U.S. lawmakers "vastly overstate" how quickly business can reduce carbon emissions, and they could risk an economic collapse if unrealistic reduction mandates are imposed, Chevron Corp. CEO Dave O'Reilly said Thursday in Boston.
"Seeking those reductions without any realistic plan to replace that energy is a straight path back to a preindustrial economy and a standard of living to match it," O'Reilly told an audience at the Boston College Chief Executives Club.
Cutting emissions 20% by 2020 and 80% by 2050, "sounds good" but is not realistic, he said, and it may be years before there are enough alternative energy resources to offset reliance on fossil fuels like natural gas, oil and coal.
"The more you look at it, the more you realize this," said O'Reilly. The cap-and-trade system now being considered by Congress "is going to be an enormous administrative burden...I'm somewhat skeptical about the effectiveness of the cap-and-trade program as I see it presented currently in Congress...if you liked credit derivative swaps, you're going to love cap-and-trade."
Congressional hearings on the proposed American Clean Energy and Security Act of 2009, which includes cap-and-trade legislation, have been held in the past few weeks (see NGI, April 27; April 6).
Signs indicate that the recession may have hit bottom, but don't expect a substantial rebound before the end of the year, O'Reilly said.
"I do think it will take most of 2009 before we get all of this behind us," said the CEO. "There is some sense that we are skating along near the bottom in some places, and I hear people talking about 'green shoots,' but as long as unemployment continues to rise, I think it will be hard to see consumer confidence build enough to have a sustained recovery."
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