david: this is my kitchen table and also my filing system.

over much of the past three decades, i have been an investor. [applause] the highest calling of mankind i have often thought was private equity. [laughter] and then i started interviewing. i learned from doing my interviews how leaders make it to the top. >> i asked him how much he wanted. he said 250. i said fine. i do not negotiate with them. i did no due diligence. david: i have something i would like to sell. and how they stay there. you don't feel inadequate being only the second wealthiest man in the world? is that right? [laughter] david: about 40 years ago, a young college graduate joined chevron, then and now one of the largest energy companies in the world. today, mike wirth is the ceo of chevron and dealing with the multiple energies energy companies have to deal with today, including renewable energy. i sat down with him 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 or carbon energy companies are doing quite well. they have record profits, record revenues. and as a result of that, some people in the white house and other places have suggested a windfall profits tax. so, is the industry in such great shape it can afford that? mike: well, it is a cyclical industry, david. we see prices go up. we see prices go down. a windfall profits tax is not going to encourage more supply. it's not likely to reduce prices. in fact, it can do quite the opposite. president jimmy carter tried a windfall profits tax in 1980. it was rescinded several years later and collected less revenue than was expected, and didn't result in more investment. it resulted in less investment and less production. normally, if you want less of something, you tend to put more taxes on it. if you want less smoking, you tax cigarettes. if we want more energy production, putting taxes on

energy production is probably not a good idea. david: in your current job, do you have to go to washington to talk to legislators and regulators and do you find that an uplifting experience? mike: uplifting is probably 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, by and large, doesn't understand the economics of the energy industry, or they could learn a little bit more than they know now? mike: well, i have empathy for people who sit in these roles. they often have broad responsibilities and they may not have personal expertise and depth in some of the areas they are responsible for. my job is to come in and try to provide objective input and help them understand the consequences of things they are considering to avoid unintended consequences and help achieve the goals they are looking to achieve. david: so, when the president

says energy companies are gouging the american people, you get used to this when you are an energy executive more or less, i assume. you don't like it, but you're probably accepting of it? mike: i disagree with that characterization. i don't think that is accurate. we are an industry of price makers, global commodity markets. prices go up and prices come down. we allocate billions of dollars, our company does, every year. just two years ago we were losing billions of dollars as prices plummeted. through the cycle, it is an industry that generates 10%-ish returns on capital deployed. which is, i think by the standards of many other industries, that is a pretty modest return. david: the war in ukraine has driven oil prices up, i think it is fair to say. do you think that is a principal reason the major energy

companies are doing quite well, because the supply has been reduced because of the war in ukraine? and do you think when that war does end, eventually it will, i assume -- it will have an impact on reducing energy prices in the carbon areas? mike: the war and the associated 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 stop producing because there was no place to store the oil that wasn't needed by the market. so investment levels came down. and nobody knew how long this would last. as the economy recovered, post the pandemic, 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 of the risk of supply from one of the world's largest suppliers will be reduced, and i think we will see markets reflect that. david: a number of years ago, oil prices went as low as i think $20 a barrel. and when it was that low, major companies like chevron and others said we can't afford to drill anymore in alaska, the north sea, other places, because we need to have oil at $70 a barrel to make drilling affordable and profitable. as that comes back up, are people now drilling major projects around the world to get oil that will take five or 10 years to build? or is that not happening again? mike: we are seeing some of that happen again, certainly. what has really changed in the last decade, david, is what we see in the u.s. and the permian basin, and in other parts of this country and in other countries now, is the ability to

produce oil and gas from a rock that is very dense, very hard, and, historically, has not been very productive. but with directional drilling and the ability to fracture these formations now, we are seeing the ability to produce from areas that we couldn't before and at prices that are lower than some of these complex, difficult projects. and so the need for the ultradeep water, the arctic has been reduced as we see these other resources come in at a lower cost. david: how many employees does chevron have? mike: about 36,000, in about 100 different countries. david: how much oil do you produce a day? mike: a little bit over 3 million barrels equivalent per day. mostly oil, some gas. we convert the units on the gas to give you the energy equivalent. so about 3 million barrels a day. david: the u.s. produces 10 million barrels a day or something like that?

mike: closer to 12. david: ok, so you are producing about 25% of the oil produced in the united states, more or less? mike: as a company, you could say that. 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 1960's or 1970's when we imported a lot of oil. i think we produce and probably consume 10 million barrels to 12 million barrels a day. mike: closer to 20. david: we consume 20 million barrels a day. so we are importing the equivalent of about 8 million barrels a day, which is better than it used to be. where are we importing those from? mike: canada. our neighbors are the largest suppliers of oil. remember all of the controversy around the keystone pipeline. we are a big customer of canada, who is a large resource country. david: how do you get that oil here? mike: there are other pipelines that have been built in years gone by and sometimes it flows

by rail. and some of it comes by ship. you can bring it down through pipelines and ports on the west coast and the atlantic and bring it by ship. so, canada is a large supplier and we still bring some oil to this country from the middle east, but much less than we did. david: now, is there much oil to be found in the lower 48? let's say alaska as well. or we mostly know where all the oil is, and there's no more big permian basin kind of deposits anywhere? mike: people have said that over time, and then we have always been surprised. and so, 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 recover things that you haven't been able to before. that is the story of shale. the other one that continues to be a positive story is deepwater gulf of mexico. where we will go out drill in a mile or more of water depth and

go down 6, 7, 8 miles into the earth and find large fields. and the gulf of mexico is still relatively underexplored , compared to the onshore. i think there is still room for more discoveries. david: so when you're starting 40 years ago, do you say someday i might be the ceo sunday, or did you not think that was not realistic? mike: no, i just hoped i would last the next two weeks to get my next paycheck. that was never any game plan. ♪

david: let's talk about chevron itself. when was chevron created? mike: founded in 1879 in southern california as a company called pacific coast oil company. made the first commercial discovery in california, in pico canyon in southern california. became part of the rockefeller's standard oil trust in the latter part of the 1800's, and then became standard oil california when the standard oil trust was broken up. our headquarters and home has always been in california. we've been around for 143 years and really a part of the world's history. we made the first discovery in the middle east, first discovery of oil in saudi arabia, among other milestones.

a long history of the world really reflected in our company. david: if i go to a gas station and want to get gasoline for my car, is there really a difference between the oil that chevron may have produced, is that gasoline pretty much all the same? mike: there are specifications, minimum standards that have to be met from products. -- for products. then, 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 manufactures an additive called techron to keep engine parts clean. as engines get more sophisticated, you can have carbon deposits that can affect performance in your cylinders, your injectors. techron cleans that up better than others. david: if you are driving along and you need gas, will you stop at an exxon station or do you

keep going to a chevron station? mike: keep going to a chevron station. david: let's talk about your own background. how does one become the ceo of chevron? tell us, where were you born? mike: i was born in los alamos, in new mexico. i grew up in colorado. golden, colorado. david: you went to college where? mike: the university of colorado in boulder, colorado and studied chemical engineering. david: and you said, i want 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 and found the work and the people interesting. i had an offer to come to the west coast to work for standard of california and it looked like a fun place to live, and a place where i could do interesting work. david: so basically this is your only employer since you graduated from college? more or less? mike: for 40 years, the only employer. david: when you started there, 40 years ago, did you say i

might be the ceo someday? or was that not realistic? mike: i just hoped i would last the next two weeks to get my next paycheck. that was never in the game plan. david: did you move around the world over the course of your career? what did you do to rise up? were you an operations person, an exploration or administrative person? mike: i started as a design engineer and worked on big projects. so, an oil shale project, not that type we do today, but the other kind you used to hear about, built a plant that you can't find any trace of today. worked on a facility in california to help bring in oil from offshore. sold it for pennies on the dollar eventually. a project in africa that never happened because of a civil war. so, i began by specializing in spectacularly unsuccessful projects. and at some point i said, this doesn't look like a great career path. so, i moved into our marketing business, where i built gas stations and replaced underground tanks made of steel

with ones that were made of fiberglass so they would not leak. you and i remember the old clickety-clackity wheels that would spin around on the gas pump. i used to put in the first electronic pumps back in the day. there were small projects, but i could see the beginning of the end. i start to understand how the commerce and how the business worked, then a variety of roles, primarily operating roles across different businesses and around the world. david: when did you become the ceo? mike: five years ago, in 2018. david: some would say god looks favorably on the ceos of energy companies because he lets them live for a long time, and a number of your predecessors have lived quite a while and some in the same area you live in now. do they call you with advice all the time? mike: i'm really fortunate, the three people who have done my job immediately preceding me, each for roughly a decade. the 1990's, the 2000's, and the

2010's live within a few miles of where i live. i see them regularly. we have lunch together. david: that is a plus. do they tell you you are doing this wrong or that wrong? that does not come up? mike: i get a lot of good advice. you asked earlier about advice, these are people who have actually done my job, so i am interested in their advice. they have lived through wars, the fall of the soviet union, terrorist attacks, financial crises. they've seen oil markets go through gyrations. they have dealt with geopolitical surprises. and so, their advice is really valuable. during covid, the first thing i did was call each of them and say, what lessons did you learn during the crises you faced and 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: so, you are still, by my standards, very young, and you could still be see over five years -- ceo for five years and

still be young. do you have any ambition to go into the federal government as a cabinet officer or anything like that? mike: no. david: and to do anything other than this industry, other career ambitions, or this is what you want to do? mike: i love what i do and the people i work with. i don't have any ambition to do anything other than a good job. david: what do you do for relaxation? mike: generally, anything that involves family. so, i have four children. they are very active in outdoor activities. my wife is a good golfer and a good skier. so, you will find me on the golf course, skiing, scuba diving, flyfishing with family when i am not at work. david: and any of your children in the energy world? mike: no, not even close. david: so, are you a good golfer? there is a view that if you have a low handicap, that is not good for a ceo because that means you're spending too much time on the golf course. i don't know if that is fair or not. are you a scratch handicap golfer? mike: far from it. my wife is. i caddy for her in big tournaments. sometimes we will take a couple of vacation days and i carry her golf bags. that tells you who the better golfer is in our house.

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david: large carbon energy companies seem to be having difficulty. are they producing large amounts of carbon energy, which people like to consume, or are they supposed to transition to the renewable energy companies? what are you doing to transition yourself a bit to be a renewable company? mike: well, we are focusing our strengths to deliver lower carbon energy to a growing world. what that means is, 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, very desperately. and at the same time, we are building new, inherently lower carbon energy businesses for tomorrow. so things like renewable fuels, hydrogen, carbon capture and storage, geothermal, are all technologies we are investing in, businesses we are growing that will play a bigger role tomorrow. there are many solutions. there is no one solution for this. david: so, in 2022, you bought a renewable energy company for roughly, i think, $3 billion. what was that about? 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 soon to be renewable diesel in the united states. and they have great capabilities in the feedstock sourcing area. and 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 raw material sourcing for that. in these products, you are talking about materials like used cooking oil, distillers corn oil, various bean oils, other agricultural products. these are markets we don't have a lot of experience in. the quality, logistics, commercial dimensions of those markets are things that the renewable energy group is good at. they had manufacturing facilities and marketing -- we have big market positions and brand positions, particularly in states like california that encourage this. the combination makes a more powerful renewable energy business. david: so today, in the renewable area, which is a growth area, if you were going to make more acquisitions, without giving away inside information, you are likely to do more in the renewable area or in the carbon area? mike: it is an active field of

opportunity in both. for us, it is really driven by strategy, asset quality and value, the typical things we look at when we do a deal. as i have said, over the last two years, we've done a big traditional energy deal, we've done a renewable acquisition. in the years ahead, we will probably do acquisitions in both of those spaces. david: when president nixon took office, shortly thereafter, there was an oil spill in santa barbara. and under president obama, there was an oil spill in the gulf. i think british petroleum. when you are doing offshore, how safe is it to avoid this kind of environmental damage? is it better than it used to be? or are there greater precautions than there used to be? mike: absolutely. the industry has continually improved operating practices, equipment, certainly the regulators in the u.s. have very high standards and we work closely with the regulators on that. the advent of newer technologies have continually made this

safer. these are challenging, difficult operations in those kinds of pressures, water depths and environments, but the industry has a strong track record today and there have been some notable incidents over time. but every company in this industry works really hard to prevent those. david: so, today, did you not worry about that kind of offshore drilling problems because the safety is pretty good compared to what it used to be? mike: every day i get up and worry about safety and protecting the environment. our people work in a demanding business. and it is a highly technical activity. we have very talented people and we have very strict protocols and standards to keep people and the environment safe. but you can never take it for granted. david: why do you think it is that people love energy, but they don't love energy companies? in other words, people in the united states and around the world consume enormous amounts of oil and gas and the people that provide it, like chevron, don't seem to be so popular. why is that?

mike: you know, i don't know exactly why it is. you know, we are a big company. the numbers are big. sometimes, big isn't popular. big energy, big government, big tech. maybe big private equity is an exception to that. but we are a big company. we represent less than 2% of global oil production. so in the scheme of things, a very competitive market. we are a relatively small player. i think what is important to remember is, we need to have a balanced approach to energy. and that means we have to focus on affordability. because affordable energy is essential for economic prosperity. reliable supply for national security, because energy security and national security are late, then protecting the environment. as prices get high and it gets less affordable, you find people that are upset. and part of that is because we

really haven't necessarily been able to find the right balance among those three. david: and, to improve the overall image of the energy industry, is there something the ceos or companies can do to improve the image so that people when they walked down the street go, wow, chevron has done a great job for america today. is that possible, or energy companies just don't have that likely public image that will be so good? mike: i think what would help, david, is to engage in a more balanced conversation about the benefits of energy. there are a lot of people who have views on what some of the consequences are of the use of energy. but, as you say, they have made advancements in the quality of life, you know, possible that we would not have imagined two centuries ago. and i think, as we go forward, it is absolutely likely that we find ways to meet the needs of a growing world and reduce the carbon impact. david: let's suppose tomorrow

you decided to retire and become a cabinet officer or something or do something else. what would you say you have achieved as ceo of chevron that you are most proud of? mike: well, i would hope that people would say, he thought of others first. he strengthened the culture of our company. he kept people safe, and made the company a better company when he left than it was when he found it. ♪