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John McDonald, Chevron chief technology officer, on how Chevron fits in in Silicon Valley, and how the company is using solar and steam to extract oil...
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Out of the Middle East or from a faltering global economy -- -- it takes the energy question is Silicon Valley.
Landed on an action electoral energy when it comes to solving our nation's biggest problem she's there for exclusive three days in the -- coverage.
-- Well it's not just the Internet companies in the high tech -- of interesting creative companies that are really stuck here in Silicon Valley for the ideas it's also.
One big oil company the biggest company in California by sales and that is Chevron -- Dow component.
I'm joined now by the -- in charge of really coming up with the solutions the ideas He is John McDonald and He is the chief technology officer of Chevron.
What's it like to be in the valley for a -- who is part of an industry that maybe the belly doesn't necessarily.
Look scatter embrace.
Well -- well I think you know.
Oil and gas industries -- fed has been kind of old school not a lot of high tech.
I mean -- are simply want to person wearing a tie -- -- walked I had could have.
Which -- officially taken -- But we really embrace Silicon Valley in the venture capital business it's really the great access to new ideas new technologies we partner with the valley.
And what they get us an opportunity to try what they do with scale and replicate success.
Through through a partnership of our company.
We've been here in California for a long period time -- -- before the rally was in fact we have we had -- production California -- -- -- welcome to -- apparently some sort of.
-- Silicon Valley really came about in the seventies when they were making semiconductor chips out of silicon and this was sort of the area where that became a burgeoning business but.
Your -- in business right now it is using solar.
And steam to extract oil.
-- -- Mean -- commented this combination conventional oil.
Recovery on and renewable energy out of -- work for those who don't know -- a lot of the old world is heavy.
It mean it doesn't move by itself the likes to get -- opera house have pressure put on.
So here in California a lot of our oil is like it's heavy oil and sort of -- to move we burn natural gas to make steam and steam goes into the rose of war in the mix of all move.
Put on here in the demonstration project -- California's we've taken a 360 foot tower.
And surrounded it was 7000 meter that's what we're looking at here has focused on the boiler at the top to sun shines on -- -- A commercial water to steam and on tickets to input into the reservoir and are able to make that that very moss is like oil moved.
In the last fifteen years we've been able to take recoveries in California this have you all very difficult to produce from 10% to almost 67%.
Recovery.
So if this works that this demonstration plant in places around the world where gas is expensive for the lots of sunshine.
We're going to be able -- scale assault and use it elsewhere around and conserve water does that not conserve water and it uses minimal amount of water the water recycled through the system every day and it's a very very small amount.
Water usage and anyone who's ever lived in California I'm I'm warm embrace California knows of conservation of water is a huge deal the -- com and it's terrifying.
Absolutely right and in California we're actually in that producer of water into the system we actually some or surplus water reproduce from the -- reservoirs.
Has actually used in agriculture so we have checks for part of the system.
Biofuels.
Obviously people are looking at those and and we talked a lot of people example I was interviewing David Cote of Honeywell Honeywell's created a bio fuel out of algae it that.
Is now actually powering jet engines of big jets and they've they've had successful flights to me that's amazing there are a lot of people in on this competition how do you when.
So it's it's it's a great question.
You know file feels -- -- feels is how -- you -- scale and how do you make it affordable.
And so we've also developed a biofuels in the lab we were able to convert things to two products what we're trying to do in biofuels.
This to find fuels -- can drop into existing infrastructure because we can produce fuels editor ten dollars a gallon.
But if we actually make it that he's existing infrastructure -- reduce that cost -- be able do it sooner.
That's for the trip -- due to scale I do so it's affordable and get faster five holding onto existing interest.
Are a couple of issues incentives this is a touchy subject certainly the oil industry gets a lot of incentives in the form of tax breaks the renewable.
Energy companies are getting tax incentives you get to straddle both of those lines are -- you want my taxpayer money should still be floating -- Very mature successful companies like you got.
So I think part of it you know incentives and subsidies -- of a different.
Eventually a business has to stand -- -- to treat you can't have sustained subsidies that continue to make technology work that is really gonna work on its own.
So we don't really support.
Long term subsidies maybe somebody over the hump to start with but long term we don't supports -- the technology SP good enough to Johnstone.
Percent I don't know owned gas company we have some more tax code of -- manufacturing companies in the United States so we're look has -- be receiving subsidies from the fact.
We're just following the tax code.
As we finish up California on how the system got a legislature that's in disarray taxes are extraordinarily high.
Because ever thought about moving their headquarters tomorrow.
Well we're California company we've been here for a long time California's got a lot of things going for it -- -- great national labs it's got great universities that venture capital business we just described here is very vibrant California.
We've been innovating in California for 130 over a 130 years and we produce billions of barrels of oil to California -- place to be.
Please day after going to the jobs that John McDonald is the chief technology officer of chef from thank you very much for joining us X.
