• Well, good afternoon, everyone.

And welcome to the first Dean’s Speaker Series

of the academic year.

Our event today is co-sponsored by BERC,

which is the student led

Berkeley Energy and Resources Collaborative.

It’s the largest of its kind in the United States.

Anybody here who’s a member of BERC raise your hands.

Woohoo, woo.

So it’s also co-sponsored by the Energy Institute at Haas,

which brings together the largest concentration

of energy economists of any university in the country.

And we have a number of leaders from the Energy Institute,

you wanna stand up if you’re part of the Energy Institute.

Woohoo.

(audience applauds)

We are really fortunate to have this incredible resource

of research and relationships

and it really is important in helping government agencies

and companies at our school.

So I’m really excited to see you all here today,

and to welcome our guest, Pierre Breber.

We’re, especially delighted to host Pierre

because he’s coming back to his alma mater.

Pierre earned his bachelor’s. - Hey, go Bears.

• Go Bears.

(audience applauds)

Pierre earned both his bachelor’s and master’s degrees,

so you’re a double Bear,

in mechanical engineering here at UC Berkeley

in 1986 and 1987,

he then went on to earn his MBA from Cornell University

in 1989.

Today, Pierre serves as vice president

and chief financial officer of Chevron.

Pierre has more than 25 years of service at Chevron.

He started in 1989 as a financial analyst.

He’s held a wide variety of roles

throughout the organization.

Most recently, as EVP of downstream and chemicals

and also EVP of gas and midstream.

He’s held leadership positions,

both in the United States and globally abroad,

including in Asia and in Europe.

He also serves as chair of the board of directors

of United Way Bay Area.

And he’s a board member

of the Thurgood Marshall College Fund.

So Pierre, we are really, really glad to have you here

for this conversation, for this important conversation.

And we’re kicking off today,

the first of our Sustainable Futures Events

as part of our Dean’s Speaker Series.

We’ll be having a series of leaders,

both in the private sector, in business, and in government,

who will be coming to speak to us about sustainable futures.

So we created the Sustainable Futurist Track

here at Haas because we believe that developing

a sustainable climate resilient economy,

goes into every aspect of business,

whether it’s agriculture, real estate, energy, finance,

anything and everything will need to be reimagined

and redesigned to address the current

environmental, social and economic crises.

We really believe here at Haas

that addressing our climate crisis

and transition to a carbon free energy source

is an integral component of the world’s sustainable future.

Now the bad news is that even though so many companies

and so many governments have been making pledges

to reduce their emissions to net zero by 2030.

In fact, every year annual emissions of greenhouse gases

are still going up, not down.

We know from recent IPCC reports

that just stabilizing emissions isn’t enough,

we need to cut emissions to net zero by 2050.

But actually more urgently,

we need to cut them in half by 2030,

which is only eight years from now.

Now the good news is a lot can happen.

We already have a lot of the technologies that we need

and the cost of those technologies to cut emissions,

especially in renewable energy is really falling quickly.

Now climate change isn’t just about risk,

it’s also about incredible opportunities.

That low carbon transformation can lead to

better quality jobs,

it can lead to health benefits

as we reduce our pollution levels,

it can create many new and exciting companies,

which I really hope that Haas

and Berkeley students and faculty will be leaders in.

It can also help disadvantaged communities

and it can be a terrific investment opportunity.

So to ensure that we reach these goals

and this transformation,

we really need to have leaders

who can lead these transformations.

And although I’m very heartened to see

the recent legislation that was passed

by Biden’s Administration on climate change,

I personally believe that it is business

that is leading right now on climate and on sustainability.

So today’s conversation is one step,

one important step in this effort.

So we’re very, very grateful to Pierre

for being here with us today

so that we can have this important conversation

as we work to educate the next generation

of sustainability focused leaders.

So please join me again in welcoming Pierre Breber.

(audience applauds)

So the way we’re going to conduct this

is I’m going to ask a number of questions

for maybe about half an hour, 30 minutes,

and then you all will have a open Q&A

and you’ll have a chance to ask questions

that are on your mind.

So I’m just gonna start with my first question.

So you began your career as a financial analyst at Chevron,

and today you’re the CFO.

So tell us a little bit about this journey.

What are some of the experiences that shaped this journey

and what has really led you to stay

all these years at Chevron?

• Thanks Anne, thanks everyone for joining us.

Well, it started here, 40 years ago, hard to believe,

I was a freshman in the engineering school

and as a junior, a professor,

I took a class from a professor

and he invited me to work in his research lab

and he was doing combustion research.

So at an engine lab, ended up working with him,

ended up at Lawrence Berkeley Laboratory.

And really that’s when I was exposed to energy

and was fascinated by it.

As you said, I later went to Cornell and got an MBA

and I’m from this area,

my future wife is also from this area,

and wanna stay connected.

And so energy and the Bay Area really led me to Chevron.

And I’m really pleased that I’ve been able to have

the career at Chevron and keep connected to the Bay Area

and all the friends and family that we have here.

The third element really is being happy.

And I hope all of you find happiness

in your professional career,

you’ve invested a lot of time in your education,

and I’ve been happy for 33 years.

And so the first thing I’d point to is my ability,

I was able to balance work and life at Chevron.

It’s a value that the company respects and supports,

and as important as our professional life is,

it’s way more important that I’m a good father

to our three kids, a good husband to my wife of 26 years.

A son to my mother who lives not too far from here,

a brother to my three sisters and on and on.

So all the roles we play outside of work require time

and that balance and I’ve been able to maintain that,

and that’s part of what kept me at Chevron.

I did have professional growth

and so I’ve had new opportunities,

had a chance to live in different parts of the world,

all that was part of keeping me happy.

And then energy is intellectually challenging.

I read the Energy Institute’s Monday blogs every week,

it’s fascinating, to work in energy, the geopolitics,

the technology, obviously the environmental impacts,

the economic impacts,

the role it plays in the underlying economy.

So all those things is part of the reason

why I stayed at Chevron,

why I’m still happy and honored to be CFO.

• Thank you.

So, I mean, you’ve had so many different roles

and you’ve been there for a while

since you’ve finished your MBA.

How has your leadership style evolved

in taking on these larger and larger roles?

And one of the questions we’ve been asking our leaders

who come to this event is,

and did the pandemic really change how you yourself lead

at Chevron?

• Earlier in my career, feedback was really the key.

I came out of school and within a handful of years,

I’m leading people, and I thought I was a great leader,

of course I was.

And it turns out I had strengths,

but I had things that I could do better.

And having 360 confidential feedback early in my career,

relatively early in my career,

I learned that I need to listen more,

keep an open mind, slow down.

I was so focused on the task and getting stuff done,

not paying enough attention to relationships.

And by the way, that’s advice, that’s good for work,

it’s good for outside of work too, and your relationships.

And so that’s one early experience.

If I go about 10 years ago,

so the first 20 years of my career,

I was largely in finance and commercial roles.

And then in 2011,

I was asked to lead what we call our upstream,

it was oil and gas producing operations in Southeast Asia.

And I had never done those jobs, technically,

or operational jobs.

So I’m leading a big business,

multi-billion dollar business,

without having really have grown up in those kinds of roles.

And so what that taught me was really

how you have to trust and empower your teams.

And literally you have to,

because I didn’t have the foundation and the expertise,

but again, that’s something that translates now

that I’m back in finance, trusting teams, empowering them,

trusting your direct reports.

Obviously, makes their job more satisfying.

And it frees me up to balance work and life

and do some other things that only I can uniquely do

from my position.

In terms of COVID, you know,

it’s fairly recent and have been at it for a long time,

but clearly flexibility, we were talking a bit beforehand.

COVID has taught us that for our type of work,

at least, office work, it’s an activity, it’s not a place.

When I joined at Chevron, you showed up every day,

and eight to five, nine to five, whatever it was,

for a job you could do from your living room,

almost even back then, maybe not quite.

And so being much more flexible.

I think the next generation,

you all will be able to balance work and life much easier,

it’s still hard, right?

Two career couples, kids, whatever you have going on,

elderly parents, all the challenges that are out there,

but being flexible in where you do your work

gives you a much better chance of doing that.

And so I think we’ve just embraced that in Chevron Finance,

in particular, we’re focused on the work, not the workplace.

And we want to get our teams together

for this kind of events

where it’s really good to see everybody,

but there’s lots of things people can do remotely

and they should continue to do it that way.

• Oh, thanks so much.

I mean, the point about really trusting

and empowering your team,

that really, really resonates with me personally.

I mean, I have my chief operating officer

and chief strategy officer, Courtney Chandler,

sitting right there.

And I think I have learned so much

about the power of trusting and empowering others,

and the amazing things that she and her team

and the rest of them have been able to achieve

during this pandemic is amazing.

So one of the things that I’ve learned,

and that I’ve been really spending a lot of time on

as the dean here,

is what does it mean to create a sustainable education

for our students?

And one of the things we’ve decided

is that we’re not just trying to educate

the chief sustainability officer,

who will be over in this one office in the company

and will do whatever it takes.

What we’re trying to do is we’re moving towards

an education where students,

no matter what role they’re going to take in the company,

whatever role that is,

they will have a sustainable viewpoint

as they take on that task.

So I’m kind of wondering,

what do you think about that?

Is that the way you’re thinking about sustainability

in terms of your employees and your own role at Chevron?

• Absolutely, ESG, which really is probably what underpins

sustainability,

is a mega trend that has only accelerated.

And it reflects the interests of many of our investors

who of course want to save for retirement,

or teachers funds, or university endowments,

they want to grow their savings

and grow their wealth for some future expenditure.

And they want to also contribute to societies,

meeting objectives and making society better,

and the ability to do both.

And so that underpins our shareholders

and investors all across the market.

Our primary objective is to safely deliver

higher returns and lower carbon.

And it’s a simple message, higher returns, lower carbon.

And it’s meant to capture and balance

our fiduciary responsibility to our shareholders,

who are again, teachers and firefighters,

and folks saving for retirement.

And so they earn a good return on their investment.

And lower carbon is to do our part

to address the risk of climate change,

and society’s objectives to, as you said, Anne,

reduce emissions.

And so it’s central to our message to our investors,

and it’s central to our employees.

Every employee can connect to

how can I make this asset higher returns?

How can I lower costs or add revenue?

And every employee can do something to also lower the carbon

of whether it’s our traditional business

or our new energy business.

So it is something that our employees have rallied around.

It’s very clear and simple.

And as CFO, I spend a lot of time in this space

because probably the number one question,

I think we’ll get to this Anne,

and that Chevron shareholders have, or the market has,

is how does Chevron sustain higher returns

in a lower carbon future?

And so that’s a really important part of my job.

• We will definitely get to that question.

But let me ask you a little bit more about your role as CFO.

So in this role, you have wide responsibilities,

you oversee the tax, the treasury,

and the investor relations worldwide.

So Chevron’s in over 100 countries,

you’re one of the largest companies in the world.

What are some of the unique opportunities

that this role has afforded you?

And what are some of the challenges that you’ve faced?

• The global part of the company is something

that always appealed to me, it’s a big world out there.

And billions and billions of people

and all across the continents.

And I’ve been able travel to every continent,

I’ve lived in two other continents.

I’ve worked with people from all around the world.

And that’s part of what attracted me to energy

and attracted me to Chevron.

The reality is there’s a crisis somewhere in the world,

almost every single day, in Chevron,

just because there’s so many countries,

something is gonna happen, but trust and empower teams,

we have really good people locally,

that can manage that and do manage that.

So what is unique in terms of challenge

and opportunities for me is really this investor,

it’s what we call winning back investors.

So energy has underperformed the market

over the last 10 years.

It’s done pretty well the last year plus,

but if you look over 10 years,

it has underperformed the broader market.

And we have investors, large institutions

that owned more of our shares and that we have not

convinced them or shown them

that we can sustain higher returns in a lower carbon future.

And so that’s really what is the challenge,

but also the opportunity,

and a big part that’s unique to my role.

• So that actually brings me to my next question,

which is over these decades,

how have you seen attitudes towards the oil and gas industry

shift in part, in particular,

I guess the question is,

have you seen investors change their perception

of the oil and gas industry,

or are they changing their perceptions?

• Over 33 years, you see a lot.

And so we’ve seen the Asian crisis in the late ’90s,

when the economists said oil was never gonna become

more than $10 a barrel, you know, headline story,

to Beijing Olympics in 2008,

and oil goes over $140, to an economic crisis, in ‘08, ‘09,

and COVID.

I’ve seen technology change to where we can produce

oil and gas from areas we never thought we could.

We see it again, a lot around the geopolitics.

I mean, I’ll just step back and say,

experience is a really nice thing to have.

I mean, it’s wonderful to be young

and going to school and learning.

And again, that was 40 years ago for me now.

And one thing about having been around is you see a lot.

And so when COVID hit,

we were prepared and we knew what to do.

I called the two CFO predecessors

just to make sure I wasn’t missing anything,

but we had a playbook because we’d been through ‘08, ‘09,

for us, ‘14, ‘15 was another time when oil prices

decreased about 50%, almost overnight.

And so we knew what to do.

And so that’s comforting

because in what could be a stressful situation,

we knew what to do.

In terms of investors, again, in the 2000s,

it ran up along with oil prices,

and then there really are two big investors shifts.

And so if you go back about 10 years,

oil prices were $100 a barrel,

but investors started to decrease their weighting to energy,

primarily because they felt we were overinvesting.

And in hindsight, we were.

And the view at that time is that oil and gas was scarce,

we were running out of it and we needed to go

after higher cost supplies, and the market corrected,

and a lot of those investments were low return.

And prices sort of bounced back in ‘17, ‘18, ‘19,

that’s really when ESG became very mainstream.

And that’s when investors said,

okay, well, maybe you’re making money now,

but how do I know you can make that money again

in a lower carbon future?

So for sure, we’ve seen investor sentiment change

during the whole time.

But the last two moves have been again for the most part,

negative, and that’s why we’re trying to win them back.

And I feel we have actions and answers to both

why we’re much more disciplined with capital,

why we’ll generate higher returns,

and we have very clear strategies and actions,

how we’re part of a lower carbon future.

• So actually that brings me to my next question.

A lot of companies and individuals define sustainability

in a lot of different ways.

So I’d love for you to just give us kind of the big picture.

How does Chevron define sustainability

and you say you’re moving towards a low carbon future,

what kind of measures is Chevron putting in place

to meet those sustainability goals?

• Well, we put out a sustainability report,

I encourage anyone to read it.

If you think of ESG, lots of times, you know,

the S is really important,

there’s lots of things around diversity, inclusion,

and racial equity and all kinds of activities.

I’m on the Thurgood Marshall College Fund Board,

as we talked about,

and there’s important things in governance.

And then even within E, the environment,

there’s water issues, there’s biodiversity,

and local air pollution and others.

But it usually does for us become mostly about the E,

mostly about climate, which is very understandable.

So we have very clear guidance and targets in both areas.

The first is our traditional oil and gas business,

as you pointed out, demand for our products is growing,

it’s not decreasing.

And we need to meet that demand.

If we don’t, you know, prices will go really high

and that’s not good either.

But we want to meet that demand

at the lowest carbon possible.

So we’re a top quartile producer,

which means that 75% of the oil and gas

that’s produced in the world today

is produced with higher carbon intensity

than what we’re doing.

And then we have targets by 2028, to lower that further,

so we’ll be 35% lower by 2028 than 2016,

when the Paris Agreement was signed,

2028 is a second stock take period,

which is why we chose that.

We also have a net zero aspiration for our upstream,

our oil and gas production by 2050.

So that would take it further down from 2028 to zero

in 2050.

And then we have a metric that captures

the full value chain of emissions.

We call it portfolio carbon intensity

and includes scope one, two, and three,

for folks to understand that, it’s pretty complicated.

But the idea is that you wanna look at

the whole life cycle emissions.

And there’s some things,

that if you look at one piece of it, you say,

well, that’s lower carbon,

but then you have to look at well,

what is upstream and what is downstream of that?

And so we have a metric that captures all aspects

of our products through the life cycle.

And so that’s in the traditional business.

How do we make the traditional oil and gas business,

lower carbon?

And then if we go to new energies,

we have three business lines, renewable fuels,

hydrogen, carbon capture and storage.

We have very clear targets for all three,

100,000 barrels a day by 2030 in renewable fuels.

We just acquired a company called Renewable Energy Group,

it makes us the second largest biodiesel,

renewable diesel producer in the country,

the third largest in the world.

We have 150,000 tons per year of low carbon hydrogen

by 2030 and then 25 million tons of carbon capture

and storage.

So that’s guidance to 2030, it might go faster,

it might go slower.

And then again, it’s an energy transition.

We need to sync up supply and demand.

And depending on how things go,

we can do more traditional energy

or more new energies.

All three of those business lines have great promise.

They all have challenges, and I’m sure we’ll talk about ’em.

But of course, companies like Chevron

have to be part of the solution,

we have to do our part, and I think we are.

• Thanks. I’m I’m actually gonna ask you a question

about your acquisition of the Renewable Energy Group.

in just a second.

But I just wanna ask a question about carbon capture

and storage,

so we know, or we have the impression

that that’s a significant component of Chevron’s plan

for achieving net zero upstream emission goals.

Now, does Chevron see that as becoming commercially viable?

Because right now it’s operating at a pretty limited scale.

• So I’d say outside of wind and solar,

most things are nascent in terms of solutions,

and wind and solar works well

for lowering the carbon intensity of the grid,

it doesn’t help United Airlines

fly people across the country.

It doesn’t help cement manufacturing.

It doesn’t help heavy duty transport,

18 wheelers on the interstate.

So there’s a bunch of hard to abate sectors

where renewable fuels, hydrogen, carbon capture and offsets,

can be the solution.

So in terms of carbon capture and storage,

it’s not just for our own emissions.

Again, there’s industrial emitters

and coal’s still 25% of the US power grid, right?

Natural gas is 50% of the California power grid.

So there are gonna be CO2 emissions,

almost every net zero scenario has carbon capture storage

as one of the tools in the toolkit.

It’s starting from a small base,

but again, it’s making progress.

So I’ll give you a couple examples.

We operate one of the world’s largest

carbon capture and storage projects in Australia,

at a place called Gorgon,

up to 4 million tons per year.

We just acquired leases offshore, Texas,

this is the first lease in the United States

that is dedicated to storing CO2.

I mean, you need a place to put it,

there needs to be a regulatory framework,

you need to have leases for it.

It’s really the reverse of what we’ve done for years,

is take oil and gas out of the ground.

Now it’s putting CO2 back in.

We recently just were rewarded three leases in Australia,

same thing, land, or this is offshore,

dedicated to storing CO2 underground.

Again, when you store it, you’re storing it forever.

So it needs to be a certain kind of structure

that you put it into.

And then we’re working on reducing the technology

of capturing the carbon.

So CO2 comes out with steam, right, water, nitrogen.

It’s about 10% of what’s emitted.

Well, you don’t wanna inject the other 90%.

You want to capture that 10% and then store that.

But the cost of that needs to come down.

So we’re investing in companies like Svante

and Carbon Clean that are working on technologies

to lower the cost of capture.

And then we’re piloting their technology,

including in the Central Valley, near Bakersfield.

So we’re putting it in real life situations

and see how we can capture the carbon.

So again, 25 million tons is a lot.

I mean, that’s about the total emissions

of the state of New York.

So is it, you know, gigatons? No.

But it’s good progress if we get there by 2030.

• Thanks, Pierre, thanks for that.

So Pierre already knows this, but I’m gonna tell you all,

I’m gonna ask a couple of even tougher questions now.

And somehow I feel that I can do this

because as Pierre knows,

the reason that I was raised in the Bay Area,

is ‘cause my father took a job at Chevron 40 years ago

and we moved to Pinole, California.

And he went to the refinery every day as a researcher.

And so this debate that Pierre and I are having,

which might get a little more intense,

I used to have with my father at the dining room table

in Pinole for 15 years where his daughter would say,

daddy, how can you possibly be doing X?

And daddy would explain what he was doing.

But anyway, on that side note, here’s my next question,

so recent news has highlighted Chevron’s acquisition

of the Renewable Energy Group, which according to Chevron,

will enable the company to grow its

renewable fuels production capacity to 100,000 barrels a day

by 2030.

Yet, right now, as we know, Chevron’s oil production

is not just a 100,000, it’s 1.2 million barrels per day.

So how does the discrepancy between those two numbers

indicate that you really do have a solid base

for transitioning away from oil and gas

to clean energy in the future?

• A couple things, first, as I said,

we’re the second largest renewable diesel,

biodiesel producer in the country,

third largest in the world.

So it reflects that this is a nascent industry.

There are constraints on renewable fuels

because they come from land

and it competes with food sources.

The nice thing about Renewable Energy Group,

70% of its feed stock are waste oils.

So this is not soybean oil, it’s not competing with land.

So it’s taking used cooking oil, distillers’ corn oil,

beef tallow, and turning that into renewable diesel,

and then one day sustainable aviation fuel.

So there are limits on it,

but we’re working on other, cover crops.

So you could grow something in between productive land use.

Because we know there could be a food crisis

also happening right now.

And it’s also, it was close to zero

just a handful of years ago.

So this is a growing industry.

It addresses again, a hard to abate sector,

heavy duty transport, air transport, marine transport,

some rail transport.

There’s a lot of heavy duty transport

that is not gonna be electrified anytime soon

or possibly ever,

‘cause batteries are just too heavy for it.

Where renewable fuels and hydrogen,

which we can talk about too, can play a role.

So I wanna be clear and this is where

people can have different points of view.

We haven’t said we’re transitioning from one to the other,

we said, we’re gonna do both.

We’re gonna have a traditional business,

that is gonna be very low carbon,

but it’s gonna meet the demand that society has,

which we don’t know what that’s gonna be.

And then we’re gonna have faster growing,

new energy business.

And we don’t think we have to make a choice

of one or the other, we think we can do both.

And then depending on the pace of the energy transition,

the speed of the two and the size of the two may vary.

• Thanks.

So I’m just going to turn to the IPCC.

Now the IPCC states that emissions

from existing and currently planned fossil fuel projects

are more than the earth can support

to avoid the worst effects of climate change.

That same idea has been highlighted

by the International Energy Agency,

and a number of academics and environmentalists,

which means that nations around the world

need to stop approving new coal fired plants

or new oil and gas fields.

Now, how will Chevron take this information

into consideration as it looks to the future

for developing new drilling sites?

• Demand for our products is growing, not shrinking.

And that’s because it’s seven and a half billion people,

we’re going to 9 billion people,

hundreds of millions of people,

hopefully billions are gonna come out of poverty,

go to a higher standard of living,

get something closer to the standard of living that we have,

and that takes energy.

And again, wind and solar, there’s lots of renewable power,

but power is one part of the energy mix.

So we see a role for traditional oil and gas.

Now, again, I said, we’re top quartile,

we intend to go even better than that.

But also we’re 2% of the traditional oil and gas market.

And so we can grow and be most responsible on carbon,

the financially strongest,

technically have the best engineers like your dad

and others that we have, solve all the best problems.

If and when oil does decline,

I mean, it’s a big, big market.

And we were talking earlier,

there’s hundreds of operators of oil and gas fields

just here in California, thousands in the United States,

more if you go around the world,

having the most responsible companies

provide the traditional energy you need,

every IPCC scenario does have oil and gas in 2050,

you can get to net zero again, in other ways.

But there are just some hard to abate sectors

where you’re gonna have oil and gas,

even in the most aggressive scenarios.

And I think there’s a role

for the most responsible companies to play in that.

And again, we’re very clear, we’re gonna do both.

We’re gonna be a really strong,

responsible traditional energy provider,

and we intend to be a leading a new energy provider,

not in wind and solar, where we don’t have capability,

but in these businesses, renewable fuels,

hydrogen, carbon capture and storage,

where we have unique strengths, where we have capabilities,

where we have assets that we can leverage,

and where we have customers

who are looking for solutions.

Again, United Airlines, you know,

batteries don’t help United Airlines,

heavy duty transport, 18 wheelers,

batteries, EV, electrifying that is not a solution.

Those companies have serious climate commitments

and pledges too.

If they don’t work with us, with Chevron,

they’ll work with other companies, they’ll fund startups,

‘cause they are very serious about

addressing climate change too.

We wanna work with our customers

and help develop those low carbon solutions for them,

and meet the demand that exists, whatever it’s gonna be,

we don’t know what it is, but again,

Jason Bordoff of Columbia talks about

there’s a gap between ambition and where we are right now.

We need to be clear eye about where demand is,

where the world is with seven and a half billion people,

going to 9 billion people,

and we need to meet those energy demand needs,

and we need to do it in the most carbon inefficient way.

• Thank you.

I have one last question for Pierre,

and then I’m going to open it up to all of you,

and what we’re going to do after I ask my question

and Pierre gives me his thoughts,

we’re going to ask you to go to the mics in the room.

I see one right there in the back.

And if you have a question you wanna ask,

I ask that you identify yourself,

what your name is, what program you’re in

before you go ahead and ask the question,

and everything of course is being recorded.

So here’s my last question for you, Pierre.

Chevron is one of the largest backers

of the American Petroleum Institute, or API lobby group,

which has been characterized by some

as obstructing climate change initiatives,

including supporting the rollback of regulations

on methane emissions and lobbying against EV subsidies.

How does Chevron reconcile their commitment

to this low carbon future that you emphasize

with being a member of the API?

• The API does a lot more than lobbying,

it’s the standards group for environmental, safety,

methane control,

so it does a bunch of really important work

around our standards.

And it does lobby, it has a climate action program,

and I encourage you to read it, it’s pretty good.

Not all climate policy is good policy.

I think reading the Energy Institute’s blogs,

there are policies that are supported,

they’re efficient and effective,

and there are others that are less effective,

less efficient.

So it’s gonna be a lower carbon future,

that’s clear, how we get there,

what’s the best policy for that,

is something that I think reasonable people can debate.

And again, every Monday I enjoy reading it,

‘cause it’s really complex.

What are the trade offs on affordability, energy security?

Just this one on Tuesday, ‘cause it’s Labor Day,

on heat pumps, it sounds like a very simple decision.

And it turns out it’s really complex

because of the refrigerants and the greenhouse gas

heating from those refrigerants when it leaks.

And so it takes a lot of smart people

having really healthy discussions.

It’s complicated, we’re dealing with externalities,

that’s something that economics struggles with.

So we support a price on carbon,

the API supports the price on carbon,

but the reality is most of the policy

is really kind of picking winners and that can work,

but it can also have some unintended consequences.

• Thank you so much.

So we open the floor to questions.

And please do go back and read,

we’d like you to use the mic

so that those who are viewing this virtually

can hear the questions.

And we also ask that you identify yourself.

• Hi, my name is Julia, I’m a law student here.

You’ve talked a lot about reputation,

and the reputation of Chevron and the oil industry,

and how that’s important to your investors

and your financial future.

There was a study published in February of this year

in the journal, Plus One,

which is a very legitimate scientific journal,

that found that Chevron, Exxon, BP, and Shell,

used terms like climate, low-carbon, transition,

to talk about strategies for decarbonization

and how you are making actions on clean energy.

But in fact, you are not making

any of the capital investments on the scale that we need,

according to the IPCC,

and a massive majority of scientists around the globe.

And these scientists concluded that the transition

to clean energy business models

is not occurring since the magnitude of investments

and actions are not matching the discourse.

And I haven’t really heard anything from you

about actual, tangible actions that are happening.

And I’m kind of wondering, if you’re just here to launder

your reputation with this group of esteemed students

who are young and impressionable,

and they might make this transition, like the moderator has,

from questioning, to being bought into this system.

It is 122 degrees in the Central Valley right now,

there are records being broken.

I don’t know how you face your children at the dinner table

every night and tell them

what their future is gonna be like.

I am up every night terrified because of you,

and what you and your comrades are doing for this economy.

I don’t understand what purpose you have here

besides to launder your reputation.

• So is that the question?

• That is my question, why are you here?

Why are you here?

And what value is this actually serving

besides to get a bunch of people to buy into this future

you’re trying to sell us?

And we’re in the shadow of Richmond right now.

And there are health consequences in Richmond

that the black and brown communities are facing

because of pollution in this, I grew up here,

I am from here, Chevron has done nothing for me.

So why are you here?

• Thank you for your question, Pierre, please answer that.

• I was invited here and…

• [Julia] Why were you invited here?

• Please give him a chance to answer the question,

thank you for your question.

• There is more investment going into lower carbon

than in traditional energy.

If you look at the numbers, it’s like 700 billion,

a trillion dollars across the globe.

It’s almost all going into wind and solar,

some of it’s going into like Tesla and EVs.

A lot of the car companies are investing in that.

And traditional oil and gas is 300 to 400 billion globally.

Many experts are concerned

there’s not enough investment

going in traditional oil and gas.

There’s a crisis in Europe right now where natural gas

is costing 10 times what it is in this country,

where people can’t pay their utility bills

because it’s so expensive.

And that’s clearly exacerbated

by the Russia-Ukraine conflict,

but it’s also tied to an under investment.

And I understand the concerns that you’re expressing,

but if we just decrease supply, while demand is still there,

then all we do is make it unaffordable for people.

We can maybe view energy as something that we always have,

but billions of people on this planet

don’t have access to any energy.

I understand your points of view.

I don’t think I actually used the word reputation anywhere.

I think I refer to many actions and I won’t repeat ’em all,

we’re second largest renewable diesel, biodiesel producer.

We talked about, we’re doing carbon capture,

we’re taking real actions.

It’s an energy transition, it’s not a light switch.

It can’t happen overnight.

It’s a massive, I mean the policy support

and the investments that are being made

are absolutely massive, they’re unprecedented.

But the size of the energy system is underestimated by many,

and it’s understandable, you can’t all be experts on it,

but I’m here just to have a healthy discourse.

And I appreciate coming back to my alma mater

and we’re doing our part, we really are.

• I think the point from the API,

about supporting the API was pretty relevant

to what you just said.

The reason we’re in this position

and we have this reliance upon fossil fuels

is because of lobbying that your company has done

for the past 33 years with you involved.

As far as I’m concerned,

you should be tried for crimes against humanity

at The Hague, thank you very much.

• Thank you, thank you.

I mean, we are here to have a serious conversation,

so I appreciate, the next, let’s hear the next question.

• Yep, hey Pierre, PJ, second year MBA student,

also on the BERC executive team.

And I want to ask about your investments in carbon capture.

And I wanna ask because to the point

that the last question made.

We are moving late to prevent a climate crisis.

And a lot of that was because of lobbying done by the API

and effectively Chevron.

And so I do believe that Chevron

has a larger responsibility than almost anyone

to help invest in those types of technologies.

So within carbon capture specifically,

this is multi part.

You mentioned CCS,

and typically that’s put on an industrial source

of carbon emissions,

so like a natural gas power plant or an ethanol plant,

and those plants are still emitting net new carbon.

Are you investing in true carbon removal,

where you’re pulling carbon from the atmosphere

and putting it underground?

Second part, when you alluded to the storage of carbon

that you’re doing today, is that enhanced oil recovery,

or is that true carbon removal?

And then third, you mentioned, sorry,

I know this is multi part,

third, you said 25 million tons of CO2.

I agree that’s a lot,

but that’s not nearly on the scale that we need.

The National Academy of Science States

that we need to remove 10 gigatons,

10 billion tons annually by 2050.

And I would love to hear your thoughts

on how Chevron is gonna make that happen.

• So if you read Bill Gates’s book,

transportation is the fourth largest source

of greenhouse gases, right?

Industrial, power generation, agricultural land use,

and then transportation.

Turn every single vehicle,

light passenger vehicle on the planet, a billion of them,

turn ’em electric overnight,

power them all with wind and solar overnight,

and you’ve dealt with 10% of greenhouse gas emissions.

It’s a big complex world out there.

And to think that coal, by the way is again,

25% of the power grid here, 75% in China and India,

hundreds of millions of people

aspiring to a higher quality of life,

a life that we take for granted,

that’s not available to the vast majority of the people

on this planet.

So there are a lot of demands

that seven and a half billion people,

9 billion people require.

Food, let me just gimme one more data point.

So COVID, in the year 2020,

most of us didn’t leave our houses.

Demand for oil, went down 8%.

So that means just supplying, moving essential workers,

essential products, housing us, feeding us, that’s oil,

natural gas went down 1%,

‘cause that has other industrial applications.

So we didn’t even drive or fly or do anything

and there was barely demand.

So we require a lot of energy to support the system,

we’re providing that energy.

So I don’t accept your premise that we are causing this.

We are providing the energy that’s needed today

and we are providing the energy that’ll be needed tomorrow.

So on carbon capture.

• Really quickly, just to jump in,

I don’t think that you are causing this,

there is true demand for fossil fuel and you’re right,

we need to help developing nations achieve

poverty alleviation.

I think there’s absolutely a role for fossil fuel,

but we’re moving very late.

We could have been making this transition 10 years ago

and there was a political discourse in this country

and other places that denied climate change.

And a lot of that was actually funded by the API

and Chevron.

• So in 1986, I was here, I wrote a paper on climate change.

Climate change has been well known for 100 years

and the science has been,

we’ve never challenged the science.

So I don’t accept that.

Let me answer your specific questions on carbon cap,

no, it’s not for UOR.

Our project in Australia is taking CO2

and putting it in the ground.

Removing it from the atmosphere,

well, it gets into the atmosphere from emissions.

So I don’t see the distinction between direct air capture,

we are doing some stuff in direct air capture.

The challenge is when you’re trying to remove 400 PPM

versus 10%, it’s very dilute.

You’d rather go after the 10% concentration emissions

than the dilute 400 billion, 400 PPM

that’s in the general atmosphere.

There’s room for both.

And if there’s technology that can do it,

absolutely we’re gonna do it.

Did I miss one of your questions?

• [PJ] I asked about the scale of CCS.

• The scale, yeah.

Again, 25 million tons would more than offset ours.

It’s the size of the state of New York,

we’re just one company.

It’s gonna take a lot of smart people, a lot of you,

we talked about the climate solutions,

new program that a CAL’s gonna do,

there’s the climate school of Columbia.

Look, it’s gonna take a lot of smart people

working together to figure this out

and we’re doing our part.

• Thanks for your question, there’s a lot of questions.

A lot of you wanna ask questions.

So maybe you could try to make one question

so that the others behind you

get to ask their questions too,

and please identify yourself.

• Sure, thank you so much.

My name is (indistinct) from the MBA program

at Haas School of Business.

So I come from the conventional energy industry.

So I was a program engineer

and project engineer for Schlumberger.

So we have worked with the clients such as Chevron.

One thing I’d like to correct from the previous answer

in India, the coal,

it has been bought down from 75 to 55% right now.

So just wanted to point that out.

But my question is even Schlumberger,

as a traditional oil service provider company,

we have struggled with the transformation,

I think COVID has done some good steps in helping push

that on a faster track.

But as a service provider,

one of the struggles we face is that ultimately

any technology we pour our R&D money into,

we need client companies such as Chevron, BP, et cetera,

to actually be willing to purchase

and invest in those areas.

And that is one growth area within Schlumberger,

we have seen takeoff slower

than what we would’ve anticipated or liked

or what is necessary to meet the climate goals.

And I think some of the challenge comes from how you told

we need to convince our shareholders

for going for lower carbon energy.

And you mentioned that you guys are still figuring it out,

but I wanted to understand if there are any concrete plans

that you have to convince the shareholders

that this is the direction we need to move into.

Because I, for one, really understand

how big a role demand plays in having the transition happen

at a certain pace.

But what are some of the solid plans

that Chevron has in mind to convince the shareholders

about how we need to really pick up pace on this transition?

• Yeah, thanks for your question.

And I thought that number was current, but.

I think Anne said, everybody is working on this.

Last year, right around this time,

we did a full energy transition spotlight.

We only talked about our energy transition strategy.

So it’s something that is really essential

to winning back investors.

So, I think the investors that have left energy in part

have said, well, we don’t understand how you participate

in a lower carbon future.

And again, I don’t wanna repeat all the things

that I’ve already said to Anne,

but I think there are a lot of very specific actions

that reflect all the engineering capability.

We partner with Schlumberger on lots of things.

It’s gonna take a lot of talent, a lot of companies,

a lot of solutions.

If it was easy, it would’ve been done,

and wind and solar has worked really well.

Again, the scale is just massive.

It’s just that the power system is so big,

it takes that kind of investment.

And then that doesn’t really deal

with the other parts of the economy

that cannot be electrified, steel making, cement making,

off-road transport, like farm equipment,

mining equipment.

Think of all the mining that’ll have to happen

for all the EVs.

Well, how do you do all that?

Cement manufacturing, concrete, food production,

there’s all these other aspects of our modern lives

that require energy and many can’t be electrified,

and will require other solutions.

And we’re working on the solutions

and we’re making progress.

We’re going as fast as we can.

We’re one company working with many others.

• Thank you. - Thank you.

• Hey, my name’s Ethan Miller.

I’m a law student here at Berkeley

focusing on energy and environmental law.

I’m also the co-president

of the Energy and Resource Collaborative Here.

A note on that, I just wanna point out green hydrogen

does work for a majority of the applications

you just talked about, and Europe’s really focused on that.

So I’d like to hear more about that maybe at a later point.

But my question is from a legal perspective,

do you think Chevron has a responsibility

to pay reparations for some of its past actions?

And I’m happy to elaborate on why.

• No, no, I mean again, we all consume all these products.

If we’re gonna pay, then everyone has to pay,

because it’s essential to modern life.

And on green hydrogen,

we’re absolutely working on green hydrogen.

Again, I said, if you turned a billion cars to EV overnight

and electrified ’em all overnight,

which we don’t have that scale today,

you still have 90% of it.

So can we all claim all the wind, solar

just to make green hydrogen, which you’re right,

hydrogen can work for a lot of these heavy duty solutions,

that’s why we’re in it,

but there’s only also so much wind and solar.

So again, the scale of this is a big challenge,

but again, it’s also an opportunity as Anne said,

and it’s gonna take all kinds of smart people

working together in companies and capital

and the Energy Institute here,

all working together to solve this.

And we are making progress,

I don’t want this sense that we’re not making progress.

I disagree with.

It’s just a massive system and energy demand keeps growing

while we’re trying to make this transition.

• I appreciate that.

So I understand you don’t think you should pay reparations,

the courts might have a different view.

There was a 200 billion settlement

for the tobacco industry in the ’90s

following years of resistance from tobacco companies

and different courts as well.

Are you factoring that into your finances as the CFO

in case there is,

there’s a lot of litigation going on right now

that could lead to large settlements,

is that something you’re considering?

• We feel the cases are without merit

and we’ll just see where they progress.

• Thank you. - Thank you.

• We only have about four minutes left.

So to give the students a chance to

express their question,

let’s try to keep the question brief

after you identify yourself.

• I’ll be short.

Hi, my name is (indistinct),

I’m a first year MBA student here.

In my previous job, I worked as a ESG due diligence advisor,

helping a lot of the PE firms performing, you know,

analysis on recent opportunities

within the mergers and acquisition market.

And as we can see, like there’s a lot of shift

from the LPs that are focusing more on ESG topics,

but very unfortunately in the past six months,

you can clearly see a shift downward,

turning away from ESG topics

and labeling them as greenwashing.

And a lot of the bad words to it.

From my perspective,

I think all of those topics are really good and important,

but I can also see optically that is greenwashing topics.

So before we can prove that ESG topics,

especially environmental sustainability topics,

can be good for rate of return,

and then all those like profit.

What would you recommend on persuading businesses

in terms of like shifting towards

a more sustainability focused method of performing

and operating?

• So I think I said earlier to one of Anne’s questions,

ESG is a good thing, I mean, we all want to

save for retirement and make society better.

I think the moderation in ESG, I think ESG is a mega trend,

it’s gonna continue to grow.

It has moderated a little bit.

If you look to Larry Fink of BlackRock,

because it was putting in his words too much pressure

on the most responsible companies to decrease supply

while the demand was still growing.

And that creates a different dislocation in society.

If you can’t heat your home, if you can’t get food,

if you can’t, you know, all the things,

energy is so essential.

And so again, this transition has to be managed,

where supply demand move in sync.

And I think the ESG moderation that you’re seeing

is just saying, well, maybe we went a little too far,

but it’s still very strong

and it’s a top priority for investors and we support it.

It’s a good thing.

We should advance all kinds of

environmental, social and governance goals.

And we can do that while fulfilling

our fiduciary responsibility to our shareholders,

who are again, you know,

everyday people trying to save for retirement.

Thanks.

• Thank you.

• Hi, my name’s Charlie, I’m a student here,

I’m also working on a clean tech startup.

And I wanna ask you about low-carbon fuel standard programs.

They’re essentially a market based pricing scheme on carbon.

How has these programs in California and Washington

affected Chevron’s business model?

And do you foresee like a national low-carbon fuel standard

program being developed?

• I’m trying to be short in my answer.

Yeah, we operate in California,

we have the refinery in Richmond and down in LA,

we were part of the original greenhouse gas regulations

that Governor Schwarzenegger did.

We were part of bringing a coalition of moderate Democrats

and moderate Republicans to the extension of it

when Governor Brown extended LCFS and cap and trade

and all that, and we bought Renewable Energy Group

and that’s part of providing lower carbon fuels.

The state of Washington has done it,

the federal government has not,

but there’s something called the Renewable Fuel Standard,

which is primarily around ethanol,

but does have other encouragement,

other support, and the Inflation Reduction Act,

which Anne talked about, has made it so like,

sustainably, aviation fuel,

which wasn’t really included in that,

and the blender’s tax credit is down there.

So there is a lot of policy support in this space.

We absolutely can operate.

And again, in a state like California, that leads

on greenhouse gas regulations.

And Governor Brown was very clear,

California is 1% of greenhouse gas emissions,

we’re not gonna solve climate change,

but we can show with policy and technology,

the rest of the world, how to innovate,

and LCFS was one of it, California was the first,

and we operate in the environment

and we’ve done fine in the environment.

• Do you think it’s led to any specific,

like operational changes for Chevron?

• I think it’s led to what it was designed to do.

You’re having carb, you’re having Mary on,

I saw as a future, a good question for her,

but absolutely the carbon intensity of the fuels

that you consume here in California

is lower as a result of that.

Let me talk about sustainable aviation fuel, right?

Right now it’s a 100% conventional.

The European spec, the US doesn’t have a spec.

The first spec is 98/2, 98% conventional, 2% renewable.

Then 2025 is 95/5, 2 30 is 90/10, even 2050, it’s 50/50.

So it is a transition.

That’s a good analog on how you slowly kind of reduce carbon

because you’d like to do it faster,

there just aren’t solutions that can go faster

at this point in time.

• Thank you.

• I think we’re actually almost out of time.

So this’ll be the last question.

• Perfect.

Hi, my name is Alfredo Angulo.

I am a fourth year political science major.

I’m also a lifelong resident of Richmond,

where you have the second largest refinery

in the state of California,

as well as the second largest polluter

in the state of California.

The city of Richmond is one that experiences

amongst the worst rates of respiratory illnesses

in the nation.

And that’s largely attributed by scientists

to the existence of the Chevron refinery in Richmond,

and 100 years of fossil fuel operations in the city.

A couple years ago,

the Bay Area Air Quality Management District

passed a regulation called rule 65,

which required the refinery to largely reduce

particulate matter emissions by using technology

that has already been widely adopted by many refineries

on the West Coast.

And the Chevron Corporation sued the Air District

to block this regulation from taking place.

You’ve mentioned a couple times that one of your goals

is higher returns, lower carbon,

and this was a great opportunity

for the refinery to immediately,

or at least very quickly reduce carbon emissions

here at home.

And you guys fought that regulation.

So if you don’t want to reduce carbon emissions

here at home, where is it that you want to do so?

• Well, I don’t accept your premise

that Richmond causes those incidents.

I mean, there’s lots of other industrial activity.

We are heavily regulated.

Every air emission is closely monitored

and we comply with all of the standards.

The very specifics of that is a technical question.

It’s again, it’s not around carbon, it’s around particulate,

as you say, but it was really a mandated,

way, more expensive solution.

It goes back to you want to do this economically,

and we totally support reducing particulates,

we don’t support necessarily being told how to do it,

and that’s what we’ll see what the courts determine.

So we’ve been in Richmond a long time.

I’ve been there many times.

Where we are a constructive investor in that community.

United Way has got big facilities in there that help out.

We’re a big taxpayer,

we do our part to make that community better.

And I just don’t accept your premise,

but thanks for your question.

• So we are out of time.

This has been, I think the most dynamic

Dean’s Speaker Series that I have seen possibly

since I became dean four years ago.

So I wanna thank Pierre for his time today,

for voluntarily coming out here,

and for sharing his experience with the Haas students

and the community.

Students, we look forward to a sustainable future,

we need to think big.

Working on the biggest challenges,

with the biggest companies,

creating the biggest transformations.

We need your courage to engage

in this kind of transformational change

that will save our planet.

So on that note, I think we should all give Pierre

a big round of applause.

(audience applauds)