Chevron Vice Chairman Speaks to U.S. Senate About Oil Prices

Peter J. Robertson

By Peter J. Robertson, Vice Chairman
Chevron Corporation

Statement Delivered to U.S. Senate Judiciary Committee

Washington, D.C., May 21, 2008

Good morning.

Mr. Chairman, ranking member Specter and members of the committee, my name is Peter Robertson, and I am Vice Chairman of Chevron Corporation. I'm here today, proudly representing our 59,000 employees. I appreciate the opportunity to discuss the energy issues that are on the minds of all Americans.

I will address three issues:

  • rising oil prices
  • increasing energy supplies and improving efficiency
  • urgent policy actions to achieve energy security

Americans feel the brunt of record oil prices, and not just at the pump. Everything is more expensive. People are concerned about rising costs — and rightly so.

Global issues affecting the supply and demand of oil are driving prices up. The world is consuming oil at an ever increasing rate, and it is projected to continue. There are more than a billion people who enjoy our standard of living. There are billions more striving for the same.

The current system is straining to meet all our needs. There is dramatically reduced spare supply and no room for error. Any disruption — or perceived threat of disruption — sends oil prices up. And the declining value of the dollar — along with investors buying more commodities — has only worsened the situation.

In the past year, oil prices have doubled. We need to take steps to protect our economy, our consumers and our future. Massive investment is needed around the world. Some $22 trillion by 2030. And all stakeholders must do their part.

So what are we doing?

Chevron produces 1.7 million barrels of oil per day. As large as that number sounds, it's less than 2 percent of world oil demand.

We are aggressively spending to develop additional oil and natural gas supplies. Our capital budget this year is $23 billion for new energy projects — a record amount for our company and triple what we spent in 2004. In the previous six years, we invested nearly $73 billion — an amount greater than what we earned.

As the nation's sixth largest refiner, we are spending $2.3 billion this year on our U.S. refining and marketing business. And we are developing renewables and improving energy efficiency. We are a leading producer of geothermal energy and provider of energy efficiency services.

But Congress also has an important role to play.

For starters, we strongly urge you to implement the recommendations of last year's National Petroleum Council study. Its first recommendation is to reduce demand. We need to treat energy as a precious resource and become a nation of energy savers.

The study also urges us to increase energy supplies — in all forms. When it comes to energy security, we need smart policies that support our competitiveness and help decrease our dependence on foreign oil.

American energy companies operate at the frontiers of geography, geology and technology. We are large compared to most U.S. companies, but relatively small when you stack us up against the national oil companies against which we compete. These companies have control over most of the world's known reserves and many enjoy the unqualified support of their national governments.

Given these realities, Americans need companies that can effectively compete for access to new resources and responsibly develop new energy frontiers. Our size and strength allows us to develop many complex and expensive projects that can take more than a decade to complete. At Chevron alone, we have more than 40 projects in development right now — each cost, in our share, over $1 billion.

Americans also need your leadership.

Punitive measures that weaken us in the face of this international competition are the wrong solution at this critical point in our history. Such measures will only increase our dependence upon foreign supplies of energy while resources at home are untapped.

The stunning changes during this decade taught us that easy access to cheap oil is over. Consumers know this and are making hard choices to budget for their household needs.

We are making hard choices to mobilize more people and more money to increasingly remote locations in the world for more supplies. Chevron employees understand the enormous responsibility they have to deliver energy reliably and I can personally attest to their strong commitment.

Congress has recently made some hard policy choices on renewables and energy efficiency. We hope you can also make the equally hard choices to open up more federal lands and allow us to responsibly produce more American oil and natural gas, which can supply us for decades to come. We can't expect other countries to expand their resource development to meet our increasing needs when we limit our development without good reason.

Our collective actions can demonstrate leadership on issues that are within our control and help us weather the powerful forces we cannot control.

You can count on us to work with you on this extraordinary challenge.

Thank you very much.

Published: May 2008