To meet that demand, Chevron is in the midst of an enormous cycle of investment aimed at extracting oil and gas from wherever it hides in the earth's crust.
Chevron Corp., based in San Ramon, Calif., is the second largest investor-owned oil and gas company in the world, and the third largest American company of any type as measured by revenue and profit. Over the last year, Chevron has earned $24 billion on revenue of $231 billion.
Watson, a 55-year-old California native and Chevron lifer, joined the company in 1980 as a financial analyst. Before becoming CEO in 2010 he was vice chairman in charge of strategic planning, business development and mergers and acquisitions. He also ran the company's international exploration and production business, led the company's integration with Texaco and was CFO.
Below are excerpts from an interview of Watson by The Associated Press, edited for length and clarity.
AP: What do you think is the biggest misunderstanding about your company or your industry?
WATSON: Just how much we invest in the business and the risks that we take to deliver the oil and gas that we all expect every day. We literally go to the ends of the earth to bring this energy to consumers.
AP: Can the industry continue to produce oil and gas at a price that can keep the world economy growing?
WATSON: I think so. We want to produce at a price our customers can afford, and I think there's ample resource to do that for the foreseeable future.
AP: People on all sides of the energy debate have long complained about the lack of a comprehensive energy policy in the U.S. Are we wishing for something that just can't happen in this country? And if not, what would it look like to you?
WATSON: Historically the United States has had a wonderful energy policy. We're blessed with a diversity of resources. We have oil. We have gas. We have coal. We have nuclear. And renewables. And as a result, one of our biggest competitive advantages has been affordable energy. You need a strong economy and you need affordable energy to fuel that economy.
AP: How should society go about reducing greenhouse gas emissions?
WATSON: If you look around the world, the countries with the best environmental practices are the wealthiest. There's a reason for that. If you're worried about where your next meal is going to come from or shelter over your head, your focus is on those things.
AP: The U.S. is a wealthy country, how should we reduce emissions?
WATSON: Well, we are a wealthy country. On the other hand, the economy is growing slowly. We have high unemployment. I think that’s part of the reason why the president said now is not the time for a carbon tax, because he recognized that that would put pressure on the economy and put pressure on our energy prices, put pressure on manufacturing business, put pressure on consumers.
AP: When it’s time to address the carbon issue, how should we do it?
WATSON: It’s very difficult for the United States to go it alone. Watch what (other) governments do. The day-to-day decisions being made (show) that concern about climate change is less than other concerns that they have.
That doesn’t mean there’s nothing we can do. There are a number of promising technologies to deliver lower carbon fuels. I would support (government funding) of pre-commercial activity to try to advance some of these breakthrough technologies.
AP: Will natural gas become a bigger part of the energy mix?
WATSON: Natural gas will displace coal in power generation. Getting natural gas into the transportation fleet is harder.