Chevron is not retreating from hydrocarbons even as it expands its low carbon portfolio. Speaking at the WSJ CEO Council, Chevron CEO Mike Wirth outlined a transition strategy that prioritizes technologies aligned with the company’s existing capabilities and, critically, its return on capital expectations.
Chevron’s approach stands apart from European oil majors that have invested heavily in wind and solar manufacturing and project development. Wirth made clear that Chevron deliberately avoided those sectors, arguing that turbine manufacturing and large scale solar installation sit outside the company’s core competencies. Instead, Chevron has focused on hydrogen, carbon capture and storage, geothermal energy, and biofuels, areas where it already controls assets, infrastructure, or technical expertise.
That selectivity reflects a broader recalibration across the oil and gas sector. U.S. political support for renewables has become less predictable, with federal tax credits and state level incentives facing increased scrutiny. Wirth explicitly framed subsidy independence as a prerequisite for long term investment, signaling skepticism toward business models that depend on permanent government support. While he acknowledged that early stage technologies often require policy backing to scale, he emphasized that Chevron’s capital discipline demands competitiveness without subsidies over time.
Biofuels currently meet that test more convincingly than other alternatives. Globally, biofuels production exceeded 180 billion liters in 2023, driven primarily by ethanol and biodiesel markets in the United States, Brazil, and Southeast Asia. These fuels already integrate into existing refining and distribution systems, reducing capital intensity and deployment risk. Chevron’s optimism toward biofuels reflects both their maturity and their compatibility with its refining footprint, particularly as aviation and maritime sectors search for lower carbon liquid fuels that do not require entirely new infrastructure.
Hydrogen, by contrast, remains a technical and economic challenge. Wirth described hydrogen as difficult, pointing directly to thermodynamic constraints. Green hydrogen produced via electrolysis typically requires around 50 to 55 kilowatt hours of electricity per kilogram, before compression, storage, or transport losses. Even under optimistic renewable power cost assumptions, delivered hydrogen prices remain well above levels required for widespread industrial or transport adoption. This reality contrasts sharply with political narratives that position hydrogen as a near term replacement for fossil fuels.
Chevron’s cautious stance carries weight given its existing role as a hydrogen producer. The company reports producing around one million metric tons of hydrogen annually, primarily for internal refining processes. This is not an entry level experiment but an industrial scale operation, and it underscores why Chevron is acutely aware of hydrogen’s inefficiencies. The fact that hydrogen has been part of Chevron’s operations for decades makes its skepticism harder to dismiss as ideological resistance to change.
Geothermal energy occupies a different position in Chevron’s portfolio. Unlike wind and solar, geothermal offers continuous baseload power, an attribute that becomes increasingly valuable as grids integrate higher shares of intermittent renewables. Global geothermal capacity remains modest at roughly 16 gigawatts, but interest has grown as advanced drilling techniques borrowed from oil and gas open access to deeper and hotter resources. Chevron argues that its subsurface expertise and drilling experience translate directly into geothermal development, reducing technical risk compared with new market entrants.
This focus aligns with U.S. policy signals. Geothermal is one of the few renewable technologies to receive bipartisan support, including under the Trump administration’s emphasis on domestic energy production. That political durability may make geothermal more attractive to companies wary of abrupt regulatory shifts. Still, commercial scalability remains uncertain, as enhanced geothermal systems have yet to demonstrate consistent cost reductions at scale.
Carbon capture and storage also fits Chevron’s skills based framework. The company already operates large scale CO2 injection projects, primarily for enhanced oil recovery. While CCS economics depend heavily on carbon pricing and tax credits such as the US Section 45Q, Chevron appears to view CCS as an extension of its existing subsurface operations rather than a speculative new business.
Wirth’s remarks also touched on nuclear power, which he described as the ultimate low carbon technology. Nuclear currently supplies about 9 percent of global electricity, yet capacity additions have lagged demand growth for decades. Chevron’s venture investments in nuclear fusion reflect optionality rather than near term deployment, as commercial fusion remains unproven. Even so, the company’s interest signals recognition that electrification driven by data centers and artificial intelligence could strain power systems beyond what renewables alone can supply.
Chevron’s 2024 sustainability report formalizes this strategy, committing to grow oil and gas production while lowering operational carbon intensity and selectively expanding into renewable fuels, CCS, hydrogen, and power generation for data centers. The absence of aggressive absolute emissions reduction targets distinguishes Chevron from some peers, but it also reflects a sober assessment of global energy demand trajectories.
