Chevron, as a direct descendant of Standard Oil, is a multinational energy corporation specializing in oil and gas exploration and production, refining, marketing and transport of chemicals as well as power generation.
Bamzai provides an exhaustive critique of the arguments supporting Chevron deference, including claims that agency expertise and congressional delegation justify it. Part II examines choices courts have when applying this doctrine.
Origins
Chevron Corporation is one of the world’s premier integrated oil companies and leading energy producers, operating globally to explore, produce, transport, refine and market transportation fuels & lubricants; produce chemicals & petrochemicals; as well as manufacture them.
Chevron Corporation can trace its roots back to 1879 with the establishment of Pacific Coast Oil Company to develop Pico Canyon Oilfield north of Los Angeles. Soon thereafter, this company became California’s primary producer and refiner until 1900 when Standard Oil of New Jersey bought out Pacific Coast Oil Company, merging them together with West Coast operations under John Rockefeller to form Socal (Standard Oil Company of California). Socal would remain as its name until 1984 when Chevron acquired Gulf Oil in one of the largest mergers ever done at that time; consequently changed to Chevron Corporation on November 1.
Chevron’s three-bar chevrons are instantly recognizable worldwide. This V-shaped symbol can be seen adorning sergeants of the US Army, Marine Corps and Air Force as well as numerous military installations around the globe. Prior to 1905 regulations standardized their upward orientation.
Traffic signs often use the chevron symbol to indicate a curve is ahead. Architecture uses it to designate curved roofs while aeronautics uses it to describe sharp turns. Its name originates from French chevron meaning wooden beam holding up ceiling of old house; later becoming punctuation mark, special character for equations, and symbol for nuclear bomb.
Chevron reduced spending on some oil- and gas-producing projects in 2009 due to lower energy prices and rising labor, materials, equipment, and supply costs. They concluded the year by increasing Tengiz Field production capacity as well as mandating that employees who work offshore or on U.S.-flagged ships receive COVID-19 vaccinations.
Growth
Revenue and net operating profit after tax (NOPAT) margins at our company have seen double-digit compounded annual growth since 2017, as evidenced by increased invested capital turns of 38% year over year – this bodes well as higher NOPAT margins help offset increasing production costs.
Chevron boasts an excellent balance sheet and returns a significant portion of profits back to shareholders through dividends and stock buybacks – as of 2Q 2023 alone, they had returned $11.6 billion through this mechanism, indicating they plan to continue this practice in future quarters.
However, Chevron faces several significant challenges that must be met head on; among the most significant is its effect on local communities. One such impact was the pollution of groundwater at a ranch in Texas where Chevron operates wells that leak. Ashley Watt testified that these wells may have led to her mother’s death from adrenal gland tumor.
Chevron faces additional difficulties related to climate change. Although they have taken steps to reduce carbon emissions, their primary energy source remains fossil fuels – posing an even greater challenge as world leaders look toward limiting greenhouse gas emissions and shifting away from using them altogether.
Lastly, the company is facing regulatory hurdles. Recently it announced it will incur charges of $3.5 billion to $4 billion related to Gulf of Mexico cleanup efforts and California policies forcing it to reduce refinery investments.
Chevron is a globally integrated oil and gas company that specialises in exploration, production and transport of crude oil; refining and marketing transportation fuels and lubricants; manufacturing and selling petrochemicals and additives; as well as producing and marketing petrochemicals and additives. Operating throughout North America, South America, Europe Asia Australia its assets comprise global upstream/midstream operations as well as an expansive LNG facility portfolio; its midstream business involves collecting storage transport systems of produced water gathering crude oil gathering/storage systems whilst their upstream activities primarily involve shale oil production activities.
Challenges
While the oil industry continues to thrive, it does face major obstacles. One such difficulty is climate change. According to forecasts by the International Energy Agency, world demand for fossil fuels will reach record highs by 2030; yet major oil companies continue to pursue clean energy projects and invest in renewable energies – Chevron recently reported its third-quarter results and stated its intention “to maintain capital and cost discipline to deliver higher returns.”
Chevron expanded its geothermal operations with the acquisition of Unocal in 2005, adding extensive South East Asian geothermal assets to their petroleum and natural gas portfolio. They have also invested in wind and solar energy; while Chevron continues to explore alternative fuels like methanol and synthetic gasoline as potential solutions.
This vertically integrated company engages in oil and gas exploration and production, refining, marketing and transport, chemicals manufacturing and sales as well as power generation. Upstream operations consist of exploring offshore and onshore oil fields as well as running pipelines and LNG regasification terminals; downstream activities involve making and selling gasoline, diesel fuel jet fuel kerosene and petrochemical products through retail networks including Chevron Texaco Union 76 brands.
Chevron is using technology to increase efficiency and cut costs, for instance by monitoring its upstream, midstream, and downstream activities using Internet of Things sensors – using LoRaWAN(r) network platform from OrbiWise as its network management solution – this enables it to monitor upstream, midstream, and downstream activities and help it improve efficiency, reduce costs, as well as minimize waste and pollution from its operations. LoRaWAN’s key advantages over other IoT technologies include long-range operation using low power consumption devices as well as affordability; further supported by an expansive ecosystem of device manufacturers using LoRaWAN(r).
The company is gambling that domestic politics will prevent significant climate policies that would restrict U.S. oil and gas domestic production, as well as anticipating that coal prices’ collapse and consequent reductions in carbon taxes and electricity bills will bring opportunities to produce more crude at reduced costs, thus selling it at premium in global markets.
Solutions
At its annual investor meeting, Chevron presented on progress being made towards their mission of “leveraging our strengths to safely and reliably provide lower carbon energy to a growing world”. Their goals include reducing carbon intensity of their oil and gas production operations as well as investing in renewable energy projects.
Advanced Clean Energy Storage (ACES), located in Utah, is one of the investments. This project uses two vast salt caverns to store hydrogen produced from renewable sources like wind and solar power production, then relay it back into a turbine for instantaneous electricity production when necessary. This could fill gaps in grid when wind or solar production drops temporarily.
Another project includes investing in short-cycle U.S. shale reserves, which are easier and more responsive to market prices than long-cycle reserves, to help balance out their portfolios and remain resilient during market fluctuations. This investment should enable the company to remain resilient despite fluctuations in markets.
Chevron has also expanded its use of LoRaWAN(r) networks across its global operations, where this open-source, low-power network technology supports various IoT devices like sensors and meters. LoRaWAN allows real-time data collection as well as reliable connectivity for remote areas where infrastructure may be lacking or nonexistent. Over the past year alone, Chevron deployed networks on four continents which are now in place at oil rigs, refineries, camps etc.
Chevron is also increasing its commitment to renewables by shifting more of its energy mix from fossil fuels towards cleaner sources like wind energy. They have already established themselves as leaders in offshore wind technology development and will invest further projects that capture carbon dioxide emissions produced from natural gas production.
Not as obvious as guns or abortion, the Chevron doctrine raises important constitutional questions: whether fundamental political issues should be decided by elected representatives of the people or unelected bureaucrats with agendas of their own. Agencies wield extraordinary powers not granted to them by Congress and taking up this matter in court could significantly alter our Constitutional structure.
