Chevron CEO says company is embracing, investing in a lower carbon energy system


What's best performing sector since election day. You'll never believe it energy and we talked about energy. I mean fossil fuels with multiple co vaccines. Right around the corner. The economy will soon be able to reopen which means more demand for oil and gas ray of yours. No i'm not a fan of this industry anymore. I think the long-term press but posthumous have gotten grimmer but there are two fossil fuel stocks that i still consider investable one of them is chevron the big integrated the king of the oils the best of the best chevrons held up surprising well during the pandemic. And it's got a powerful safe dividend of five point seven percent. The only problem the stock is now thirty five percent in the last six weeks. So kennedy keep climbing. Let's take a closer look with mike. He's the chairman ceo of chevron corporation. Get clear picture of the industry and his company said mr. Moore's welcome demand money jim. It's good to be with you all right so you got to solve this for me. As long as i've been in the business always one company that was the best and it wasn't as yours. It was a company called back son. There are a lot of others that were doing. Well now they're chevron and there really is everybody else everybody else being companies. I'm worried about the dividend that article in production. That aren't conservative. What happened to chevron at the other guy should have listened to well jim. Different companies have made different choices as As we came into this and as as we've gone through this so have changed their dividend policies. Some of changed their strategy. Some of change their financial priorities. We haven't our dividend to secure as you mentioned are balance is strong our strategies are intact and there's no they can count on us so we were we were well prepared as As we went through the cycle. And i think that people realize that we've been constant at a time when many others have changed. Now you'll have when it's necessary been aggressive for instance. You were very aggressive in the gulf of mexico drilling wells that are going to produce oil for year. They don't run out those wells. I mean that's just something that you did. Everybody else went away from it. How did she have the dish do that. Jim it's a long term business. Demand for energy in the world is enormous seven and a half billion people on the planet today. By twenty forty there will be nine billion in all of them deserve the things that affordable reliable energy can provide. so we've got to take a long view on investments and at the same time you've got to take a short view in terms of being prepared for markets that are very volatile and unpredictable. So it's an and world actually have to do both. We have to look out the front window. Twenty years down the road and we look out the window of the house today and see what's going on the world today and manage our way through both of those. Let go out twenty years. You bought a company called no one. None well terrific. I visited leviathan. It's an incredible field in metro. Train off the coast of israel. I could see a visionary saying you know what it's time to disenfranchise gas prom company bringing its gas to the west and make it. So there's a pipeline from israel all the way up through central europe and that could be something that's a twenty five year project pie in the sky. Well that's certainly one of the opportunities to commercialise. What is a large gas resource in the waters of the eastern mediterranean office. Real right now at feeds markets in israel egypt and jordan their opportunities to take liquefied natural gas to other markets and certainly longer term. These types of resources often lend themselves to infrastructure developments to feed market. Europe is not not far away so those are all options to commercially develop that resource and supply markets in an affordable reliable manner. So that that's the type of thing that our company does really well and it's a long term view that we have to have to sustain our company at the same time. I've noticed that you need to be able to have common ground with whoever's in the white house. I'm not going to try to say you have to do this do that. Because you're reasonable person. Have come up with it. But if you have a really aggressive. Climate change president and team. Is it perhaps possible that they make it. So that you that you're not able to enjoy your own properties. Well jim we've been in business for over one hundred forty years we've worked with republican administrations with democrat administrations with split government with unified government. And we always start with common ground. Government wants economic development and prosperity for its people and governments want a cleaner environment We look for the common ground and there's always common ground because we're critical part of the economy. We may not agree. One hundred percent with any given administration on everything. But there's usually much more we're aligned on than we're different have different views on and then we sit down at the table and we work our way through those things. We've got different points of view and that's exactly what we expect to do. with this administration and every other one that follows but mike how do you sit down with fund. Managers younger financials. You say you know what we're about trying to be carbon neutral even make it so carbon negative so to speak so chevron can never be a holding embarrassed and better. How much do you think that works good. And they have great dividend policy. We can own what happens if too many managers start thinking that way. Well jim what managers really want out of our industry and out of our company. It's better returns and boil our strategy down to four simple words. Higher returns lower carbon. And we need to do both. And we need to find ways to invest in things that are good for shareholders and also good for the environment if we do just just invest and things are good for the shareholders and ignore the environment. That's not sustainable. And if all we do is invest in things that have an environmental case and they don't create value and returns for shareholders. That's not sustainable. Either so we sit down with portfolio managers of all ages and all levels of experience and talk about how to deliver higher returns and lower carbon That's what people. I think that's been investors are looking for well. How about another way to look at it. Some people feel jim. Do not see the future. Do you not see tesla. Do you not see the hydrogen fuel cells. Judah there's no room in portfolio because it's going to happen fast than you think you think the demands big al twenty thirty years. Probably the way. I too but they feel no mike they feel. It's gone away. Fashion than you. And i think and that has caused me to pull in my horns about a group i really like. Would you have we embrace a lower carbon future. We expect lower carbon energy system. In fact the energy systems always been moving towards lower carbon hundred. And fifty years ago cole came along a displaced would eat and then you had oil and gas and then you had nuclear hydro wind solar hydrogen now. The energy systems always been in transition. And we're investing today in. I'll give you an example renewable natural gas if you've ever driven by dairy farm or a feed lot. There's there's a certain aroma that you you may recall We're actually capturing the waste products from dairy farms now fermenting the those products to create the natural gas product cleaning it up moving it into a pipeline so it can displace fossil fuels so we reduce methane emissions and we create a salable renewable product. So we're investing in things like that. We're investing in nuclear fusion. we're investing in hydrogen. We're investing technologies that can scale and make a real difference and be part of a carbon energy system. This is the history of our company. And i believe it's the future of putting a hydrogen fuel cells all of your incredible gas stations. How about making that statement saying to the rest of the industry and all the espn enthusiasts. Look we are doing something right now. That's economic but it is gonna kill it in the five six years you could do that. Might your this and you've got the balance what we're working on these kinds of things. Jim we come back to. It's an world we've got to have higher returns and lower carbon and so we've gotta find things that work for shareholders and work for the environment and that's exactly what we're working on so i think i think you're going to see our company and you'll see others in our industry that continue to find solutions and this is a challenge that is too big for any one company anyone industry or anyone one country in the world to completely address We're gonna work in partnership with others and continue to advance the you know the state of the energy system which will only grow. Well mike. you've always been the you've been the voice of reason. Your company's been the scientific company all along people should know that chevron has always had the most scientists and engineers at the top might worth chairman. Ceo of chevron sir.

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