Chevron Forms New Biofuels Business Unit

Chevron Corporation said it has formed a biofuels business unit to advance technology and pursue commercial opportunities related to the production and distribution of ethanol and biodiesel in the United States.

Chevron officially announced the business unit yesterday in Galveston, Texas, where the company is participating in a groundbreaking ceremony to inaugurate construction of one of the first large-scale biodiesel plants in the U.S. Participating in the ceremony will be Senator Kay Bailey Hutchison; Lyda Ann Thomas, mayor of Galveston; Donald Paul, vice president and chief technology officer, Chevron Corporation; and William J. Berger, chairman of the board, Galveston Bay Biodiesel.

"Biofuels are a growing component of the world's energy base and will be an active part of Chevron's efforts to help diversify the world's energy supplies. Chevron's capabilities and experience in producing and distributing high-quality fuels make us ideally positioned to pursue opportunities in this sector as it expands," said Donald Paul.

The biofuels business unit will operate within Chevron Technology Ventures (CTV), a corporate subsidiary dedicated to identifying, developing and commercializing emerging energy technologies. Chevron will leverage its broad portfolio of existing technological capabilities and assets to the company's efforts in this area.

Mike Wirth, executive vice president, Downstream, said, "Chevron is already active in biofuels, with our marketing assets and experience blending ethanol in our gasoline. We are enthusiastic about the opportunity to further extend biofuels across Chevron's integrated operations."

In the United States, Chevron currently blends about 300 million gallons of ethanol per year for use in gasoline blends. In January, the company announced it is participating in an E85 demonstration project with the state of California, General Motors and Pacific Ethanol. The project will study performance, efficiency and environmental issues over a one-year period using California-formulated E85, a renewable fuel comprising 85 percent ethanol and 15 percent gasoline.

Earlier this month, Chevron announced its investment in Galveston Bay Biodiesel (GBB). This Houston-based company is constructing a biodiesel production and distribution facility in Galveston, scheduled for completion by the end of 2006. The facility will have the potential to produce 100 million gallons per year of this clean-burning renewable fuel – an amount that would more than double biodiesel production in the U.S. which totaled 75 million gallons in 2005.

GBB will produce biodiesel from soybeans and other renewable feedstocks and is expected to have initial production of 20 million gallons per year. GBB has the option to sell pure biodiesel or biodiesel blended with off-road or on-road diesel into marine, commercial, trucking and industrial markets in the Galveston and Houston metropolitan areas.

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Posted 01/06/06

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