Hearing of the House Select Energy Independence and Global Warming Committee

Statement

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REP. JERRY MCNERNEY (D-CA): Thank you, Mr. Chairman.

I also want to thank the witnesses for joining us today on this critical topic. Particularly, I'd like to thank Mr. Robertson for coming here to represent Chevron, which is located in my congressional district in San Ramon, California.

While it's obvious that businesses must show profits and be accountable to their shareholders, we seem to have a perfect storm of factors that have led us to the topic we're considering today: record high oil prices, record high profits for oil companies and clear evidence that the Earth's atmosphere is warming. But I'm hopeful today's hearing will help us better understand exactly what the industry's perspective on these issues is.

And as someone with a background in renewable energy, I don't believe that the oil and natural gas companies should be at odds with the renewable industry. The two should work in concert, and that makes perfectly good business sense. But while petroleum resources are limited, renewable resources have the potential to address our nation's long-term energy needs. So by investing in renewable energy, oil and gas companies can look toward the future and can pioneer initiatives with your resources that will give us significant long- term dividends.

We know that progress is being made by companies such as Chevron, which is investing in energy efficiency, global -- geothermal, hydrogen and biofuels. This approach should be more widely adopted, in my opinion, and embraced across the board. The companies represented today have at their disposal the resources necessary to move forward to securing our nation's long-term energy future, and what we need now is a commitment and vision to make that happen.

Again, I look forward to your testimony and yield back to the chair.

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REP. MCNERNEY: Thank you, Mr. Chairman.

With varying degrees of emphasis, each of you have indicated that you have investments in renewable or energy-efficient technology. What I'd like to see is what your vision in the long term and the short term is of your company's makeup in relation to oil versus alternative new energy technologies, starting with Mr. Robertson.

MR. ROBERTSON: Well, our, you know, we are supportive of the data that was in the National Petroleum Council study that basically said that in 2030, 85 percent of the world's energy would still come from coal, oil and gas. So we think we're probably in a fossil fuel environment for some time. We are spending something like 2.5 -- we are going to spend $2.5 billion over the next two years in the area of renewables and energy efficiency. And I think the biggest opportunity -- we've been talking a lot about supply here, and I know the biggest opportunity for us, frankly, I think, as a country and maybe the world, is in energy efficiency and becoming more -- using energy more wisely.

So I think that, you know, the evidence from our company that goes around doing these projects with public agencies is that we can get 30 percent reduction in the use of energy from some of these projects. Our own evidence inside our company, we are now 27 percent more energy efficient than we were 15 years ago. So -- and most of that time, we were expecting oil to be $20 a barrel. So the opportunity for us all to become a whole lot more energy efficient -- frankly, I still think the number one issue, the number one thing that the -- and the Congress did some things in the last energy bill in terms of energy efficiency in appliance standards and those things, but I think in terms of leading the nation -- leading the nation to where it's becoming a set of energy savers and becoming a -- and this being a scarce resource, that's the biggest source of energy, as far as I'm concerned.

REP. MCNERNEY: Thank you, Mr. Robertson.

Mr. Hofmeister, do you think that we've reached the maximum output possible of oil in historical terms, and if so, do you believe that the Alaska and offshore resources would change that peak oil timing at all?

MR. HOFMEISTER: I do not subscribe at all to peak oil theory. I think it is a theory that is based upon very narrow assumptions. I think if you look at the National Petroleum Council study which has been referred to or other studies around the world, the idea of moving from 80 million, 85 million barrels of production today, which we do, to somewhere near 110, 115 million barrels a day is in the focus of most international oil companies, and do believe, and certainly Shell believes, that the world can produce significantly more oil than it does today, even while it focuses on other alternatives.

REP. MCNERNEY: So what's the bottleneck, then? Why are we such a logjam --

MR. HOFMEISTER: I think that's an excellent question. I think there are bottlenecks around the world, where, for example, within nations that are oil-exporting nations, where national oil companies dominate, access from international oil companies is limited in many cases. I think the United States is probably the world's best example of having lots of resources that are not permitted to be developed, and so we're not able to go into 85 percent of the Outer Continental Shelf, for example.

REP. MCNERNEY: So you don't think that the Hubbard's (sp) results are accurate or reflect reality?

MR. HOFMEISTER: Not at all. Because in addition to what I've described in terms of what's out there, that assumption -- that theory makes no remarks with respect to unconventional oil, such as oil sands or oil shale.

REP. MCNERNEY: What do you think the makeup of your company will be in terms of oil versus other alternatives?

MR. HOFMEISTER: Well, we were part and parcel of the National Petroleum Council study, as were other companies, and I subscribe to the outcomes of that study, that by 2030 we will still be dominantly a hydrocarbon economy.

REP. MCNERNEY: All right, I'm finished with my questions.

REP. MARKEY: The gentleman's time has expired.

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