Watson: US Should Move Forward with LNG, Crude Exports

Resource-rich countries also see they need competitive fiscal terms to attract capital and investment.

“There’s no shortages of resources,” said Watson, adding that Chevron can now operate in more countries today than in all of Watson’s time with the company.

However, restraints remain above the ground on oil and gas investment in some parts of the world. Watson said he was glad to see Mexico and Argentina improving their fiscal terms to attract investment, noting that Chevron would not have invested $80 billion in Australia if the country didn’t have a stable government and policies.

“The new reality for consuming governments is that the conditions and fiscal terms have to be right to attract investment,” said Watson.

These include transparency, a straightforward permitting process, and a tax environment conducive for investment.

In the new reality, the consumer is the ultimate party that has an interest in energy policies, given that energy will be more expensive, Watson said. In this reality, subsidies for energy resources are not sustainable indefinitely. Germany and the UK have rolled back subsidies, and Indonesia had to raise prices for its consumers to reduce costly government subsidies.

Pointing to the growing income disparity in the United States, Watson said that many energy policies actually promote income disparity. While the wealthy can afford to pay more for energy, the poor bear the greatest burden of energy subsidies.