I thought I’d pop next door to San Ramon and check in with Dave O’Reilly, the outgoing CEO of Chevron (NYSE:CVX). The original Standard Oil of California, and one of the Seven Sisters, Chevron has a storied history. It discovered the legendary Ghawar field in Saudi Arabia in the thirties, the world’s largest, and later took over Gulf Oil (from Paul Getty), and Texaco. It is now the largest company in California. The problem for the US is that over the last 20 years demand has increased by 4 million b/d, while depletion has cut domestic production by 4 million b/d. The 8 million b/d gap can only be met with imports, which is why Chevron now earns 75% of its earnings from overseas, doing battle with Nigerian rebels and uncooperative foreign governments. The net net is that oil prices are going up. All alternative sources will need to be developed to deal with this widening gap, be it wind, solar, biofuel, or nuclear. Chevron is in fact the world’s largest producer of geothermal energy, accounting for 2% of its total supplies, is also the state’s largest installer of solar panels, and has invested $300 million in biofuel research. This is more than just “feel good” money. The real impediment is that capital turnover in the energy industry is extremely slow. Coal fired power plants can last a century, and our 245 million cars last 15-18 years. Some of today’s low mileage clunkers will still be on the road in 2030. Even with the best efforts, Chevron will get three quarters of its revenues from oil in 2050. There is 100 years worth of investment in our current energy infrastructure and it won’t be replaced overnight. We will be lucky if we can cut CO2 emissions by 25% before 2050, a far cry from the Sierra Club’s 90% goal. The quickest way to cut emissions is to convert our coal fired power plants to natural gas. When Chevron took over Texaco in 2001, it inherited its legal headache in a $27 billion lawsuit over clean up of the Lago Agrio field in Ecuador, a hot button with environmentalists. Now David, a modest Irish engineer who came up through the research side of the company, has to be escorted by bodyguards at public events.