Its also my filing system. Over much of the past three decades i have been an investor. The highest calling of mankind, i have often thought was private equity. Then i started interviewing. I watch your interviews so now i know how to do interviews. I have learned how leaders make it to the top. I asked him how much he wanted, i said to 50. I didnt negotiate. I did know due diligence. I have something i would like to sell. And how they stay there. You dont feel inadequate now being the second wealthiest man in the world, right . [laughter] about 40 years ago, a Young College graduate, mike werth, joined chevron, then and now, one of the Largest Technology companies in the world. Today he is ceo, dealing with a lot of issues, including Renewable Energy. I sat down with mike to talk about what it is 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, Carbon Energy companies are doing quite well, they have record profits, record revenues. As a result, some people in the white house and other places have suggested a windfall profits tax. Is the industry in such great shape that it can afford that . Mike we see prices go up and we see prices go down. Here windfall profit tax will not encourage more supply, its not likely to reduce prices, in fact it could do the opposite. President carter tried it windfall profits tax in 1980. It was rescinded several years later and collected a lot less revenue than was expected and, it didnt result in more investment, it resulted in less investment production. Normally if you work to lessen something, you. Put a tax on something. If you want less smoking, you put a tax on cigarettes. If you want to bring prices down, putting taxes and Energy Production is probably not a good idea. David in your current job, do you have to go to washington to talk to regulators . Do you find that an uplifting experience . Mike uplifting is not the first word that comes to mind. There are detailed discussions and we need to help regulators understand the potential consequences of some of the things they consider. David would you say that washington wire large doesnt really understand the economics of the Energy Industry or they could learn a bit more than they know now . Mike i have empathy for the 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. So i view my job to come in and provide objective input and help them understand the consequences of the things they are considering to avoid unintended consequences and help achieve the goals they are looking to achieve. David when the president says Energy Companies are gouging the american people, you get to be used to this when you ur energy executive, more or less, i assume . Mike you dont like it, but you are more accepting . Mike i disagree. I dont think it is accurate. We are an industry of price takers, not price makers. These are global commodity markets. Prices go up, prices come down. We allocate billions of dollars of capital every year. Two years ago we were losing billions of dollars as prices plummeted. So through the cycle, its an industry that generates the kind of 10 ish returns on capital employed, which is, i think by the standards of many other industries, pretty modest return. David the war in ukraine has driven oil prices up, i think thats fair to say. You think that is a reason why Energy Companies are doing well because supply has been reduced, because of the war in ukraine. Do you think when the war and is, it will have an impact on reducing Energy Prices in carbon areas . Mike the war and the associative 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 wells and start producing because there was no place to store the oil that was not needed by the market. Investment levels came down. And nobody knew how long this would last. As the economy recovered, postpandemic, we had vaccines, 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 eventually it is resolved, and all conflicts eventually are resolved, i think that uncertainty and the risk to supply from one of the Worlds Largest suppliers will be reduced and i think we will see markets reflect that. David a number of years ago, where prices were 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 either lets say in alaska the north sea other places, liquids we need the oil at 70 a barrel to make drilling affordable. Our people now drooling in Major Projects around the world to get oil that is going to take four or five or 10 years to drill . Or is that not happening again . Mike we are seeing some of that happen again. What has changed in the last decade is what were are seeing in the u. S. In the Permian Basin and also parts of countries now, the ability to produce oil and gas from rock that is very, very dense, very hard, and historically hasnt been very productive. But with Directional Drilling and the ability to capture his formations now, we are seeing the ability to produce from areas that we couldnt before and at prices that are lower than some of these very complex, difficult projects. So the need for the arctic has been reduced, as we see these other resources come in at a lower cost. David so how many employees does chevron have . Mike about 36,000 in 100 different countries. David and how much oil do you produce a day . Mike a little bit over 3 Million Barrels of Oil Equivalent per day. So, mostly oil, some gas, and we convert the units on the grass to give either equivalent, about 3 Million Barrels a day. David the United States produces 10 Million Barrels a day or Something Like that. So you are producing 25 of the oil produced in the United States . Mike as a company, our u. S. Production is about 1. 2 Million Barrels a day, so we are less than 10 of u. S. Production. David so right now the United States is more or less energy sufficient, compared to the 1960s or 70s when we imported a lot of oil. We consume 10 to 12 Million Barrels a day . Mike closer 2020. David and we produce roughly 12 million . So we are importing the equivalent of 8 Million Barrels a day, which is better than it used to do. Where are we importing that from . Opec countries . Mike canada, our neighbors are the largest suppliers of oil. You have heard about the keystone pipeline. We are a big customer of canada who is a Large Resource country right now. David how do you get the oil down . Mike there are other pipelines that have been built. Sometimes it flows by rail, sometimes by shape. You can bring down through pipelines into ports along the west coast, were into the atlantic and bring it by shape. Canada is the largest supplier, and that other people in the region and we still bring some oil from the middle east, but much less than we did back then. David you think there is more oil to be found in the lower 48 at this point, or in alaska, or we mostly know where all the oil is and there is no big Permian Basin deposits anywhere . Mike people have said that over time and i 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 recovery things. That is a story of shale. The other one that continues to be a positive story is the deepwater gulf of mexico where we go out and drew a mile or more of water depth and go down 6, 7, 8 miles into the earth and find large fields. The gulf of mexico is still underexplored compared to the onshore. So i think there is still room for more discoveries. David so when you started four years ago, to say, i might be the ceo someday . Where did you think that was unrealistic . Mike i just hoped i would last the next two weeks to get my next paycheck. David lets talk about chevron itself. What are the roots of chevron . When was it created and when did it start . Mike founded in 1879 in southern california, again is a Company CalledPacific Coast oil company. Made the first commercial discovery in california 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 and home has always been in california. We have been around for 143 euros and really a part of the world history. We made the first discovery in the middle east, first discovery of oil in saudi arabia among other milestones. The history of the world is really reflected in our company. David if i want to get gasoline from a car, is there a difference between oil that chevron might produce the outlays in the gasoline, and one of your competitors, or is gasoline pretty much are the same . Mike there are specifications, minimum standards that have to be met. What you find is that Different Companies either exceed those by more or less than others and also, we have special additives. We have a wholly owned Additive Company that manufacture is an manufacturers of additive called techron that has a very special chemistry to keep engine parts clean. As engines get more sophisticated, as the tolerances get thinner, you can have carbon deposits that affect performance in your cylinders, your injectors. David if you are driving and you need gas, will you stop at an actual station or keep going until you see a chevron station . Mike keep going until i see a chevron station. David how does one become the ceo of chevron . Tell us, where were you born . Mike in los alamos, new mexico. My dad worked at the national lab, and i grew up in golden, colorado. David and you went to college where . Mike university of boulder. I started chemical engineering. David you said you would like 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, found the work and the people interesting. And had an offer to come to the west coast and work for standard oil of california. It looked like a fun place to live and a place where i could do interesting work basically this is your employer since you graduated from college . Mike for 40 years. David when you started four years ago, to say i might be the ceo someday, or you do not think that was realistic . Mike just hoped it would last the next two weeks to get my next paycheck. That was never the game plan. David to move around the world over the course of your 40 years at chevron . What to do to rise up . Were you and operations, exploration or administrative person . Mike i started out as a design engineer and worked on oil projects. So, an oil shale project, not the kind we develop today, but the kind used to hear about. Built a plant that you can find any trace of today. Worked on a facility in california to help bring in oil from offshore, sold for pennies on the dollar. Eventually, a project in africa that never happened because of the civil war. So i began by specializing spectacularly in and successful 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 wouldnt leak. You and i remember the old wheels that would spin around on the gasoline pump. I used to put in the electronic first pumps back in the day so. These were smaller projects. But i could see the beginning in the end. I started to understand the commerce and how the business work. From there, a variety of rarely operating roles across different businesses and around the world. David when did you become ceo . Mike five years ago, 2018. David some might say that god looks favorably upon the ceos of Energy Companies because he lets them live a long time, and a number of your predecessors have lived quite a while. Do any of them call you with advice all the time . Mike i am really fortunate, david. Three people have done my job immediately proceeding me, each roughly a decade, live within a few miles of where i live. I see them regularly. I see them for lunch. David that is a plus. Do they tell you are doing this wrong or that wrong, does that ever come up . Mike i get a lot of good advice. You asked about advice, these are people who have done my job. I am interested in your advice. They have lived through wars the fall of the soviet union, terrorist attacks, financial crises. They have seen oil markets go through generations. They have dealt with geopolitical surprises. The first thing i did after cliffords call each one of them and say, what lessons have you learned in the crises you faced. How do you think i should handle things as we have this pandemic unfolding. So we have a great relationship and i see them regularly. David you are still, by my standards, very young. You have been ceo for five years. You could do it for a while and still be young. Do you have ambition to go into the federal government as a cabinet officer . Mike no. David anything other than the Energy Industry, or is this all that you want to do . Mike i love the company i work for in the people i work with. I dont have any ambition to do anything other than a good job. David what do you do for relaxation . Mike generally anything that involves family. I have four children, they are very active in outdoor activities. My wife is a good golfer, good skier. So you will find me on a golf course, skiing, scuba diving and fishing with family when i am not at work. David any of your children in the energy world . Mike no, not even close. David so you are a good golfer. I assume if you have a low handicap, that is not good because you are spending too much time at the golf course. Are you a scratch handicap golfer . Mike far from it. My wife is almost a scratch handicap golfer. I caddy her in big tournaments. Sometimes i will take a couple of Vacation Days and carry her golf bags. That tells you who the better golfer is in my family. Get help reaching your goals with j. P. Morgan wealth plan, a digital money coach in the chase mobile® app. Use it to set and track your goals, big and small. And see how changes you make today. Could help put them within reach. From your first big move to retiring poolside and the other goals along the way. Wealth plan can help get you there. J. P. Morgan wealth management. When you automate sales tax with avalara, you dont have to worry about things like changing tax rates or filing returns. Avalarahhh ahhh is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. David large Carbon Energy companies, seem to me, 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 . And what are you doing, for example, 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. That means, in the near term, we 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 needs very desperately. At the are building inherently lower Carbon Energy businesses for tomorrow. Things like Renewable Fuels, hydrogen, Carbon Capture and storage, geothermal, are all technologies we are investing. There is no one solution for this david in 2022, you build a Renewable Energy company for roughly, i think 3 billion. 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 producers of biodiesel and soontobe Renewable Diesel in the United States. They have great capabilities in the feedstock sourcing area. So in any fuels business, Raw Materials are a very important part of the overall value chain. Traditional petroleum products, we have deep expertise in the Raw Materials sourcing of that good in these products, youre talking