Chevron Balances Oil Growth With Push for Low-Carbon Energy

Despite strong momentum towards renewable and clean energy solutions, Chevron maintains the stance that oil and gas remain crucial components of the current energy landscape.

The energy firm's Chairman and CEO Mike Wirth recently emphasised its dual mandate in a series of interviews, including on CNBC’s Power Lunch with Brian Sullivan, where he said: “We have to meet the demands of the economy today, even as we invest in technologies for tomorrow.” 

This foundational strategy is integral to Chevron’s commitment to delivering stable and affordable energy while reducing carbon emissions across its operations, simultaneously channelling investments into emerging low-carbon technologies.

Meeting energy needs today while investing for tomorrow

Rising global energy demand is driven by various factors such as population growth, ongoing industrialisation and the increasing energy requirements of digital infrastructure.

By 2025, Chevron anticipates producing one million barrels of oil equivalent daily in the Permian Basin in the US.

Additionally, it is working on new projects in the US Gulf of Mexico and preparing for the first oil production at the Future Growth Project in Tengiz, Kazakhstan.

Mike went on to tell Sullivan: “We don’t control demand, we supply demand. And so, we will grow our oil and gas business over the next five years.”

Beyond expanding its oil and gas operations, Chevron is ramping up investments in reducing emissions from its existing operations and fostering the growth of new energy technologies.

“We need to reduce the emissions from traditional energy, which we’re doing by reducing our carbon intensity of oil and gas that we produce today,” added Mike. “At the same time, we’re investing in new technologies to grow new sources of supply as demand for all forms of energy continues to grow.”

Why this balance matters

Energy demand reached record levels last year, and the expectation is that will peak even higher this year, as noted by Chevron.

Despite a global shift towards cleaner alternatives, oil and gas are projected to remain significant contributors to the world's energy portfolio until 2050, according to multiple future scenarios outlined by the IEA, OPEC, EIA and others.

Sustaining energy security alongside emission reductions is viewed as essential.

Chevron is advancing on several fronts to lower carbon emissions, including targeting methane reductions, scaling its renewable fuels production as the second-largest player in the US and developing hydrogen projects for energy storage at utility and industrial scales.

Pragmatic policy supportive of multiple pathways is deemed crucial by Mike.

“There are three things that really matter when you talk about energy: affordability, reliability and the environment,” he said during an interview with Daniel Yergin, Vice Chairman of S&P Global. 

“If you have an energy policy that focuses on only one of those, you can create unintended consequences and have something that is not sustainable.”

Just as important are scalability and speed: “If we can’t scale them up, they can’t make a difference." 

He continued: “If you get solutions that work on scale, we need to do it with some speed and that’s where capital markets come in and you harness private investment.

“If you start to rule parts of the solution out, you’re never going to solve the problem. And so, we need to rule things in.”

The clean energy transition

Chevron underscores the importance of engaging with both its traditional oil and gas operations and the clean energy sector.

“We have to be able to do both,” said Mike, speaking at the Wall Street Journal’s CEO Summit.

“One of the big challenges for an energy company like ours is we’ve got a big business today that meets the needs of the world, and we’ve got customers and economies around the world that depend on what we do to keep the lights on and the trains going.”

Natural gas is identified as a cornerstone for creating an affordable, reliable and lower-carbon energy system, underpinning numerous industries and electricity generation.

With US electricity consumption set to reach unprecedented heights by 2025-2026, complemented by a global rise through 2026, gas-fired generation offers crucial dispatchable capacity needed to integrate more renewable energy.

Chevron is expanding its footprint in the global gas market to satisfy these growing needs.

“If you think of the global energy system, it’s a key component,” says Brian Essner, Chevron’s General Manager of LNG Origination & Commercial.

“When there’s a failure or a change in how energy is provided to consumers, natural gas has the scale and is flexible enough to fill that gap.”

Freeman Shaheen, President of Chevron Global Gas, says: “Natural gas is a long-term enabler of progress. Chevron is proud to be delivering the energy the world needs today, while helping to shape the system that will fuel tomorrow.”

This strategy mirrors Chevron's balanced approach to sustainability, aimed at broadening reliable energy supplies, reducing carbon intensity and investing in scalable low-carbon technologies such as renewable fuels, hydrogen and advanced energy storage.

The model is designed to cater to current energy needs while simultaneously enabling a shift towards a lower-emission world.