Renewable Energy

WHEREAS:

Global mandates and goals for renewables are growing. Renewables are the fastest growing segment of the energy market.

The annual global development of wind and solar resources exceeds 25%. From 1992-2001 global wind capacity grew from nearly 2,300 MW to over 23,000 MW - a ten-fold increase, while solar photovoltaics capacity grew nearly 400% from 370 MW to over 1,800 MW.

Several U.S. states including Texas (3%) and California (20%) have renewables requirements for electricity production. The U.K. adopted a 20% requirement for renewables by 2020; six other countries have proposed or implemented mandates.

In addition, the E.U. has a goal of 22% renewables by 2010, and six European and Middle Eastern countries have goals ranging from 3% to 100%. Recent forecasts indicate clean energy markets will grow to $82 billion by 2010.

International energy companies will face unprecedented pressure to reduce emissions and meet clean energy demands, since 178 countries have signed the final emissions reductions rules for the Kyoto Protocol. Although US operations will not be subject to these requirements, our company will be subject to them in the countries that have ratified Kyoto. New laws will require both reductions in operational emissions, and utilizing or offering alternative low-carbon alternatives. Failure to do so may result in expensive requirements to purchase carbon credits while competitors with efficiencies such as renewables will generate a new revenue source through the sale of excess credits.

Two of our main international competitors, Royal Dutch/Shell and BP, have significantly increased their development of renewables.

In July 2002, BP announced its goal of being "a new company able to offer global energy solutions" through gasoline and diesel producing lower emissions and becoming "the world's leading producer of solar power." BP stated in a March 11, 2002 press release that "BP would continue to expand its solar business which is set to grow by 40% this year and already has a 17% share of the world market."

Chevron Texaco's initial step into renewables is promising but is nowhere near the scale of investment made by some of its competitors and we believe is insufficient to meet the needs created by growing political mandates.

ChevronTexaco has not told shareholders how it intends to keep pace with its competitors or how it intends to meet growing regulatory pressures for renewable energy.

RESOLVED: Shareholders request the Board to prepare a report (at reasonable cost and omitting proprietary information) by September 1, 2003 explaining how the company will respond to rising regulatory, competitive and public pressure to significantly develop renewable energy sources.

Supporting Statement
Chevron Texaco has partial ownership in a 22.4 MW wind farm, and appears to have some other investments, although small in comparison to BP and Shell. Supporting this resolution will indicate shareholder desire for full disclosure of the company's strategy to meet growing demand for diversified energy sources and to remain competitive in the new Kyoto Treaty-constrained energy markets.

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