank you.

Updated: June 2010