Dear Mr. President:
Thank you for your letter dated June 14, 2022. As industry leaders, academic experts and numerous policymakers have pointed out, there are no easy fixes or short-term answers to the global supply and demand imbalances exacerbated by the Russian invasion of Ukraine. Addressing this situation requires thoughtful action and a willingness to work together, not political rhetoric. I look forward to meeting with Secretary Granholm and look forward to a constructive conversation on actions to address short-term issues and the long-term stability of energy markets.
In 2021, Chevron produced the largest volume of oil and gas in our 143-year history. In the first quarter of 2022, our US production was 1.2 million barrels per day, an increase of 109,000 barrels per day from the same quarter a year earlier. In the Permian Basin alone, we expect production to approach 750,000 barrels per day by the end of the year, up more than 15 percent from 2021. And Chevron’s U.S. refinery intake has grown to 915,000 barrels per day. day on average in the first quarter of this year from 881,000 in the same quarter last year.
In addition to increasing US oil and gas production, Chevron is also investing $10 billion to reduce greenhouse gas emissions and scale advanced new energy technologies such as carbon and hydrogen capture, as well as increasing our ability to production of liquid renewable fuels to 100,000 barrels/day by 2030 The United States will lead these critical new industries, creating jobs at home and exporting them to the world to meet energy and climate goals.
American supplies of oil and gas are among the most efficient, responsibly produced, and least carbon-intensive in the world. At approximately 15 kg of CO2 equivalent per barrel, the carbon intensity of Chevron’s Permian Basin is about two-thirds lower than the global industry average. US production in the Gulf of Mexico is carbon-intensive only a fraction of the global industry average. The increase in US production will offset barrels produced in other parts of the world that may not support US energy security, economic competitiveness or environmental goals.
I want to make it clear that Chevron shares your concerns about the higher prices Americans are experiencing. And I assure you that Chevron is doing its part to help address these challenges, increasing capital spending to $18 billion in 2022, more than 50% more than last year.
Chevron and its 37,000 employees work every day to help provide the world with the energy it requires and improve the lives of the billions of people who depend on those supplies. Despite these efforts, your administration has sought to criticize and, at times, defame our industry. These actions are not beneficial in addressing the challenges we face and are not what the American people deserve.
While the current geopolitical situation is contributing to this energy crisis, lowering prices and increasing supply will require a change in approach. It appealed to our industry to increase energy production. We agree. Let’s work together. The US energy industry needs your administration’s cooperation and support to get our country back on the path of greater energy security, economic prosperity, and environmental protection.
We need clarity and consistency on policy issues ranging from leases and permits on federal lands, to the ability to permit and build critical infrastructure, to the proper role of regulation that considers costs and benefits. Many of these elements are described in the 10-point plan recently launched by our industry. Most importantly, we need an honest dialogue about how to better balance energy, economic, and environmental goals – one that recognizes that our industry is a vital sector of the US economy and essential to our national security.
We can only meet these challenges by working together. Chevron will be involved in this week’s meeting with Secretary Granholm. I encourage you to also send your senior advisors to this meeting so they too can engage in a robust conversation. Its “whole of government” philosophy in addressing important issues should also apply here, as a comprehensive approach is best to meet the energy needs of our nation and our allies.
The American people rightly expect our country’s leaders and industry to address the challenges they face in a serious and resolute manner. We are a willing partner in this endeavor and we trust that your administration will be the same.
Michael K. Wirth
Chairman of the Board and CEO