Chevron CEO Mike Wirth praises Texas, bemoans California home

By Kevin Crowley on 10/10/2019

HOUSTON (Bloomberg) - Chevron may be based in California, but CEO Mike Wirth had little praise for the state as he lauded the Texas business environment during an event in Houston on Wednesday.

The Chevron boss hailed Texas’s resource base, its skilled workforce and overall business environment while criticizing policies back in the Golden State in a wide-ranging fireside chat at a gathering organized by the Greater Houston Partnership. He also committed Chevron to reducing flaring and methane emissions in the Permian Basin and vowed to increase diversity among the company’s senior leaders.

“The policies in California have become pretty restrictive on a lot of business fronts, not just the environment,” Wirth said. “I don’t know there’s a better place in the world for us to do business than” Texas and the Gulf Coast.

Chevron’s headquarters are in San Ramon, less than an hour’s drive from San Francisco, where its earliest predecessor, Pacific Coast Oil Co., was founded 140 years ago. Yet the company’s largest office is in Houston and a growing portion of its business is either located in, or controlled by, Texas. Almost 20% of Chevron’s year’s capital spending is allocated to the Permian Basin, the country’s largest oil patch.

“The challenge for Texas is to continue to be a leader in energy development and set the standards high for the environment,” Wirth said.

The state’s oil boom has attracted criticism from environmentalists for releasing greenhouse gases into the atmosphere at an alarming rate. Flaring and venting, or releasing methane into the atmosphere, has surged in the Permian basin over the past decade as excess gas is produced as a waste product of oil. As much as 650 MMscf of gas is currently emitted in this way, triple the level of two years ago, due in part to a lack of pipelines, according to research firm Rystad Energy.

Chevron has committed to zero routine flaring in the Permian, a goal that’s only achievable because of the slow, methodical way the oil giant entered the basin, Wirth said. “As we were going slow we were laying in place the foundation for gathering in the field, for transportation of all the commodities,” he said.

Another key goal of his tenure is to improve diversity, especially increase the number of women in senior leadership positions, Wirth said. “We don’t get the best of the workforce if we only have a portion of the population to draw upon,” he said. Improving the environment for women and minorities is the “easiest business case to make,” he added.

Chevron has begun hosting a series of workshops called Lean In Circles to discuss how the corporation can become more inclusive. The goal is for employees “to talk about things they don’t normally talk about at work,” Wirth said.

 

Back in California, it’s not just the state’s energy policies that are bugging Wirth. About half a million homes and businesses in the north of the state lost power Wednesday as utility giant PG&E Corp. carried out a planned blackout. Wirth’s house was affected.

“My home in California is without power today because the utility company hasn’t focused on the fundamentals,” he said, emphasizing the importance of a strong safety culture.

The CEO’s comments prompted a suggestion from his interviewer at the event, Bobby Tudor, the founder of Houston-based investment bank Tudor Pickering Holt & Co. “If California ever decides they don’t want one of the world’s great oil companies, we will take you in Houston,” Tudor quipped.

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