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May. 7 2009 - 3:28 pm | 19 views | 1 recommendation | 2 comments

Chevron CEO: Learn to love your oil addiction, America

David O'Reilly - World Economic Forum Annual M...

Chevron's David J. O'Reilly, spreading the gospel of black gold at Davos. Image by World Economic Forum via Flickr

Those dreams you have of an oil-free world filled with quietly humming electric cars and solar panels powering your plasma screens? Lose ‘em. Want to cut carbon output, Congressman Waxman? Get real. Oil is here to stay, whether you like it or not. So says David J. Reilly, CEO and Chairman of energy giant Chevron Corp.

O’Reilly, of course, didn’t quite phrase it that way, but his message at today’s Chief Executives Club of Boston meeting I attended was clear: the sheer size the energy demands of the U.S. and developing world means oil, coal and natural gas have to play a huge role for decades to come. So get used to it and open up coastal America to offshore drilling for the 30 billion barrels of oil O’Reilly believes sit on the continental shelf.

“We [the United States] are not an energy weakling. We are an energy powerhouse,” he told the approximately 250 attendees, including hundreds of area CEOs, a dozen Massachusetts politicians and a smattering of Jesuit priests from CEO Club partner Boston College.

While acknowledging alternative energies will eventually play a key part in meeting U.S. energy needs, O’Reilly strongly warned that those wishing to cut out conventional fuels would set the country “on a straight path to a pre-industrial standard of living.”  Though not mentioning him by name, O’Reilly clearly takes umbrage at Congressman and Energy and Commerce head Henry Waxman. ”We have all heard the people running for office say they will reduce carbon 20% by 2020 – sounds nice, doesn’t it, 20 by ‘20? – but they overstate how easy that is and understate the cost it will take.”

O’Reilly also took President Obama to task, again not by name, by ridiculing a carbon cap-and-trade system being proposed to help the nation reduce greenhouse gases. “If you liked credit derivative swaps, you’ll love cap and trade. This is smoke and mirrors.”

The Dublin-born and -trained engineer, who ascended to the top spots of Chevron in 2000, made his case that oil and gas are indispensable to the country’s energy security and to the noble goal of raising the developing world out of poverty. Consider, he said, that the world uses the equivalent of 240 million barrels of oil a day to meet its energy needs, a level that is 50% more than 20 years ago and is bound to grow another 30% by 2029, even with aggressive strides toward energy efficiency.

O’Reilly argued that even optimistic growth in American wind and solar power generation will only replace a minority of oil needed. Make all transportation worldwide emissions free tomorrow, he said by way of example, and it will only reduce greenhouse gases by 10%. Make all the energy grid generation worldwide emission-free and it only takes off another 25%. That leaves a lot unmet demand if there is no oil.  ”We need nuclear and coal, we need wind and oil” to meet all demand, he said.

“Never forget, the most powerful economies in the world are powered by conventional fuels.  Try and change it overnight and all you get is a weaker economy.”

Consider yourself warned.


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  1. collapse expand

    O’Reilly told the truth, inconvenient as it is. President Obama won’t be able to change the facts. He will only be able to feed the current popular delusion with “energy for nothing” dreams. The triumph of hope over experience! The only way we’ll be able to significantly reduce our dependence on fossil fuels in the short run is a quick return to the stone age.

  2. collapse expand

    This sick son of a gun just does not get it. Him and his thug friends like Dick Cheney and George Bush should be behind bars. They are liars thieves and thugs. They just go in and buy up all of the votes they need to destroy the planet and leave the American people with the bill. The coal industry had 150 years to clean up their crapp. They lied about clean coal. My two year old has her diaper full of clean coal. Do not rub my nose in the fact that you bought off our politicians. You day is coming. I would love to be there the day you have judgment passed on you by our dear God. You might think that for the little time that you are here on this planet pales in comparison to what you will see in Helll for eternity. You are a sick rotten bastardd. May you burn in hellll for eternity. God may forgive you but the American people will not. You and all of you thug friends in suits should burn in hellll.

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    About Me

    I've listened to Mort Zuckerman brag about the size of his yacht, reminisced with Donald Trump about the NJ Generals and sloshed back $150 bottles of wine with Gordon Getty on camera. I've written extensively for Forbes, The Wall Street Journal, Inc., Barron's, the AP, The Washington Post Magazine and many other outlets. I also write and edit the Cabot Green Investor (www.cabot.net/green), a newsletter on eco-friendly investing. In addition to writing about business titans and investing, I also write about exotic travel and wine. I'm based on Boston's north shore, with my wife Jeanne, also a writer, our baby daughter, who likes saying new words, and our cat, who sleeps on the daily paper. Reach me at bcoffey at riverleap dot com.

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