• With: John Watson, Chairman and CEO, Chevron Corporation

    This is a rush transcript from "Your World" May 12, 2011. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST OF “YOUR WORLD”: Well, talk about your dog-and-pony shows. At least someone had the good sense to bring a picture of a dog and pony, because, when it comes to parading out oil CEOs today to rip them over their tax subsidies, more than a few senators barking like asses.

    (BEGIN VIDEO CLIP)

    SEN. CHARLES SCHUMER, D-N.Y.: Do you think anyone who advocates cutting these subsidies is un-American? Yes or no?

    JAMES MULVA, CHAIRMAN AND CEO, CONOCOPHILLIPS: Well...

    SCHUMER: Yes or no, sir.

    UNIDENTIFIED MALE: Are you willing to apologize for what your company...

    (CROSSTALK)

    MULVA: Senator, what I just said, there was nothing intended personally.

    (CROSSTALK)

    UNIDENTIFIED MALE: So you’re not willing to apologize?

    UNIDENTIFIED MALE: And what we have to offer -- what we have to offer, Senator...

    (CROSSTALK)

    UNIDENTIFIED MALE: ... lovely statement, but do you understand how out-of-touch that is?

    (END VIDEO CLIP)

    CAVUTO: It seemed to go well today.

    One of those CEOs fires back, because the Chevron boss is here, and only here.

    Welcome, everybody. I’m Neil Cavuto.

    And, today, the only surprise was what took so long after that long pain at the pump, big oil back in the hot seat, forced to defend big tax breaks, getting more than a few senators hot under the collar.

    To the guy at the center of this oil storm, Chevron CEO John Watson. He was among the CEOs getting grilled today.

    John, I was watching a little bit. You guys weren’t given much of a chance to say anything today.

    JOHN WATSON, CHAIRMAN AND CEO, CHEVRON CORPORATION: Well, Neil thanks for having me on the show.

    There were some theatrics today, but it’s a serious topic. And, so, I was pleased to be able to share some pretty basic messages with Senate members. I told them that we pay our fair share of taxes. I told them that the tax treatment we receive is conquerable, in terms of deductions and credits, to the treatment received by other companies, and all we want is to be treated fairly and equitably, relative to other companies in our industry, both in the United States and abroad, and relative to other industries.

    CAVUTO: Did you feel that you were just part of a kangaroo court, though, that -- I noticed a lot of times, not only could you guys not get out an answer, but that they were more interested in making speeches.

    WATSON: Well, we take the opportunity we get. Sometimes, the comments have to be short. But we try to get our points across. And I think, on balance, we were able to get across a number of key points.

    I think one of the things that I tried to share with Senate members is that, rather than talking about shared sacrifice, we ought to talk about shared prosperity, and the opportunity that our industry has to create jobs, create tax revenue for and -- and ultimately put more supply on the market to keep prices down for consumers. So, I think we got those points across today.

    CAVUTO: Do you think, if you guys weren’t making so much money, and you’re making a lot of money, there would even be a hearing today?

    WATSON: Well, our business is big. And I think that’s -- that’s hard for anyone to understand. When they see billions of dollars in earnings and zeros after numbers, it’s very hard to understand.

    But our business is very big. And while our earnings are high in dollar terms, so is our spending. We’re spending $26 billion this year to try to find more oil and gas around the world and bring it to our customers in the United States and elsewhere.

    And so the scope and scale of our business sometimes is -- is understandably hard for people to understand. It’s a big business.

    CAVUTO: All right. I guess what a lot of these guys are asking, then, making all that money, you certainly don’t need any tax breaks; you don’t need any tax subsidies to hunt for that oil. What do you think?

    WATSON: Well, what we need is tax treatment that’s comparable to what other companies receive.

    Our -- our effective tax rate last year was 41 percent. And, so, we do pay considerable amount of taxes around the world. Chevron’s tax bill last year was about $13 billion. And we pay royalties and other fees on top of that. So, we pay our fair share. And that was the message I tried to get across.

    CAVUTO: One message lost is the fact that you have support from the oddest of circles, including unions. I want to pass along a division of the AFL-CIO co-signing a letter with the American Petroleum Institute. You don’t see them together that often.

    And it reads in part: "We are concerned certain proposals being considered to raise taxes on the oil and natural gas industry could endanger jobs."

    What do you think of that, John?

    WATSON: Well, I think organized labor understands what we do, and that is that we create jobs, and we create good-paying jobs in our business, at our refineries and in our producing operations in the Gulf of Mexico and onshore in this country.

    And we can do more of that. Do you know if we opened more areas for leasing, if we were able to get permits for all the activity that we’d like to be able to conduct, we can create more jobs, and it’s good for labor, it’s good for taxpayers, and it’s good for the American public.

    CAVUTO: What about the Menendezes and others -- I’m talking about New Jersey Senator Menendez, who have argued, look, you have got a lot of lands and areas that you hold that you’re not drilling, and if you were so hot to trot to drill and find oil, you’d tap those puppies, and you’re not. What do you say?