Over much of the past three decades, ive been an investor. [applause] the highest calling of mankind, ive often thought, was private equity. [laughter] and then i started interviewing. I watched your interviews, so i know how to do some interviewing. [laughter] ive learned from doing my interviews how leaders make it to the top. Jeff i asked him how much he wanted. He said 250. I said fine. I didnt negotiate with him. I did no due diligence. David i have something i would like to sell. [laughter] and how they stay there. You dont feel inadequate now because being only the second wealthiest man in the world, is that right . [laughter] about 40 years ago, a Young College graduate, mike wirth, joined chevron. Then and now, one of the Largest Energy companies in the world. Today, he is the ceo of chevron and dealing with multiple issues that Energy Companies have to deal with today, including Renewable Energy. I sat down with mike wirth to find out what its like to run chevron today in the current environment. So tell me about the state of , the oil world right now. It seems as if the large Oil Companies and carbon Energy Companies are doing well with record profits and record revenues. As a result of that, some people in the white house and other places have suggested a windfall profit stack. Is the industry in such great state that it can afford that . Mike its a cyclical industry. We see prices go up. We see prices go down. Windfall profit tax wont encourage more supply. Its not likely to produce reduce prices. In fact it will do the opposite. , president carter tried a windfall profit tax in 1980. It was rescinded several years later and had collected a lot less revenue than was expected and didnt result in more investment. It resulted in less investment and less production. Normally, if you want less of something, you tend to put more taxes on it. If you want less smoking, you will tax cigarettes. If you want more Energy Production, you want more supply to bring prices down. Putting taxes on Energy Production is probably not a good idea. David your current job do you , have to go to washington to talk with legislators and regulators . Do you find that an uplifting experience to do that . Mike i do have to go to washington. Uplifting is not the first point to come to mind. They are detailed discussions that we have to help our regulators understand the consequences of some of the things they consider. David when you say that washington doesnt understand the economics of the Energy Industry or they could learn a little more than they know now . Mike i have empathy for people that sit in these roles. They have often broad responsibilities and they may not have personal expertise and depth in some of the areas they are responsible for. I view my job is to come in and try to provide objective input and help them understand the consequences of things they are considering to avoid unintended consequences and help achieve the goals that they are looking to achieve. David when the president of the United States says Energy Companies are gouging the american people, you get used to this when you are an Energy Executive more or less, i assume. You dont like it but you are accepting of it. Mike i disagree with that characterization. I dont think its accurate. We are an industry of price takers, not price makers, global Commodity Markets and prices go up, prices come down. We allocate billions of dollars of capital, our company does every year. Just two years ago, we were losing billions of dollars as prices plummeted. So, through the cycle its an industry that generates 10 returns on capital employed, which is, by the standards of many other industries, pretty modest return. David the war in ukraine has driven oil prices up, i think its fair to say. Do you think that is the principle reason why the major Energy Companies are doing well, because the supply has produced because of the war in ukraine . Do you think, when the war ends, eventually it will, i assume, it will have an impact on reducing Energy Prices and carbon areas . Mike the war and the associated actions have definitely had an impact on energy markets. If you step back and look at the broader context, in 2020 we saw demand collapse with the pandemic when the world really locked down. In fact, companies in our industry had to shut in wells and stop producing because there was no place to store the oil that was not needed by the market. So investment levels came down and nobody knew how long it would last. As the economy recovered, postpandemic, we had vaccines, and demand returned. The industry has been struggling to keep up with the rate of growth, once again. So the market was already in a pretty tight situation before this war began. I do think, when it eventually has resolved and all conflicts eventually are resolved, i think that uncertainty and risk to supply for one of the Worlds Largest suppliers will be reduced and i think we will see markets reflect that. David a number of Years Ago Oil prices went as low as 20 a barrel. When it was that low, major Oil Companies like chevron and others said, we cant afford to drill anymore in alaska or the north sea, or other places, because we need to have oil at 70 a barrel and make Oil Affordable and profitable. Has that come back now that oil prices are up . Are people drilling in Major Projects around the world to get oil that will take 4, 5, 10 years to build and drill or is thats not happening again . Mike we are seeing this happen again. What has really changed in the last decade, david, is what we see in the u. S. And the Permian Basin, but also in some other parts of this country and in other countries now is the ability to produce oil and gas from rock that is very dense, very hard, and historically has not been very productive. But with Directional Drilling and the ability to fracture these formations now, we are seeing the ability to produce from areas we could not before, and at prices that are lower than some of these complex, difficult projects. And so the need for the ultradeep water, the arctic, has been reduced as we see these other resources come in at a lower cost. David how many employees does chevron have . Mike about 36,000 in about 100 different countries. David how much oil do you produce per day . Mike a little over 3 billion barrels of Oil Equivalent a day. Mostly oil, some gas. We convert the units on the gas to give the energy equivalent. About 3 Million Barrels. David the United States produces 10 Million Barrels a day or Something Like that . Mike closer to 12. David you are producing 25 of the oil produced in the United States, more or less . Mike as a Company Committee , you could say that our production is 1. 2 million a day, so we are less than 10 of u. S. Production. David right now, the United States is energy sufficient compared to the 1960s or 1970s, when we imported a lot of oil. We probably consume 10 million to 12 Million Barrels a day. Mike closer to 20. David we consume 20 Million Barrels a day and we produce roughly, you are saying, 12 . We are importing the equivalent of 8 Million Barrels a day, just better than it used to be. Where are we mostly importing that from . Is it opec countries . Mike canada, our neighbors are the largest suppliers of oil and you remember all the conference around the keystone pipeline. We are a big customer of canada, who is a Large Resource country. David how do you get the oil down here . Mike there are other pipelines that have been built in years gone by. Sometimes it flows by rail and some comes by ship. You can bring it down through pipelines along ports of the west coast or into the Atlantic Basin and bring it by ships. Canada is the largest supplier than other people in the region. We still bring some oil to the country from the middle east. David do you think there is much oil to be found in the lower 48 at this point or lets say alaska, as well, or mostly we know where all the oil is and there is no more big Permian Basin deposits anywhere . Mike people have said that over time, and we have always been surprised. The u. S. Has been explored more than any other place in the world. I think the industry has a good idea. But Technology Allows you, sometimes, to recover things that you havent been able to before. Thats the story of shell. The other one that continues to be a positive story is deepwater gulf of mexico where we will go out and drill a mile or more of water depth, then go down six to 6, 7, 8 miles into the earth and find large fields. The gulf of mexico is still relatively underexplored compared to the onshore. I think theres still room for more discoveries. David so, when you were starting their 40 years ago, did you say, i might be the ceo some day or was that not realistic . Mike i just hoped it would last the next two weeks to get my next paycheck. That was never the game plan. David lets talk about chevron itself. What are the roots of chevron . When was chevron created, when did it start . Mike founded in 1879 in southern california, began as a Company Called Pacific Coast oil company. Made the first commercial discovery in california, in pico canyon in southern california, became part of the Rockefeller Standard Oil trust in the latter part of the 1800s, and then became standard oil of california when the Standard Oil Trust was broken up. Our headquarters have always been in california. We have been around for 143 years and really a part of the worlds history. Made the first discovery in the middle east, first discovery in saudi arabia, among other milestones, and a long history of the world really reflecting reflected in our company. David if i go to a gasoline station and want gas for my car, is there a difference between the oil that chevron might be producing than one of your competitors . Is that gasoline all the same . Mike there are specifications, minimum standards that have to be met for the products. Then you find Different Companies either exceed those by more or less than others, and also, we have special additives. So we have a whollyowned Additive Company that manufactures an additive called techron that has a very special chemistry to keep engine parts clean. As they get sophisticated, as tolerance gets thinner, you have carbon deposits that affect performance in your cylinders. David if you are driving along and you need gas, will you stop at an exxon station or do you keep going until you see a chevron station . Mike keep going until i see a chevron. David lets talk about your background. How does one become the ceo of chevron . Where were you born . Mike i was born at los alamos, new mexico. My dad worked at the national lab, and i grew up in colorado. Golden, colorado. David you went to college where . Mike university of colorado in boulder and studied chemical engineering. David and you said, i want to work in the energy world . Mike at the time, chemical engineers could work in a number of different industries. I had a summer internship where i worked in a refinery in the denver area. I found the work interesting. I found the people interesting. I had an offer to come to the west coast to work for standard of california, and it looked like a fun place to live and a place where i could do interesting work. David basically, this is your only employer that you would like to acknowledge . When you started there, did you say i might be the ceo some day or did you not think it was realistic . Mike i just hoped i would last the next two weeks to get my next paycheck. That was never in the game plan. David what did you do . Did you move around the world over the course of your 40 years at chevron . What did you do to rise up . Were you an operations person or an exploration person or an administrative person . Mike i started out as a design engineer and worked on big projects. An oil shale project, not the type we develop today, but the other you use to hear about. I built a plant that you cant find any trace of today. I worked in a facility in california that helped to bring in oil from offshore. Sold for pennies on the dollar, eventually. A project in africa, which never happened because of the civil war. I began by specializing spectacularly in unsuccessful projects. At some point i said, this doesnt look like a great career path, so i moved into the Marketing Business where i built gas stations and replaced underground tanks that were made of steel with ones that were made of fiberglass so they would not leak. You and i remember the old clicketyclakety wheels that would spin around on the gasoline pumps. I used to put in the first electronic pumps back in the day, so these were smaller projects, but i could see the beginning of the end and i started to understand the commerce and how the business worked on a variety of roles, primarily operating roles across different businesses in and around the world. David when did you become the ceo . Mike five years ago. 2018. David some people might say god looks favorably upon the ceos of Energy Companies because they live a long time and a number of your predecessors have lived quite a while and some live in the same area where you are now. Do they call you with advice all the time . Mike actually, im really fortunate. The three people who have done my job, immediately preceding me , each for a decade, the 1990s, the 2000s, and the 2010s, live within a few miles of where i live. I see them regularly, we have lunch together. David that is a plus. In other words dont they tell , you, you are doing this or that wrong . That doesnt come up . Mike i get a lot of good advice. These are people who have actually done my job. Im interested in their advice, because they have lived through wars. They have seen the fall of the soviet union, terrorist attacks, financial crises, theyve seen oil markets go through gyrations. Theyve dealt with geopolitical surprises. And so their advice is valuable. During covid, the first thing i did was call each one of them and say, what lessons did you learn during the crises you faced . How do you think i should handle things as we have the pandemic unfolding . We have a great relationship when i see them regularly. David you are still, by my standards, very young. Youve been the ceo for five years, so you could do it for a while and still be young. Do you have any ambition to go into the federal office as a cabinet officer or anything like that . Mike no. David do you have other ambitions or is this what you like to do . Mike i love what i do. I love the company and the people i work with. I dont have any ambition other than doing a good job. David what do you do for relaxation . Mike generally anything that , involves family. I have four children and they are very active in outdoor activities. My wife is a good golfer, a good skier, so you will find me on a golf course, skiing, scuba diving, flyfishing with family when im not at work. David any of your children in the energy world . Mike no. Not even close. David are you a good golfer . There is a view that if you have a low handicap, thats not good for being a ceo because you are spending too much time on the golf course. I dont know whether that is fair or not. Are you a scratch handicap golfer . Mike far from it. My wife is almost a scratch handicap golfer. I caddied for her in big tournaments. Actually, sometimes we will take Vacation Days and carry her golf bags. That tells you who the better golfer is in my house. David large carbon Energy Companies seem to have a difficulty. Are they producing large amounts of Carbon Energy which people like to consume, or are they supposed to transition to being renewable Energy Companies . What are you doing to transition yourself a bit to be a Renewable Company . Mike we are focused on leveraging our strengths to deliver lower Carbon Energy to a growing world. What that means is, in the near term, we can find ways and are finding ways to reduce the Greenhouse Gas impact of the energy the world uses today. So we are reducing the emissions associated with oil and gas. That the world needs today and needs very desperately. And at the same time, we are building lower carbon energies for things like tomorrow. So things like Renewable Fuels, hydrogen, Carbon Capture and storage geothermal are all , technologies we are investing in, businesses we are growing that will play a bigger role tomorrow. We will need many solutions. There is no one solution for this. David in 2022, you bought a Renewable Energy company for roughly i think 3 billion . What was that about . Why did you want to do that . Mike we had a Renewable Fuels business ourselves. This company, Renewable Energy group, was one of the leading Energy Producers of biodiesel, soon to be Renewable Diesel in the United States, and they had have great capabilities in the fuel stock sourcing area. In any fuels business, Raw Materials are a very important part of the overall value chain, traditional petroleum products, we have deep expertise in raw material sourcing for that. And these products, you are talking about Raw Materials that are like used cooking oil, corn oil, various bean oils and cultural products, these are markets we dont have experience in, the quality, logistics, commercial dimensions of those, we think that rule energy is good at and manufacturing facilities, and marketing. We have big market positions and brand positions in states like california that encourage this so the combination makes it , powerful for Renewable Energy. David today in the renewable area, which is obviously a growth area, do you think that, if you were going to make acquisitions, without giving away inside information, you are likely to do more in the renewable area or in the carbon area . Mike its an active field of opportunity for both. In both. For us, its really driven by a strategy and asset quality, value, and the typical things you would look at when you do a deal. But as i said over the last two , years, we have done a big Traditional Energy deal and a big renewable acquisition. I think in the years ahead, we will probably do acquisition for both spaces. David when president nixon took office and shortly thereafter, there was an oil spill in santa barbara. Then under president obama, there was an oil spill in the gulf. I think it was british petroleum. Right now, when drilling offshore, how safe is it to be able to avoid the environmental damage . Is it much better than it used to be or are there greater precautions than there used to be . Mike absolutely, the industry has continued to improve the operating practices and the equipment. Certainly, the regulators in the u. S. Have high standards. We work closely with the regulators on that. And the advent of newer technologies have continually made this safer. So these are challenging, difficult operations and its pressure, water depths and environments, but the industry has a strong track record today and there have been some notable incidents over time but every company in the industry works really hard to prevent those. David today, do you not worry about that kind of offshore drilling problems anymore because the safety is pretty good compared to what it used to be . Mike every day i get up and worry about safety and protecting the environment. Our people work in a demanding business. Its a highly technical activity. We have very talented people. Weve got very strict protocols and standards to keep people safe and the environment safe, but you can never take it for granted. David why do you think it is that people love energy but dont love Energy Companies . In other words people in the , United States and around the world consume enormous amounts of oil and gas, and the people that provide it like chevron dont seem to be so popular, why is that . Mike i dont know exactly why it is. We are a big company, the numbers are big. Sometimes big is not popular. Big energy, big government, big tech, maybe big private equities are an exception to that, but we are big company and represent less than 2 of global oil production. In the scheme of things, it is a very competitive market. We are a relatively small player , and i think whats important to remember is we need to have a balanced approach to energy, and that means we have to focus on affordability because Affordable Energy is really essential for economic prosperity, reliable supply for National Security, because Energy Security and National Security are linked. And then protecting the environment. I think, as prices get high and it gets less affordable, you find people that are upset, and part of that is because we really havent necessarily been able to find the right balance among those three. David and, to improve the overall image of the Energy Industry is there something you , think the ceos of companies can do to improve so that people when they walk down the streets and say, chevron has done a great job for america . Is that possible or Energy Companies dont have that likely public image that will be so good . Mike i think what will help us to engage in a more balanced conversation about the benefits of energy. We have a lot of people that have views on what some of the consequences are of the use of energy. But as you say, theyve made advancements in the quality of life that we would not have imagined two centuries ago. And i think as we go forward, its absolutely likely that we find ways to meet the needs of a growing world and reduce the carbon impact. David lets suppose tomorrow you decide to retire and become a cabinet officer or do something else, what would you say you have achieved as the ceo of chevron that you are most proud of . Mike i would hope that people would say, he thought of others first, he strengthened the culture of our company, he kept people safe, and made the company a Better Company when he left than it was when he found it. Is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home james hardie collection. 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