Chevron Makes Final Investment Decision to Construct Gorgon Natural Gas Project

Emerges as One of the World's Largest Natural Gas Developments

Hey folks,

Happy Tuesday to you. Since it is Tuesday, it's time to check in From the Energy Front. This is where we discuss anything and everything energy related. This week I want to talk about Chevron. Last week they released THIS press release.

Chevron Makes Final Investment Decision to Construct Gorgon Natural Gas Project

SAN RAMON, Calif., September 13, 2009 - Chevron Corporation (NYSE: CVX) today announced that its subsidiary, Chevron Australia Pty Ltd, will proceed with the development of the Gorgon natural gas project offshore Western Australia. Development proposals for the project were approved today by the Western Australian State Premier the Hon. Colin Barnett, MLA, and production licenses were granted by the Australian Minister for Resources and Energy the Hon. Martin Ferguson AM, MP.

"With a total resource base of more than 40 trillion cubic feet of gas and an estimated economic life of at least 40 years, Gorgon will be a major contributor to our company's future growth," said Chevron Chairman Dave O'Reilly.

"Gorgon adds significant long-term reserves and production for Chevron, bolstering our strong resource replacement and underscoring the importance of Australia to our growing natural gas business," said George Kirkland, executive vice president, Global Upstream and Gas, Chevron Corporation.















The Gorgon Project, operated by the Australian subsidiary of Chevron (50 percent*) in joint venture with Australian subsidiaries of ExxonMobil (25 percent) and Shell (25 percent), is currently estimated to cost AU$43 billion (US$37 billion) for the first phase of development. First gas is planned for 2014.

OK stop for one second. Let's look at that again. It is going to cost Chevron, $37 billion for just the first phase. That is hardly a drop in the buck. This is a gamble of the possibility of future returns based on solid Science.

The Greater Gorgon Area's projected natural gas resources are equivalent to 6.7 billion barrels of oil. The project's scope includes a three-train, 15 million-metric-ton-per-year liquefied natural gas (LNG) facility and a domestic gas plant.

The project underwent a rigorous and thorough environmental assessment that culminated with some of the most stringent conditions imposed on a major project anywhere in the world. The project is expected to have the world's largest carbon dioxide injection system and be a global leader in underground carbon dioxide injection technology.

The technology would allow Carbon Dioxide to be captured and injected deep underground in Geologic Formations, where it would remain trapped, instead of being released into the Atmosphere. That is EXTRA. All that costs more money than most of us would ever see in a lifetime. Stick with me on this. Back to the press release.

Chevron Corporation is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company's success is driven by the ingenuity and commitment of approximately 62,000 employees who operate across the energy spectrum. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels and other renewables. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.

Let me repeat. "Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels and other renewables."

I repeat again, what is Windfall Profit? Do you even know what that means? Seriously. Not being sarcastic here. Do you? That means you do nothing to gain profit from something. In other words, winning the Lotto, receiving an unexpected inheritance, the Government taxing Big Oil, ETC. Many trace this back to Colonial Times. The British Government controlled how much and what kind of wood they could use. However, if a storm came through and knocked down a bunch of trees, they could use them due to that being an act of God.

So? Chevron? "Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels and other renewables." Hardly sitting back and doing nothing not to mention employing 62,000 plus jobs. Think about that next time you hear they are making Windfall Profits.

The Gorgon Natural Gas Project is a HUGH deal. Not just for Chevron, but for YOU as well. Regardless of what the Chicken Little {GWBS} crowd tells you, more supply equals lower demand, equals lower cost to YOU.

Imagine the possibilities, if we just allowed them and others, to drill HERE.
Peter