Chevron’s CEO: Oil & gas go hand in hand with low-carbon solutions
As nations around the world don their thinking caps to come up with ways to tackle the climate woes while ensuring the security of energy supply, different pathways have emerged to come to grips with these challenges. Some are only interested in going green, but Chevron’s Chief Executive Officer (CEO) is adamant that the world needs more oil and gas alongside low-carbon solutions.
This is in line with the U.S.-headquartered energy giant’s view that multiple and diverse energy sources are required to future-proof the energy mix and meet the anticipated growth in demand. While it is hard to accurately predict what the future may have in store, many, aside from environmental and climate activists, agree with Chevron’s assessment that all energy sources, ranging from fossil fuels to renewables and low-carbon variants, will have their place in the energy mix over the coming years.
Mike Wirth, Chevron’s Chairman and CEO, told CNBC’s Brian Sullivan: “We don’t control demand. We supply demand. And so, we will grow our oil and gas business over the next five years.”
During a round of recent interviews, the U.S. oil major’s CEO hammered home the importance of continued oil and gas production by explaining that worldwide demand for natural gas and oil would grow through the decade’s end. He also added that Chevron was expanding its traditional energy business while investing in technologies to meet the demand for new energies.
“We need to reduce the emissions from traditional energy, which we’re doing by reducing our carbon intensity of oil and gas that we produce today. At the same time, we’re investing in new technologies to grow new sources of supply as demand for all forms of energy continues to grow,” highlighted Wirth.
While shedding more light on the importance of enlarging not only the oil and gas portfolio but also the low-carbon one, Chevron underlines that the world is already witnessing a record need for energy, with last year’s oil demand setting a record and this year’s demand tracking to top it.
Despite recent assertions about the peak oil demand before 2030, the U.S. oil major is convinced that oil and gas will remain a substantial part of the world’s energy mix up to 2050, as such an outlook has been projected across a wide range of future scenarios published by industry experts including the International Energy Agency (IEA), OPEC, the U.S. Energy Information Administration (EIA), and others.
Furthermore, Wirth underlined that Chevron was progressing toward its lower carbon ambitions during an appearance at the Council on Foreign Relations CEO Speaker series. The U.S. player’s CEO outlined how the company was working toward reaching its upstream methane-intensity target by 2028. To this end, the firm reduced the methane intensity of its oil and gas operations by more than 50% since 2016.
During an interview with Daniel Yergin, vice chairman of S&P Global, Wirth noted: “There are three things that really matter when you talk about energy: affordability, reliability and the environment. If you have an energy policy that focuses on only one of those, you can create unintended consequences and have something that is not sustainable.”
According to Wirth, Chevron is the second-largest producer of renewable fuels in the United States and is investing in a hydrogen project that enables utility- and industrial-scale storage of renewable energy. The U.S. energy giant’s CEO advised policymakers to not exclude one energy source in favor of another, as many solutions would be needed. He also pointed out that solutions need to be scalable and enacted with speed.
“If we can’t scale them up, they can’t make a difference. And then if you get solutions that work on scale, we need to do it with some speed, and that’s where capital markets come in and you harness private investment. If you start to rule parts of the solution out, you’re never going to solve the problem. And so, we need to rule things in,” elaborated Wirth.
Moreover, Chevron’s CEO underscored at the Wall Street Journal’s CEO Summit the important role companies play in helping supply both traditional energy and lower carbon solutions, saying: “We have to be able to do both.
“One of the big challenges for an energy company like ours is we’ve got a big business today that meets the needs of the world, and we’ve got customers and economies around the world that depend on what we do to keep the lights on and the trains going.”
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