Conversation with Josh Sapan; Conversation with John Watson; Conversation with Lucy Kalanithi - Part 1

CHARLIE-ROSE-SHOW-01

ROSE-SHOW-01

Conversation with Lucy Kalanithi - Part 1>

television and media. Sapan has also drawn praise for expanding the

boundaries of the cable television industry. He was the early champion of

video on demand and other distribution channels. He`s newest venture the

documentary series, Take 5, will debut on Sundance Now Doc Club. John

Watson, chairman and CEO of Chevron. Chevron and its peers have been under

pressure since 2014, when oil prices began a steep decline from $100 a

barrel to a low of $26 this past February. The industry is also navigating

increased regulation and environmental policy aimed largely at shaping a

renewable energy future. Lucy Kalanithi discusses life after the death of a

spouse.>

Business; Energy; Environment; Oil; Government; Policies; Economy; Art;

Families; Death>

(COMMERCIAL BREAK)

CHARLIE ROSE, CHARLIE ROSE SHOW HOST: Welcome to the program. We begin this evening talking about the future of television with Josh Sapan. He is the CEO of AMC networks.

(BEGIN VIDEO CLIP)

JOSH SAPAN, AMC NETWORKS CEO: The system is evolving, and many people who have Netflix, or Hulu, or Amazon also have cable television. And it is now supporting many more options and people have shown an appetite for it. So I actually think it is a moment of great diversification, and abundance, and creative brilliance.

(END VIDEO CLIP)

CHARLIE ROSE: And we talk about the future of oil with John Watson, as chairman and CEO of Chevron.

(BEGIN VIDEO CLIP)

JOHN WATSON, CHEVRON CHAIRMAN AND CEO: Fossil fuels, if you think about the last 150 years, all the advancements the living standard, that everything that we enjoy, light, heat, transportation by land, sea, and air, everything we value is coincident with fossil fuels. New York would be dark without fossil fuels. So fossil fuels are important now and will be important for many, many years to come.

CHARLIE ROSE: Many, many years, means in your own judgment?

JOHN WATSON: For the foreseeable future. Now, that doesn`t mean that we can`t develop other forms of energy. Renewables have their place, nuclear has its place, and there will be new technologies that will be developed over time that hopefully will bring us other forms of energy, but they do have to be competitive, from a price point of view.

(END VIDEO CLIP)

CHARLIE ROSE: And we talk about the death of a spouse with Lucy Kalanithi.

(BEGIN VIDEO CLIP)

LUCY KALANITHI, CLINICAL ASSISTANT PROFESSOR OF MEDICINE AT STANFORD: You, that secret life is in death. Now find it air, that once was breath. So he drew it from that. And I remember he write a lot of poetry during the time that he was ill. And we were lying in bed and he was reading this poetry anthology and said, hey, I think I have the title for my book, look at this.

(END VIDEO CLIP)

CHARLIE ROSE: Sapan, Watson, and Kalanithi when we continue.

(COMMERCIAL BREAK)

CHARLIE ROSE: Josh Sapan is here. He is the president and CEO of AMC networks. The network has helped make cable television a destination for high-quality, scripted shows. AMC made a name for itself with the critical acclaimed series, Madmen, and the other, Breaking Bad. AMC networks also own several of the entertainment brands including IFC and Sundance TV. Sapan has also drawn praise for expanding the boundaries of the cable television industry. He was the early champion of video on demand and other distribution channels. He`s newest venture the documentary series, Take 5, will debut on Sundance Now Doc Club, the first 5 instalment of the series will focusing on justice in America, will premiere on May 17th. I`m pleased to have Josh Sapan back at this table. Welcome.

JOSH SAPAN: Thank you so much.

CHARLIE ROSE: Let`s just talk specific first, what`s Take 5?

JOSH SAPAN: Yeah. So it requires a moment of explanations. So we have a new streaming service that`s not a cable T.V. channel.

CHARLIE ROSE: And who doesn`t.

(LAUGHTER)

CHARLIE ROSE: But it`s true. You admit HBO does it and everybody else. Hulu does it.

JOSH SAPAN: That took care of the explanation.

CHARLIE ROSE: No, go ahead.

JOSH SAPAN: Who doesn`t? So it`s a new streaming service. Thank you for helping the explanation. It is called Sundance Now Doc Club, and it arguably has -- perhaps the biggest reservoir and collection of documentaries that, man, has amassed anywhere.

(CROSSTALK)

JOSH SAPAN: I think so.

CHARLIE ROSE: Take 5 has the worlds.

JOSH SAPAN: Well, I think its curative in ways based on documentaries. I think it`s possible.

CHARLIE ROSE: But that was actually a cable channel called, Discovery, formed on that idea.

JOSH SAPAN: Exactly.

CHARLIE ROSE: Way back when.

JOSH SAPAN: Exactly right. And it`s perhaps the case that a cable channel that had ads to support it was not the right formulation for the world`s greatest documentaries that may not have mass, mass, mass appeal, but may have great importance. And so to that end, in addition to this collection and in which we`re adding films, feature films as well. We did our first original series, and our notion was to do something interesting in documentaries and do something timely. And so, what we did is we tried to create, if I can say it this way, what might be the op-ed page of today and tomorrow by putting in the hands of five filmmakers enough money to make five-minute films on one subject, and the subject --

CHARLIE ROSE: On the same subject.

JOSH SAPAN: The same subject.

CHARLIE ROSE: Oh really.

JOSH SAPAN: Yes.

CHARLIE ROSE: Take five great filmmakers.

JOSH SAPAN: Yes, right.

CHARLIE ROSE: . and say to me, this is the subject, go make a movie.

JOSH SAPAN: And the subject is justice in America, what does it mean to you.

CHARLIE ROSE: Right.

JOSH SAPAN: And so we did that. And so we went to five, I will call them emerging documentarians, and we said whatever you think because we at AMC network had a good experience. You mentioned some of our material on the scripted side, by putting ourselves in the hands of the creators. And so we said go do it. And will Jacks deposals of 5 and we will put them out on a streaming service.

(TECHNICAL DIFFICULTIES)

CHARLIE ROSE: Subscription model as a very general revenue contributor?

JOSH SAPAN: Well, that`s primarily what they accomplished I think.

CHARLIE ROSE: But the way they got there is interesting.

JOSH SAPAN: I do think it is interesting, and they deserve full credit for having not only done that, and designed it, and implemented it, but done it with wit and interest. And when, House of Cards, which became their signature.

CHARLIE ROSE: Right.

JOSH SAPAN: . for a period of time. And, Orange is the New Black, in their moment they were defining.

CHARLIE ROSE: Right.

JOSH SAPAN: So I do think that they developed material that was important and took advantage of the technology.

CHARLIE ROSE: And it got everybody`s attention when it was announced that they were going to spend $100 million on an original production, House of Cards.

JOSH SAPAN: Yeah, yeah. There is material in all these services and channels that we or I would envy.

CHARLIE ROSE: Yeah.

JOSH SAPAN: But, we are now more -- and we are competitive with large, but we`re also are companions because one in every two households, more or less, in the United States subscribes to Netflix, and nine out of ten have cable television. So they`re sitting side by side, and people are doing both.

CHARLIE ROSE: Can you factor in for me how many young people I know who say to me, I don`t have a television in my house. All television they watch is either on their P.C., if they still have one, their iPads, or their iPhone.

JOSH SAPAN: Yeah.

CHARLIE ROSE: All television they watch.

JOSH SAPAN: Yeah. There`s no question that there is an increasing -- increasing interest in and reliance on devices that are not in the big living room and anchored. It is -- it will be interesting to see when those younger people start to have families.

CHARLIE ROSE: Yeah.

JOSH SAPAN: . whether their behavior changes a bit.

CHARLIE ROSE: What are we waiting for in television? What is the great thing that somehow is going to transform, beyond everything we`ve talked about in this conversation?

JOSH SAPAN: Hmm... That`s a big question. I have the privilege of asking myself that question and saying that it`s professionally something that I should require myself to answer, but it`s as much fanciful as it is serious, and I think there is, as with many things, probably not in truth.

CHARLIE ROSE: One answer.

JOSH SAPAN: Yeah.

CHARLIE ROSE: Will be evolutionary rather than revolutionary?

JOSH SAPAN: Well, I think it will, but to me is the most interesting way to respond, if I may, is that when technology changes, when things happen and you get a little machine, Charlie, and you`ll get a little screen, and then you`ll get channel capacity that allows you to watch 400 channels, or get 400 channels, when there used to be four. And then when you can watch them in sequence meaning binge, what happens is the content adapts to the technology, and you start to see new forms and stuff. So you see cat`s videos on YouTube, and you see sequential opening to drama because people can pay more attention. I think the show you reference, Madmen, and, Breaking Bad, were aided by people being able to not only watch on linear but able to watch on demand. So what`s most interesting about what`s next is what technology comes next, and what form and what creative genius adapts to make that technology come alive and serve so many interests.

CHARLIE ROSE: Clearly, one thing is going to be video is everything, fair to say.

JOSH SAPAN: Yes.

CHARLIE ROSE: And it`s clearly, if it`s not, it`s a close second. It`s clear that video, I mean, somehow video and search are coming together.

JOSH SAPAN: Yes.

CHARLIE ROSE: You know, so that everybody`s organizing it for us.

JOSH SAPAN: Yes.

CHARLIE ROSE: And here`s what fascinates me, too, and I`m not -- it is the possibility of virtual reality as a storyteller`s tool.

JOSH SAPAN: Yes. You know, I`ve seen virtual reality that is rhapsodic.

CHARLIE ROSE: I know.

JOSH SAPAN: It`s just -- it`s actually -- It`s hard to find words to describe how engaging, inviting, and mesmerizing it is.

CHARLIE ROSE: Yeah.

JOSH SAPAN: And I do think it will give birth to experiences, and actually content experiences, and formulations that were -- didn`t make sense before and were not imaginable.

CHARLIE ROSE: Here`s what I`m going to do, I promise you I`m going to do this, I have argued about this show that we`ve got nothing here but a table, an interesting person, you know, and a few average questions. That`s all we have here. But what it is, is that the viewer likes it because I tell them you`re sitting at the table, you`re sitting at the table, you know, and, therefore, you are part of it. Not really, but that`s what I want them to think because they saw they`re there, and that there. Virtual reality will give you a better way to communicate that than anything. You can sense that.

JOSH SAPAN: Yes.

CHARLIE ROSE: And however you look, you can focus just on you.

JOSH SAPAN: Yeah.

CHARLIE ROSE: You just watch your hands.

JOSH SAPAN: Yeah.

CHARLIE ROSE: You can watch from up above. I mean, it`s just amazing. You are literally at the table.

JOSH SAPAN: Oh, you are literally. You know, I went to a demo of one of the technologies and I was literally falling off the cliff and felt endangered and threatened.

CHARLIE ROSE: For a moment your brain says, if I go there.

JOSH SAPAN: Yeah, correct. So it`s sort of thrilling.

CHARLIE ROSE: It is thrilling.

JOSH SAPAN: Yeah.

CHARLIE ROSE: And you just know -- you don`t know where the future is going to come but, boy, you can`t wait, and you know that the velocity of change in the world today is such that it`s not that far off.

JOSH SAPAN: No, it`s not that far off.

CHARLIE ROSE: No.

JOSH SAPAN: And if you could -- we`ve had success putting money and resources in the hands of the best creative people who can take that new technology, whether it`s nuanced, and modest, or radical as is virtual reality, and bring to the world the next great incarnation.

CHARLIE ROSE: I mean, I just think -- what I love about what the internet has done in terms of all the things we have been talking about, it is in a sense that kind of -- and certainly with YouTube, and certainly with whatever Apple wants to do, and certainly what you`re doing with young filmmakers is the democratization.

JOSH SAPAN: Yeah.

CHARLIE ROSE: People have access to a place that they can create and you can see it. Then they can raise money. They can watch cats. They can do a thousand different things, but they can tell stories.

JOSH SAPAN: Yes.

CHARLIE ROSE: They can tell stories. And if they`re good, a story may be a minute, or five, or two hours, but people with talent now have a place they can raise a bit of money to make it, and they have a place that it can be shown. Maybe it`s not -- it may not be a Hollywood release, but it shows your drive creativity and possibility.

JOSH SAPAN: You know, we`ve just -- we`re with our five filmmakers.

CHARLIE ROSE: Right

JOSH SAPAN: And we had a little forum where they were -- they stimulated a panel and were talking about their five-minute films. And I did go on twitter and the panel was trending, and it was having the desired effect of actually -- and it was on the subject of justice in America, and it was creating an immediate social dialogue around that subject and it was actually thrilling. It was just breathtaking.

CHARLIE ROSE: Would be great if some of that could intrude into the political debate, wouldn`t it?

JOSH SAPAN: Well, I think it should.

CHARLIE ROSE: I`ll leave it as should. So, I mean, when you look at what you`ve done over there, is your favorite program, Walking Dead, Breaking Bad, Madmen?

JOSH SAPAN: Oh, God, it`s hard to answer.

CHARLIE ROSE: But, God, don`t give me some cliche about your children.

(LAUGHTER)

JOSH SAPAN: You know, I would answer it this way. I would say that Breaking Bad was breathtaking and better call Saul, and Vince Gilligan, and Peter Gould, I don`t know if you watched the prequel, as it`s called in T.V. term. But Breaking Bad, which is what happened to these characters, and how they developed for him is beautifully nuanced and rare, and each note is incredibly true. So it resonates, at least for me, wonderfully. We also financed a movie that took 12 years. So maybe it was just the gestation period that me.

CHARLIE ROSE: Was it Boyhood or.

JOSH SAPAN: Boyhood, yeah.

CHARLIE ROSE: Right.

JOSH SAPAN: So we made Boyhood with Richard Linklater. And for me it`s a high point because, maybe, it`s just an exercise in professional patience.

CHARLIE ROSE: Thank you for coming.

JOSH SAPAN: Thank you so much.

CHARLIE ROSE: Pleasure. Back in a moment. Stay with us.

(COMMERCIAL BREAK)

CHARLIE ROSE: John Watson is here. He is chairman and CEO of Chevron. It is among the world`s largest oil and gas companies. Chevrons and its peers have been under pressure since 2014, when oil prices began a steep decline from $100 a barrel to a low of $26 this past February. Production shortages in Nigeria and Canada have contributed to a resurgent market this spring with oil now hovering near $50. The industry is also navigating increased regulation and environmental policy aimed largely at shaping a renewable energy future. I`m pleased to have John Watson at this time at this table. Welcome.

JOHN WATSON: Charlie, thanks for having me.

CHARLIE ROSE: I want to talk -- let`s talk about oil today, and then renewable and where the progress is being made there, and what Chevron is doing. But tell us the dynamics of the fall and rise of oil prices.

JOHN WATSON: Well.

CHARLIE ROSE: Is it simply supply and demand?

JOHN WATSON: At its simplest, it is. But what`s not told is that demand rises relatively predictably over time, but supply comes online in big chunks. So the industry does many long lead projects. And if you get supply and demand a little bit off as you`re building that new capacity, if the economy doesn`t grow as fast or you have disruption in supply, you can get big excursion up.

(TECHNICAL DIFFICULTIES)

JOHN WATSON: Relationships with the government. We work very hard to maintain our relationships.

CHARLIE ROSE: With the Chavez government, and then the successor government.

JOHN WATSON: We deal in long cycle times, and so we work with governments across the political spectrum, including the Chavez governments and the Maduro government today.

CHARLIE ROSE: And the government today your relationship fine with the Maduro government because you have existing contracts?

JOHN WATSON: Yes, we do have existing contracts and existing business. One of the things that distinguishes American companies is we really don`t adapt an ideology, we work with whoever -- whatever government is in power. And so, if it`s illegal for us to do business and we can do business according to our standards, we`ll do business in many different countries around the world, really regardless of the political ideology.

CHARLIE ROSE: Where is new oil being discovered?

JOHN WATSON: Well, new oil, we found it right here in the United States.

CHARLIE ROSE: With shale oil.

JOHN WATSON: I think with shale oil, we found it in old oil fields, actually, in the shale.

CHARLIE ROSE: Because you could access them because it was our zone.

JOHN WATSON: That`s correct. But we`re also seeing oil discovered increasingly in the deep water. I`ve mentioned Brazil, a little bit earlier. We still have discoveries at the Gulf of Mexico, East Africa, West Africa, its discovering oil and gas. So there is oil to be discovered. The arctic has potential longer term.

CHARLIE ROSE: What`s the difference in Chevron and ExxonMobil, other than they have a higher market cap than you do. I think you`re second, aren`t you?

JOHN WATSON: We and Shell are about the same. But in terms of American companies.

(CROSSTALK)

JOHN WATSON: Well, there are a lot of differences. We`re both in the oil and gas businesses but we operate in different areas. We emphasize some different things. Certainly inside the company, we have our own way of doing business, they have their own way. They`re a fine company, but we`re a little different mostly from a portfolio point of view.

CHARLIE ROSE: What do you mean by portfolio? Where your assets are?

JOHN WATSON: Right. For example, we have more business in the upstream exploration and production, they have a little bit more in the downstream in the chemicals business. We have a big business here in the United States. They do as well. They have a big business in Russia. We`re in other countries. I think geographically, and we`ve emphasized different segments of the business.

CHARLIE ROSE: What is your commitment to alternative energy sources? Is that a business you leave the others? Or is it research and development you`re doing every day, you know, with the revenues you have in order to see and make sure?

JOHN WATSON: It`s a mix right now, I would say. We`re the largest producer of renewables now thanks to our geothermal business in Indonesia and the Philippines, and we spent a lot of money doing research on advance biofuels. That has proved to be a pretty tough nut to crack for everyone in that business, so.

CHARLIE ROSE: And so, when someone says to you, what`s the future of fossil fuels, what do you say?

JOHN WATSON: Charlie, fossil fuels, if you think about the last 150 years, all the advancements in living standard, that everything that we enjoy, light, heat, transportation by land, sea and air, everything we value is coincident with fossil fuels. New York would be dark without fossil fuels. So fossil fuels are important now and will be important for many, many years to come.

CHARLIE ROSE: Many, many years, means, in your own judgment.

JOHN WATSON: For the foreseeable future. Now, that doesn`t mean that we can`t develop other forms of energy. Renewables have their place, nuclear has their place, and there will be new technologies that will be developed over time that hopefully will bring us other forms of energy, but they do have to be competitive from a price point of view. And for the time being, it`s going to take natural gas, it`s going to take nuclear, it`s going to take coal, it`s going to take renewables, it`s going to take all those things in order to meet the supply. Remember, the developing world needs all this energy to raise living standards because they aspire to the things that we have.

CHARLIE ROSE: You worried about the instability in the Middle East?

JOHN WATSON: Well, certainly. We`ve seen disruptions and risks in North Africa and the Middle East over the last few years. So, of course, there is concern. Now, I think there is also an interest in coming to reasonable agreements so we avoid conflicts in the future that might disrupt supplies, and importantly, disrupt the drives to improve the standard of living throughout the Middle East and elsewhere.

CHARLIE ROSE: Is the United States energy independent?

JOHN WATSON: Well, the U.S. has -- is blessed with energy. And so, while we still import some oil, we`re now starting to export natural gas. And I would say there is not an energy crisis in that sense. We have abundant supplies available, and we have the potential to produce more.

CHARLIE ROSE: As you know, people try to -- will make the argument, understandably, you know, that we`ve been hostage to the Middle East because of our need for their oil.

JOHN WATSON: I don`t view us as being hostage. Every country has their own competitive advantages. The Middle East happens to have oil. But if you think about it, we have many sources of oil that`s better and available. I don`t see, in a broad sense, that there is any shortage of oil. There are risks. Most of those risks that we talk about are above- ground risks that are there. There is plenty of oil out there. If you think about the three largest producers that I mentioned earlier, Russia, Saudi Arabia, and the United States, those three countries together are only about third of the supply. So there are a lot of other supplies of oil that can be made available.

CHARLIE ROSE: What about Australia?

JOHN WATSON: Well, Australia is a place of big business for us. In our case, it`s natural gas off the northwest shelf of Australia. Two big projects that are coming online over the next two years that will contribute L&G to Asia.

CHARLIE ROSE: Had -- as you`ve been a -- you worked in one place. You have been at Chevron all your life.

JOHN WATSON: I have. I joined Chevron out of school in 1980, so I never thought I would spend 36 years with the company. But I`ve been given different opportunities over time and I just loved it and just kind of stayed.

CHARLIE ROSE: And can you say to the America -- to the global population or the global citizenry that we have done everything that we can -- everything that we can to address climate change and environmental issues?

JOHN WATSON: Oh, no. There`s a lot more we can do. In fact, I think today that we`re largely talking past one another on policy.

CHARLIE ROSE: Explain that to me.

JOHN WATSON: Well, if you think about a week, we have a tendency to talk about one issue at a time. We`ll talk about that we want low energy prices. One minute we`ll talk about we want lower carbon sources and other, but we don`t talk about an integrated policy.

Let me give you a couple of examples, right now, Germany, Japan and the United States are shutting down nuclear power plants. I`m not in the nuclear power business, but if your biggest concern were climate change, would you be shutting down all those.

CHARLIE ROSE: Why are they shutting them down?

JOHN WATSON: Because of the perceived risk of nuclear power. But -- and it`s slightly different in each country. But the point is if carbon emissions are the biggest concern, we should be trying to enable nuclear power, we should be trying to enable natural gas.

New York State doesn`t allow hydraulic fracturing. New York State doesn`t want to permit pipelines across its land and yet those are the principle sources of energy, nuclear power and natural gas that are going to try to restrict greenhouse gas emissions over time.

CHARLIE ROSE: Keystone pipeline, does it make a difference?

JOHN WATSON: Well, pipelines in general make a difference, certainly they do. It`s the safest way to move oil and gas is via pipeline. And there are literally millions of miles of pipeline. We can operate them safely. We have to make sure our standards are high and we do it well.

But to me it`s been unfortunate that with a -- you know, a great ally that we have north of the border that we haven`t allowed a pipeline to bring oil that`s needed in the United States. It just -- it seems like it`s not the right policy, if you believe in low prices, if you believe in promoting economic activity in this country.

CHARLIE ROSE: How would you assess President Obama in terms of how he has been as presidents both in terms of environmental protection, in terms of trade, in terms of wanting to -- commitment to Paris and the kinds of accords that came out of Paris?

JOHN WATSON: Look, certainly we have our differences of opinion, but actually -- there`s actually some common ground. If I point to two areas where there`s common ground, one, on trade.

I went to the University of Chicago. And so I believe in free trade. I believe in the trade agreements, for example, so we have been a supporter of the trade agreements that are out there. If I think.

CHARLIE ROSE: And so is the president?

JOHN WATSON: Yes, and if you think about.

CHARLIE ROSE: And his party was not.

JOHN WATSON: Well, we`ll see where some of these agreements go, but.

CHARLIE ROSE: Well, but I mean he did -- like the candidate of the Democratic Party is not.

JOHN WATSON: Well, that`s what we say today, but in general there is been bipartisan support for trade, that`s what.

CHARLIE ROSE: So what happened?

JOHN WATSON: I don`t know -- I don`t know what`s happened. I don`t think we`ve done a very good job and I mean by "we", I mean business and I mean many in politics haven`t done what we can to show Americans the benefits of free trade.

So the administration, I support them on trade. The administration has supported and confirmed the hydraulic fracturing can be done safely so there are positives. But I will say right now.

CHARLIE ROSE: But the administration is against the pipeline?

JOHN WATSON: Well right now, there have been some decisions that -- we`re throwing a lot of regulations at the business right now. They are rushing out regulations as we speak in the final six months. Just in the last couple of weeks they`ve done so.

CHARLIE ROSE: Give me an example.

JOHN WATSON: A well-controlled rule in the Gulf of Mexico. Our industry has put in place 100 new practices in close collaboration with the government over the last five years since the Macondo incident to improve drilling safety and yet with very little engagement with industry, they rushed out new provisions.

Methane regulations, the cost of these methane regulations is disproportionate to the benefit at any reasonable price on carbon. And so those are two recent examples. But in general, I would say the power has shifted toward regulators in this country.

And I think that`s a risk for the economy. I don`t think it`s a coincidence, Charlie, that we`re seeing sub-par economic growth. One of the common things when I talk.

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