Chevron Chairman and CEO Mike Wirth detailed what the American producer is doing to make the domestic energy supply more "affordable, reliable and cleaner" and discussed President Biden's claim over unused oil permits in a wide-ranging exclusive interview on "Mornings with Maria" Monday.
"The conversation about energy has become very polarized, and it's very difficult to find balance in the center," Wirth told host Maria Bartiromo. "And I think we need a pragmatic conversation that recognizes there are three things that really matter when you talk about energy."
Those three key factors are affordability, reliability, and cleanliness, according to the Chevron CEO, who further explained how bringing more U.S. oil supply to market directly impacts America’s economy and national security.
"Energy needs to be affordable because it supports economic prosperity. Second, it needs to be reliable because energy security and national security are linked. And then third, it needs to be ever cleaner," Wirth said. "We need to respect the fact that people want to see the environment taken care of. And so we need to balance our approach to energy, certainly as a company and I think as a country."
While President Biden has made a green energy future a priority and progressive states like California look to impose windfall taxes on oil companies producing excess margins, Wirth discussed those policies’ impact on domestic energy investment.
"These tax proposals would do nothing to bring more supply to market and lower prices. In fact, the risk is that they could do the exact opposite. We've seen this tried before. It didn't work in the 1970s and 1980s, and it wouldn't work today," the Chevron CEO said. "If you want more of something, if you want more supply of gasoline, you don't raise taxes on it and discourage people from investing in bringing more supplies to the market… That's why we need a balanced conversation and a pragmatic discussion about what really will bring more supplies to market in order to bring stable prices, which is what the economy would benefit from."
The nationwide price for a gallon of gasoline slipped Monday to $3.142, according to AAA. On Sunday, the price stood at $3.149, while on Saturday, the price was $3.159. A year ago, the price for a gallon of regular gasoline was $3.307. But the recent decision by the Saudi-led OPEC oil cartel to maintain output cuts of two million barrels per day has the potential to tighten global supply and drive up prices.
Wirth criticized the Biden administration for claiming there’s 9,000 active leases and "plenty of opportunities" for producers to drill more oil, while calling for federal reform.
"I don't know anything about this 9,000 lease number. I don't know where it comes from. We don't have anything even approaching a fraction of that," the Chevron exec said. "These things can take a long time. They can be challenged in court, and it is a very bureaucratic process. The idea of permitting reform, which has received a lot of discussion lately, actually, for all types of energy infrastructure, is a good idea, and I think it would be good for our country in order to encourage investment in infrastructure of all types, to find a way to have a proper permitting process that does protect the environment and ensures work is done safely, but doesn't allow people to delay endlessly these kinds of investments."
The CEO indicated that Chevron’s spending is up by 50% in 2022 from the previous year, and is expected to rise another 25% in 2023. "Much" of the energy company’s developments and projects are happening within the U.S. in oil-rich areas like the Permian Basin, which Wirth described as a "great asset" to energy independence.
"In a field like that, that can really underpin economic activity here. So it should be used wisely. It should be developed properly, it can be developed safely," he said. "Some of that production can, in fact, go back into filling the strategic reserve, which has been drawn down... considerably over the last period of time, and is at a level that is the lowest in nearly four decades, and should not be drawn down further."
Wirth also agreed that the transition to renewable energy can’t happen overnight, but rather takes "decades" for the right technology to evolve.
"The energy system is massive. The solutions will require technology that can scale human ingenuity, that can scale capital markets, that can scale investment into a wider range of technologies, that will ensure reliable supply into the future and also a lower carbon supply into the future. But it won't happen quickly," the Chevron chairman and CEO noted. "It will occur over decades. And I think the discussion that we engage in is beginning to reflect a greater recognition of those realities."
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