Chevron Executive Discusses Oil Prices, Industry Outlook

JIM LEHRER:

Finally tonight, the third in our conversation series on the high cost of oil. So far, we have talked to two writers who have reported and commented on the subject. Ray Suarez has the third conversation.

RAY SUAREZ:

Tonight, we get the perspective of a major oil producer. Chevron Corporation is one of the largest oil companies in the world, the second-largest in the U.S., and one of the most profitable, too. Last year, it posted a profit of nearly $19 billion.

For the record, Chevron is also one of the NewsHour's corporate underwriters.

Peter Robertson is vice chairman of the board. He was in Washington recently to testify before lawmakers on Capitol Hill and joins us now.

With supplies steady, pretty much the same as they were last year, demand not really spiking, but also staying steady, why is oil over $100 a barrel?

PETER ROBERTSON, Chevron executive: Well, I think when you say demand is steady, it's demand in the United States that's steady. In fact, in some cases, demand in the United States is down a little bit. Certainly, gasoline this year is lower volumes than this time last year.

But the demand of the world is not down. And we're part of the world. And so the emerging countries of the world, the non-OECD countries of the world that are growing rapidly, are demanding more and more energy.

Billions of people that are emerging from poverty are raising their standards of living. And they want energy to meet those standards of living. And so the demand is outstripping our ability to keep up with the supply.

RAY SUAREZ:

But oil is a commodity that's priced day to day by the market. And the sources I talk to say that stocks are healthy in the places where oil pools up in the world. There's plenty of supply on the spot market where some of that price-setting is done.

PETER ROBERTSON:

Yes. But there's — I mean, if you look at it from our perspective in the United States, one of the things that's happened is — I mean, I mentioned the demand, the dramatic demand increases in the world, but there's also been several geopolitical sort of disruptions which sort of threatened the disruptions, and in some cases real disruptions, to the supply of oil.

And also the dollar has strengthened — or, excuse me, weakened dramatically here over the last few weeks and months. And if you look at it from an American perspective, oil has really tripled over the last three or four years. From a European perspective, it's doubled.