Chevron Company News
Dear Colleagues,
The price of gasoline has again this year become a popular topic in the media. One of the factors influencing the price of gasoline is the unprecedented price of crude oil — the feedstock used to make gasoline — of more than $100 per barrel.
As we move into the summer driving season, no doubt you may find yourself fielding numerous questions about factors affecting prices at the pump. To help you set the record straight, we have updated and attached a two-page fact sheet that you can use with family members and friends. It also discusses what Chevron is doing to develop new energy resources and alternatives, and what we as consumers can do
Our Vice Chairman, Peter Robertson, testified earlier today before Congress on these same subjects and on what government can do to create a long-term strategic energy policy for the United States . If you are interested in more detail, I encourage you to review his testimony on Inside.
We can all be proud of the work we do to provide critical energy resources while encouraging efficiency and conservation. With your help, we can explain how Chevron is working to be part of the energy solution.
What's driving up U.S. gasoline prices?
U.S. gas prices have hit record highs. Consumers are feeling the impact and wanting answers.
The biggest factor affecting gas prices is the price of crude oil.
· Crude prices have a major impact at the pump — accounting for about 70 percent of the total cost of each gallon of gasoline.
· In March 2008, crude prices passed $100 a barrel for the first time — up from an average of $62 a year earlier. At $100 a barrel, the primary component of gasoline — oil — costs $2.38 a gallon.
Why is crude so high?
· Strong Global Demand: Strong economic growth in China , India and other developing countries is fueling global demand for energy. The world now consumes 3.6 billion gallons of oil a day. By 2030, global demand for oil is projected to increase just over 35 percent.
· Tight Supply: Expanding production to meet demand is more and more challenging. It takes longer, costs more and is becoming more technically difficult to bring new oil supplies online. And, global supply is aggravated by political instability and inclement weather.
· Economic Forces: The weakening U.S. dollar has contributed to higher crude prices, as has increased activity in the global commodities market where oil is traded.
· Interconnected, Global Energy System: The United States , which has 5 percent of the world's population, consumes 25 percent of the total world oil supply. As the leading global energy consumer, the U.S. is affected significantly by global market dynamics.
Regional and local factors also affect gasoline supply and prices.
· Seasonal Changes: As summer approaches, gasoline formulas change to reduce emissions. Refiners must draw down their tanks to switch to these blends, which temporarily lowers available inventories.
· Different Gas Recipes: There are 17 different 'recipes' for gasoline across the country. This makes it difficult to import gasoline supplies from one region to another if shortages occur in one location.
How is Chevron helping meet the rising demand for energy?
Bringing more energy supplies to market will help lower prices. Chevron is aggressively investing in developing energy supplies for today and tomorrow.
· Over the past six years, we invested $73 billion to bring new energy supplies to market.
· In 2008 alone, we're planning to invest nearly $23 billion to bring on new energy supplies, almost triple what we spent in 2004.
· We have 40 major exploration and production projects around the world in which Chevron plans to invest $1 billion or more in each.
To satisfy the world's growing appetite for energy, we need all the energy we can find. For the next 25 years, oil, coal and natural gas will continue to meet about 85 percent of the world's energy needs. Renewable energy is promising for the long-term. While their volumes will grow, these sources will remain a relatively constant part of the total energy mix.
· From 2002 through 2009, Chevron estimates it will spend $4.5 billion on projects to develop renewable technologies, as well as in energy efficiency solutions.
· We blend ethanol into almost 40 percent of the gasoline we sell in the United States .
· We're researching technology to transform nonfood sources into renewable transportation fuels, such as converting cellulose-based biomass into economical, lower carbon fuels.
· We're testing next generation, cleaner burning diesel fuels to meet growing demand for more fuel efficient diesel passenger cars.
· We're pursuing hydrogen fuel alternatives and have opened five prototype hydrogen energy stations.
What you can do as an individual
Consumers are responding to a higher priced market by reducing their fuel usage and buying more fuel-efficient vehicles in record numbers. You can be part of the solution by saving on energy. How? Here are a few tips for motorists:
· Cut down on car trips. Car pool when possible.
· Avoid excess idling and hard acceleration or sudden braking. Driving smoothly and steadily makes the best use of your fuel.
· Observe the speed limit. Each 5 mph you drive over 60 mph is like paying an additional $0.21 per gallon of gas.
· Keep your vehicle tuned and tires properly inflated.
Dear Colleagues,
The price of gasoline has again this year become a popular topic in the media. One of the factors influencing the price of gasoline is the unprecedented price of crude oil — the feedstock used to make gasoline — of more than $100 per barrel.
As we move into the summer driving season, no doubt you may find yourself fielding numerous questions about factors affecting prices at the pump. To help you set the record straight, we have updated and attached a two-page fact sheet that you can use with family members and friends. It also discusses what Chevron is doing to develop new energy resources and alternatives, and what we as consumers can do
Our Vice Chairman, Peter Robertson, testified earlier today before Congress on these same subjects and on what government can do to create a long-term strategic energy policy for the United States . If you are interested in more detail, I encourage you to review his testimony on Inside.
We can all be proud of the work we do to provide critical energy resources while encouraging efficiency and conservation. With your help, we can explain how Chevron is working to be part of the energy solution.
What's driving up U.S. gasoline prices?
U.S. gas prices have hit record highs. Consumers are feeling the impact and wanting answers.
The biggest factor affecting gas prices is the price of crude oil.
· Crude prices have a major impact at the pump — accounting for about 70 percent of the total cost of each gallon of gasoline.
· In March 2008, crude prices passed $100 a barrel for the first time — up from an average of $62 a year earlier. At $100 a barrel, the primary component of gasoline — oil — costs $2.38 a gallon.
Why is crude so high?
· Strong Global Demand: Strong economic growth in China , India and other developing countries is fueling global demand for energy. The world now consumes 3.6 billion gallons of oil a day. By 2030, global demand for oil is projected to increase just over 35 percent.
· Tight Supply: Expanding production to meet demand is more and more challenging. It takes longer, costs more and is becoming more technically difficult to bring new oil supplies online. And, global supply is aggravated by political instability and inclement weather.
· Economic Forces: The weakening U.S. dollar has contributed to higher crude prices, as has increased activity in the global commodities market where oil is traded.
· Interconnected, Global Energy System: The United States , which has 5 percent of the world's population, consumes 25 percent of the total world oil supply. As the leading global energy consumer, the U.S. is affected significantly by global market dynamics.
Regional and local factors also affect gasoline supply and prices.
· Seasonal Changes: As summer approaches, gasoline formulas change to reduce emissions. Refiners must draw down their tanks to switch to these blends, which temporarily lowers available inventories.
· Different Gas Recipes: There are 17 different 'recipes' for gasoline across the country. This makes it difficult to import gasoline supplies from one region to another if shortages occur in one location.
How is Chevron helping meet the rising demand for energy?
Bringing more energy supplies to market will help lower prices. Chevron is aggressively investing in developing energy supplies for today and tomorrow.
· Over the past six years, we invested $73 billion to bring new energy supplies to market.
· In 2008 alone, we're planning to invest nearly $23 billion to bring on new energy supplies, almost triple what we spent in 2004.
· We have 40 major exploration and production projects around the world in which Chevron plans to invest $1 billion or more in each.
To satisfy the world's growing appetite for energy, we need all the energy we can find. For the next 25 years, oil, coal and natural gas will continue to meet about 85 percent of the world's energy needs. Renewable energy is promising for the long-term. While their volumes will grow, these sources will remain a relatively constant part of the total energy mix.
· From 2002 through 2009, Chevron estimates it will spend $4.5 billion on projects to develop renewable technologies, as well as in energy efficiency solutions.
· We blend ethanol into almost 40 percent of the gasoline we sell in the United States .
· We're researching technology to transform nonfood sources into renewable transportation fuels, such as converting cellulose-based biomass into economical, lower carbon fuels.
· We're testing next generation, cleaner burning diesel fuels to meet growing demand for more fuel efficient diesel passenger cars.
· We're pursuing hydrogen fuel alternatives and have opened five prototype hydrogen energy stations.
What you can do as an individual
Consumers are responding to a higher priced market by reducing their fuel usage and buying more fuel-efficient vehicles in record numbers. You can be part of the solution by saving on energy. How? Here are a few tips for motorists:
· Cut down on car trips. Car pool when possible.
· Avoid excess idling and hard acceleration or sudden braking. Driving smoothly and steadily makes the best use of your fuel.
· Observe the speed limit. Each 5 mph you drive over 60 mph is like paying an additional $0.21 per gallon of gas.
· Keep your vehicle tuned and tires properly inflated.
