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2002 ChevronTexaco Corporate Responsibility Report Environmental IssuesEnergy EfficiencyBackground: Focusing on Efficiency and ConservationIn addition to being an energy provider, ChevronTexaco is also anenergy consumer. Like all companies, we use energy to run our operationsand transport our products. Energy efficiency and conservation –on the part of ChevronTexaco, other companies and society as a whole– is essential for ensuring future access to energy at reasonable costs.Improving the energy efficiency of our operations is also one of our keystrategies for managing our greenhouse gas emissions. Our focus onenergy efficiency applies to all aspects of our business, from extractingoil to managing our office buildings.Approach: Tracking the Efficiency of All OperationsTo track our performance, in 1991 we established an energy usageindex, now called the ChevronTexaco Energy Index (CTEI). The indexmeasures and represents in a single figure the energy required to produceour products today compared with the energy that would havebeen required to produce the same products in the base year. Our operationsare included in the index by multiplying an output measureclosely related to energy consumption – such as cargo ton-miles for ourshipping company or square foot of building space managed for ourreal estate company – by a unit energy consumption factor from thebase period.Each percentage point reduction in the CTEI represents approximately10 million gigajoules (GJ) less energy consumed, and it also equalsapproximately US$35 million in savings for the company based onworldwide energy usage and costs in 2003 (Note: These numbers cannotbe used to analyze past years’ performance due to changes in businessesand activities that make up the index). In the past, CTEI coveredonly ChevronTexaco’s North American operations. But in 2002 theindex was expanded to cover our international operating companies,and by the end of 2003, it will cover all assets we operate worldwide.We employ a full-time Corporate Energy Coordinator responsible foroverseeing the company’s energy measurement efforts, as well as leadingBest Practice Energy Teams to expand our knowledge and practices forcontinually improving our energy efficiency.ChevronTexaco Energy IndexPerformance: Striving1992–2002for the Highest Efficiency100ChevronTexaco’s total energyconsumption for the assets we80operate was 825 trillion BTUs60or 782 million GJ in 2002.Rather than total use data,40however, the primary performanceindicator we use200internally is the92 93 94 95 96 97 98 99 00 01 02ChevronTexaco Energy Index.The index allows us to measurethe energy efficiency of our operating companies on a commonbasis and assess trends in efficiency improvements, rather than energyuse alone.In 2001 and 2002, our operations reached their most efficient level sincethe inception of our Energy Index. We steadily have improved ourenergy efficiency over the last decade, and in some businesses we havemade dramatic progress. For example, since 1991, Chevron’s NorthAmerican Products business units have reduced their energy consumptionindex by 21 percent. This represents a nearly 2 point-per-year averageimprovement, compared with a 1 point-per-year average for theU.S. refining industry as a whole over that time period.Future Goals: Aiming for Continual ImprovementOur goal is to continue to improve our corporatewide energy efficiencyin the future. In 2004, we will work to better manage the factors thatinfluence energy efficiency in the business units we have recently addedto our index. ChevronTexaco’s North American refining operations alsohave joined with other American Petroleum Institute member refiningcompanies in committing to an industrywide 10 percent improvementin energy efficiency between 2002 and 2012.We also work with others to help them improve their energy efficiency.Through Chevron Energy Solutions, a subsidiary of ChevronTexaco, wedesign, arrange for third-party financing and construct energy efficiencymeasures and cogeneration facilities for commercial, industrial and publicsector customers.© 2003 ChevronTexaco Corporation. All Rights Reserved.37