Why Chevron Won’t Make Bio-Gasoline For $2.18 Any Time Soon

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If you think of a sustainably managed forest as one immense field of renewable oil, that goes a long way toward explaining why a global oil corporation like Chevron would team with the forest products giant Weyerhaeuser, in a venture to develop a cost-effective, sustainable biofuel from woody biomass. The venture is called Catchlight Energy, and so far the forest-to-fuel model looks promising. It’s so promising, according to a new report in Bloomberg, that Catchlight is on track to produce bio-gasoline at a competitive price of about $2.18 per gallon. That’s the good news…

Chevron and Weyerhauser team for Catchlight biofuel project
Forest by Lars Plougmann.

The Chevron Biofuel Adventure

The bad news, as described by Bloomberg reporters Ben Elgin and Peter Waldman, is that Chevron has shelved the Catchlight project.

As it turns out, what looks great for consumers and the environment isn’t nearly so wonderful for a global corporation.

They cite former Chevron VP of biofuels technology, Paul Bryan, who explains that Chevron found that it could squeeze a far greater return out of its current operations than it could from Catchlight, leaving it with no immediate incentive to explore safer, more sustainable ways to produce the same product.

California Carbon Mandate Under Fire

From the Bloomberg account, it looks pretty clear that Chevron got all excited about the prospects for making a nice pile in renewable biofuel in the later years of the Bush Administration, and they did a pretty thorough job of exploring all the angles, but when the rate of return didn’t match expectations they backed off.

That’s fair enough as far as the company’s baseline responsibility to its shareholders goes. Though Catchlight was expected to turn a respectable profit of 5 to 10 percent, that doesn’t stack up so well against Chevron’s average of 17 percent for its capital investments.

However, Chevron has taken things a step farther. Along with ExxonMobil, the company has been lobbying to delay the phase-in of California’s new rules for carbon emissions.

So, it’s back to the same old oilfields, for the time being at least.

A Model For Sustainable Biofuel And Green Jobs

That brings us back around to the forest-as-oilfield concept. In terms of sustainability, the key element of the Catchlight Energy biofuel model is its use of biomass culled from forests that are already being managed for lumber and other conventional forest products. The idea is to “intercrop,” which consists of planting strips of annually harvested biofuel crops such as grasses, shrubs and fast-growing trees between strips of slow-growing trees destined for conventional use.

While not without additional impacts on a managed forest, that piggyback approach is generally more sustainable than moving production into fresh habitats (that’s assuming, by the way, that Weyerhaeuser would not expand its holdings into virgin forests to accommodate intercropping).

If this sounds familiar, it dovetails with the Obama Administration biofuel model of using excess agricultural waste, or marginal croplands, for biofuel feedstock rather than pushing food crops aside or developing new farmland. One promising example of the marginal lands approach is the shrub willow biofuel project spearheaded by Cornell University, which is enabling property owners to squeeze a little more juice out of their land and opening up new paths for job creation in rural areas.

That kind of sustainability twofer is also at work in the Administration’s Re-Powering America’s Land initiative, which aims to use brownfields and other classified sites for renewable energy production.

The End Of The Road For Catchlight

Between Weyerhaueser’s forestry infrastructure and Chevron’s marketing and sales infrastructure, the supply chain was all set up for a profitable operation. The last key to the puzzle, of course, was the conversion technology itself.

The plan was to work with a third party to develop and license a cost-effective process for converting woody, non-food biomass (cellulosic biomass) on a commercial scale by 2014.

And, that’s where things stalled out. According to Bloomberg, Catchlight still exists on paper but the $400 million development project was shelved three years ago.

One Step Backwards, Two Steps Forwards

Jim Lane at Biofuels Digest tipped us to this story last week, and it caught our eye under the heading “Who Killed $2.18 Gasoline?”

That’s no accident, if you’re familiar with the 2006 documentary “Who Killed The Electric Car?” The film chronicles GM’s pioneering EV1 electric vehicle, introduced in California in 1996 to meet a state air quality mandate. Though EV1 was a hit with consumers, a loophole in the law enabled GM to end the EV1 experiment by 2004.

Part of the issue, as described by filmmaker Chris Paine, is an almost precision echo of the too-good-for-its-own-good problem that stymied the Catchlight venture: GM managers foresaw that electric vehicles would need far less maintenance and repair that gas vehicles, and that would cut into the company’s profit from the replacement parts market.

That’s how Lane sees it:

“Here’s the pattern: bend to public will when mandate efforts become popular, establish big projects, hire top R&D talent and bottle up IP to prevent technology spread, kill off the projects with absurd profit requirements, cite lack of feasible technology as a reason to kill or delay mandates, and then lobby like crazy to get back to the status quo.”

Well, not to end on a totally gloom and doom note but sometimes there is a happy ending. Not too long after the last (almost) EV1 was sent to the crusher yard, GM went on to develop the popular Chevy Volt gas-electric car. Rumor has it that the company is working on a 200-mile extended range all-electric car, and it has emerged as a key player in the Obama Administration’s efforts to develop sustainable fuel cell electric vehicles.

So, what now, Chevron?

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Tina Casey

Tina specializes in advanced energy technology, military sustainability, emerging materials, biofuels, ESG and related policy and political matters. Views expressed are her own. Follow her on LinkedIn, Threads, or Bluesky.

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