Chevron Corp. CEO Mike Wirth urged President Biden on Tuesday to stop criticizing the oil and gas industry to score political points and instead work constructively with energy executives about how to deal with high commodity prices.
The letter from Wirth preceded a meeting scheduled on Thursday between oil and gas chiefs and the administration.
“As industry leaders, academic experts and numerous policymakers have pointed out, there are no easy fixes nor any short-term answers to the global supply and demand imbalances aggravated by Russia’s invasion of Ukraine,” Wirth wrote. “Addressing this situation requires thoughtful action and a willingness to work together, not political rhetoric.”
The Chevron chief said he was looking forward to meeting with Energy Secretary Jennifer Granholm “and am hopeful for a constructive conversation about actions to address both near-term issues and the longer-term stability of energy markets.”
Oil and gas production in 2021 was the highest in history, Wirth noted. And in 1Q2022, “our U.S. production was 1.2 million b/d, up 109,000 b/d from the same quarter a year earlier. In the Permian Basin alone, we expect production to approach 750,000 b/d by the end of the year, an increase of more than 15% from 2021.” Domestic refinery input also rose year/year.
Rhetoric ‘Not Beneficial’
“I want to be clear that Chevron shares your concerns over the higher prices that Americans are experiencing,” Wirth wrote. “And I assure you that Chevron is doing its part to help address these challenges by increasing capital expenditures to $18 billion in 2022, more than 50% higher than last year.
“Chevron and its 37,000 employees work every day to help provide the world with the energy it demands and to lift up the lives of billions of people who rely on these supplies. Notwithstanding these efforts, your administration has largely sought to criticize, and at times vilify, our industry. These actions are not beneficial to meeting the challenges we face and are not what the American people deserve.”
Today’s “geopolitical situation is contributing to this energy crisis,” he said, but “bringing prices down and increasing supply will require a change in approach. You have called on our industry to increase energy production. We agree. Let’s work together. The U.S. energy sector needs cooperation and support from your administration for our country to return to a path toward greater energy security, economic prosperity and environmental protection.”
The industry, said Wirth, needs “clarity and consistency on policy matters 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 both costs and benefits…
“Most importantly, we need an honest dialogue on how to best balance energy, economic and environmental objectives – one that recognizes our industry is a vital sector of the U.S. economy and is essential to our national security. We can only meet these challenges by working together.”
Wirth urged President Biden to send his senior advisers on Thursday to the roundtable with energy executives “so they too can engage in a robust conversation. Your ‘whole of government’ philosophy in addressing major issues should apply here too, as a comprehensive approach is best to address the energy needs of our nation and of our allies.”
America expects its leaders and industry “to address the challenges they are facing in a serious and resolute manner. We are a willing partner in that endeavor and trust your administration will be the same.”
Late Tuesday, when asked by a reporter about Wirth’s letter, President Biden called the Chevron chief “mildly sensitive…I didn’t know they’d get their feelings hurt that quickly…We need more refining capacity. This idea that they don’t have oil to drill and to bring up is simply not true. We ought to be able to work something out whereby they’re able to increase refining capacity and still not give up on transitioning to renewable energy.”