Global Warming - Renewable Energy

2005 – Chevron Texaco Corp.

WHEREAS:

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

§ According to Clean Edge research, solar photovoltaics will grow from a $4.7 billion industry in 2003 to more than $30.8 billion by 2013. Wind power will expand from $7.5 billion in 2003 to approximately $47.6 billion in 2013. And the fuel cell and distributed hydrogen market will grow from a $700 million industry today to $13.6 billion over the coming decade. Combined, these three high-growth clean-energy markets have expanded from $9.5 billion in 2002 to $12.9 billion today, or a combined annual growth rate of 36%. By 2013, solar PV, wind power, and fuel cells and hydrogen infrastructure will represent a $92 billion market.

§ Seventeen states including California (20%), New York (25%) and Maine (30%) 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.

§ 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 are facing unprecedented pressure to reduce emissions and meet clean energy demands. Countries implementing the Kyoto Protocol have committed to significant reductions.

§ New laws 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 international competitors, Shell and BP, have significantly increased their development of renewables.

§ Goldman Sachs predicts renewables will have “a significant impact on the [oil and gas] industry” but notes that spending, to date, is insignificant relative to existing operations.

§ “With prices for the fossil fuels used in conventional power plants hovering near record levels, wind power is the cheapest source of energy that can be built now” (WSJ 10/14/04).

§ ChevronTexaco reports an average of $110 million annually on investments in renewables from 1999-2003; this initial step into renewables is promising but is nowhere near the scale of investment made by some of our competitors and we believe is insufficient to meet the needs created by growing political mandates.

§ ChevronTexaco has not disclosed to 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, 2005 explaining how the company will respond to rising regulatory, competitive and public pressure to significantly develop renewable energy sources.

Supporting Statement

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 climate-constrained energy markets.

Sponsors:

Lead: Sisters of St. Dominic of Caldwell, NJ, Sr. Patricia Daly Executive Director; American Baptist Home Mission Society; Benedictine Sisters; Catholic Healthcare West; Christian Brothers Investment Services; Congregation of the Holy Cross, Southern Province; Congregation of the Passion-East; Congregation of the Passion-West; Dominican Sisters of Hope; Dominican Sisters of San Rafael, CA (Congregation of the Most Holy Name); Episcopal Church - Exec. Council; Maryknoll Fathers and Brothers; Mercy Investment Program; Missionary Oblates of Mary Immaculate; Providence Trust; Religious of the Sacred Heart of Mary; School Sisters of Notre Dame Cooperative Investment Fund; School Sisters of Notre Dame of St. Louis; Sisters of Charity of St. Elizabeth, NJ; Sisters of Mercy Reg. Community of Detroit Charitable Trust; Sisters of St. Francis of Philadelphia; Sisters of St. Joseph of La Grange, Illinois; Sisters of St. Joseph of Wheeling; Sisters of the Holy Names of Jesus and Mary, Washington Province; Sisters of the Humility of Mary; Sparkill Dominicans; Ursuline Sisters of Tildonk, US Province