Due to the diversity of its portfolio, Chevron Corp. said it is well-positioned to meet potential changes in energy supply and demand in the face of evolving climate policy.
The company's second report on managing climate change, "Climate Change Resilience – A Framework for Decision Making," released March 1, offers details about the company's approach to governance, risk management, planning and low carbon investments. These include the evaluation of its portfolio and future investments, its views of supply, demand, commodity and carbon prices, and the factors that drive the global economy.
According to performance data from the company's 2016 corporate responsibility report, Chevron's net greenhouse gas emissions, on an operated basis, totaled 66 million tonnes of carbon dioxide equivalent, down from 68 million tonnes of CO2 equivalent in 2015 and flat to 66 million tonnes of CO2 equivalent in 2014. Chevron's net greenhouse gas emissions, on an equity basis, were 60 million tonnes of CO2 equivalent, up from 59 million tonnes of CO2 equivalent in 2015.
"Although we cannot forecast exactly what will happen in the future, we believe Chevron's governance, risk management and strategy processes are sufficient to mitigate the risks and capture opportunities associated with climate change. These processes are appropriate in order to enable the company to continue to monitor and adjust accordingly as climate policy develops," according to the report.
The report also said that while oil and natural gas demand is seen dropping below current levels due to the increased use of lower-carbon fuels, industry experts agree that consumption for the fuels will still account for about 50% of world energy demand for at least the next 20 years, even under nearly all policy scenarios that assume policy-driven emissions reductions.
In 2016, global liquid fuel demand was 97.5 million barrels per day. This figure included 78 MMbbl/d of crude oil and 14 MMbbl/d of natural gas liquids.
Over the last 20 to 30 years, oil demand has grown at a rate of about 1 MMbbl/d, or 1% annually. However, the International Energy Agency expects that world oil demand will likely rise at a more modest pace in future years due to slower economic growth, aging populations in traditional oil-consuming centers such as Europe, Japan and the United States, and policy-driven efforts to increase vehicle efficiency and alternative fuel penetration.
"Given these forecasts, Chevron will continue to develop resources to fulfill this projected demand. At the same time, we maintain flexibility in our portfolio and continually examine ways to adapt investment patterns in response to changing policy and demand," the recent Chevron report noted.

