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COPYRIGHT 2005 Voxant Inc.
Original Source: THE CHARLIE ROSE SHOW
CHARLIE ROSE, HOST: Welcome to the broadcast. Tonight, the CEO of ChevronTexaco, David O`Reilly.
(BEGIN VIDEO CLIP)
DAVID O`REILLY, CHAIRMAN & CEO, CHEVRONTEXACO CORPORATION: Being a conservationist and being more efficient in how we use energy is good for greenhouse gas emissions, which could contribute to global warming. It`s also good for the economy. It`s good for - it`s good - it`s good in many dimensions. So we -- our position has been, we`re going to work to solve problems, we`re going to work on alternative energies that we think might work. We`re going to work on being more efficient in how we use energy ourselves and promote the efficient use of energy among others.
(END VIDEO CLIP)
CHARLIE ROSE: And actor Viggo Mortensen, whose new film is called "A History of Violence."
(BEGIN VIDEO CLIP)
VIGGO MORTENSEN, ACTOR: This movie in Cronenberg`s hands is as much a movie against violence as it is about violence and the consequences of violence. You know, I think that it points out, the story does, that the humans can reason, and therefore can imagine resisting violence. In other words, can make a deliberate choice to.
CHARLIE ROSE: Yes.
VIGGO MORTENSEN: . struggle against it, and I think even the character I play, who does have a propensity for it or an ability to use violence, or possibly a childhood that involved that, can also struggle. And I think it`s an ongoing struggle. I don`t think that struggle ever stops.
(END VIDEO CLIP)
CHARLIE ROSE: David O`Reilly and Viggo Mortensen, next.
(COMMERCIAL BREAK)
CHARLIE ROSE: David O`Reilly is here. He`s the chairman and CEO of ChevronTexaco. Last month, the company finalized a disputed and much publicized takeover of Unocal. The merger made ChevronTexaco the fourth largest energy company in the world. I`m pleased to have David O`Reilly back at this table to talk about a number of things, including the supply of oil, including this successful courting of Unocal, and also, the future of the energy business and environmental questions and all of that. Because, as you notice from advertisements you see, in which there`s a letter, a personal letter from David to you, he has shown a consciousness of the importance of a relationship between a company and the public.
Thank you for doing this.
DAVID O`REILLY: You`re welcome, Charlie, it`s nice to be here.
CHARLIE ROSE: You do have some sense that because of the power, because of the uniqueness of an energy company, you have some sense of responsibility to - to communicate not only to your shareholders, but to give some -- what?
DAVID O`REILLY: Well, information to the public, and to the other people who need to know about the importance of energy as - as a part of our quality of life. It`s -- for the last couple of years, I`ve been very concerned about the growing supply deficit, if you like, or the narrowing of the gap between supply and demand, globally. And -- so this is an effort to get that, communicate that, because I do think we`re in a much tighter supply-demand situation. And energy is - is going to be more costly. And - and I believe that the public needs to be aware that that is going to take a concerted effort to provide adequate, affordable energy for the quality of life that we have experienced for many years here.
CHARLIE ROSE: What`s - what`s necessary to be done to maintain a supply of energy?
DAVID O`REILLY: I think we`ve got to work on both sides.
CHARLIE ROSE: Supply and demand?
DAVID O`REILLY: Supply - we`ve got to work on the demand side and the supply side. I - I do think that particularly in light of the hurricane, which has just occurred, it occurred at a time when the supply lines were already pretty thinly stretched. So, over the next few months, I think the public should do everything it can to conserve energy. Whether that`s driving a little bit less, maybe not putting that foot on the accelerator as much, turning down the thermostat. Because all -- the Gulf of Mexico is a very important source of oil, natural gas and petroleum products for this country. And it has gone through a most devastating, devastating hurricane, which I think has been well documented.
CHARLIE ROSE: Now -- let`s talk about that and the impact of that. Did you have a lot of facilities in the Gulf?
DAVID O`REILLY: Yes, well, first of all, we`ve got almost 4,000 people in the Gulf that work in the affected area. About 25 percent of them have suffered either total loss or severe damage to their home. That`s - that`s a lot of people. And - and I think what everyone is missing here is that this tragedy is not just about the facilities themselves, but it`s about the people .
CHARLIE ROSE: Sure.
DAVID O`REILLY: . that operate and work and are actually, I`m very proud of, I was down there last week, you know, people who have lost their homes are working 12, 16 hours a day to try to restore the supplies.
CHARLIE ROSE: And where are they staying?
DAVID O`REILLY: Well, we`ve built temporary facilities. We have a tent - tent city in Pascagoula. We are building temporary facilities in the southern part of Louisiana, south of New Orleans, and also to the northeast -- northwest of New Orleans. We`re providing housing, food. It`s a big, kind of inside the company relief effort. And I`m - I`m really proud of what our people are doing.
And we`re not unique. There are - there are many businesses that are confronting this - this very, very same issue.
CHARLIE ROSE: If you measure the amount of oil that you were bringing out of the water or out of the earth before Katrina and now, there`s a diminution of 5 percent?
DAVID O`REILLY: Well, for a while, on the crude side, it was - it was about, on a global basis it was about 2 percent of the global supply .
CHARLIE ROSE: Right.
DAVID O`REILLY: . but 25 percent of the United States production of oil. About half of that has been restored, what I would call the easy half. The other half is going to take more time.
Natural gas, 10 billion cubic feet a day of gas, that`s 20 percent of U.S. production, was knocked out. Again, about 60 percent of that has been restored. There`s still about almost 5 - almost 10 percent that has yet to be restored that will take some time. And of course, about 10 percent of our refining capacity had to shut down. About half of that has been restored, but there are some refineries there that are - that are severely damaged.
CHARLIE ROSE: What are the lessons we ought to learn with respect to - to the kinds of disruption that a hurricane like this, in this -- Category 5 hurricane and the destruction it did because of the flooding -- what are the lessons in terms of disruption of supply lines, not only for oil but also for food and everything else?
DAVID O`REILLY: I think the difference about -- we`ve experienced hurricanes before. I - I was in the Gulf visiting shortly after Hurricane Camille, in 1969 .
CHARLIE ROSE: Yes.
DAVID O`REILLY: We established our facilities there too. But - but I think the big issue about this hurricane that makes it so different is, I think it`s partly the population has grown in the affected areas. And we`re seeing an awful lot more impact on people and on the - and those are the people that generally work in that area.
So it`s a - it`s a human tragedy that we`re seeing that impacts individuals, and that it does impede the recovery effort. So we found in our - in our facilities, for example, the effects of employees, our first, first of all, safety. We didn`t lose anybody, very proud of that. Not one single person. Secondly, we`ve got to stabilize their home and their family situation.
I talked to some of our - of our young mothers who are trying to find school for their kids. The school isn`t there, no access to school. So we`ve got school, food, basic needs, shelter. And establishing that first is, I think, the critical step to recovery for the long term.
Then we - then we have got to work in two directions. We`ve got to - we`re working very diligently, thousands of people, to restore the production that`s been lost, whether it`s in the -- in oil, in gas, or -- natural gas, or in the petroleum products, such as gasoline, diesel fuel and jet fuel. Working very hard to restore those.
We`ve also got to assist them and support them in their rebuilding effort. Because it`s going to - it`s going to take, based on the destruction I saw .
CHARLIE ROSE: Yes.
DAVID O`REILLY: . we`re looking at a number of years.
CHARLIE ROSE: But wasn`t there a sort of shock to...
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