Chevron Vice Chairman Speaks to U.S. Congress About 'New Reality' for Energy

Peter J. Robertson

By Peter J. Robertson, Vice Chairman
Chevron Corporation

Statement Delivered to the House Select Committee on Energy Independence and Global Warming

Washington, D.C., April 1, 2008

Good afternoon. Mr. Chairman, Ranking member Sensenbrenner and members of the Committee, my name is Peter Robertson and I am Vice Chairman of Chevron Corporation. I'm here today, proudly representing 59,000 Chevron employees—27,000 of whom work here in the U.S.

I appreciate the opportunity to discuss the energy issues that are very much on your minds and all Americans.

I will address three topics:

  • rising oil prices;
  • our commitment to providing energy, including renewables; and
  • policies to ensure we enhance our energy security.

Four years ago we sent a letter to members of Congress; the Administration, Cabinet members; as well as trade associations and think tanks.

It foreshadowed the issues we face today … and included concrete ideas for action.

The letter said, "We face a new reality … volatility … high prices … greater competition for resources … and heightened geopolitical risks."

Today, this "new reality" is here, and it's costing us.

All Americans feel the pain of $100 oil, and not just at the pump. Everything is more expensive. People are concerned about rising costs. And rightly so.

The world is consuming oil an ever increasing rate and it is projected to continue. There are a billion people who enjoy our standard of living. There are billions more striving for the same. The current system is straining to meet their needs.

There is dramatically reduced spare capacity. There is no room for error.

Any disruption — or perceived threat of disruption — typically sends prices up.

And the declining value of the dollar has only worsened the situation.

This situation is not sustainable. It's time to take urgent action.

So what are we doing?

Chevron produces almost 1 billion barrels of oil equivalent a year. As large as that number sounds, it serves less than 3 percent of world demand. And in the U.S., our refineries produce 6 billion gallons of gasoline each year — another large number — but that's less than 5 percent of America's gasoline consumption.

Between 2002 and 2007, Chevron invested approximately $73 billion in new energy supplies — investing what we earned. This year, we'll spend another $23 billion, including $2.3 billion on U.S. refining and marketing activities. We've added one million gallons a day in gasoline capacity over the past two years.

Let's talk about renewable energy…

Today, Chevron is the world's largest producer of geothermal energy.

Between 2007 and 2009, we plan to spend $2.5 billion on renewables and energy efficiency services.

We've formed a range of partnerships to pursue next-generation biofuels.

Let me give you one example: we teamed up with Weyerhaueser Corp. because we need partners. They know plants. We know fuels. Together we provide the unique combination necessary to meet this challenge.

But it will take time to have a meaningful impact. A large biofuels plant in the U.S. produces in a single year what one of our refineries produces in a single week. The enormous scale of the energy system means that we must continue to bring traditional energy supplies to market — even as we accelerate the development of renewables.

But increasing supply is only one important step. We also need to aggressively moderate demand. America needs to become a nation of energy savers.

Chevron Energy Solutions has completed more than 800 energy efficiency and renewable energy projects largely in public facilities, reducing emissions and saving on average nearly 30 percent in energy and operational costs.

In closing, I want to emphasize what we can do together to help consumers.

The National Petroleum Council study involved 1,000 participants: scientists and NGOs, industrial consumers and policy experts. It recommended five strategies, ranging from moderating demand to expanding supply to increasing research.

It has given us sound … sensible … achievable solutions. Now … we need action.

We strongly urge you to implement its recommendations.

But first we need to change our nation's conventional wisdom about energy development and use.

On the demand side, our country needs to value energy as a precious resource. We need a Made in America solution, enabled by everything from human ingenuity to smart buildings… to advanced vehicles.

On the supply side, we need to be sensitive to the scale and timeframes required to alter the energy mix. We need your help to open up the 85 percent of the Outer Continental Shelf that is off limits. We can't expect other countries to expand their resource development to meet our needs as we limit our development without good reason.

And we need your help in dealing with inefficiencies in the gasoline market. There are 17 boutique fuel requirements across the country. More requirements on fuels are being added through renewable fuel mandates and proposed climate policies. These important policies must be advanced in a way Americans can afford.

The time for action is now. During the five minutes it took to deliver my remarks, the world has consumed the energy equivalent of 35 million gallons of oil equivalent.

Our collective leadership and ingenuity can set a path for true progress.

At Chevron, we'll continue to do our part.

Thank you.

Published: April 2008