Biofuels Chevron and Weyerhauser team for Catchlight biofuel project

Published on April 23rd, 2013 | by Tina Casey

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

April 23rd, 2013 by  

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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About the Author

specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.



  • batuchka

    I’d rather they ramp up electical energy generation via direct burning of biomass and make electric cars ownership very attractive with rebates, etc

  • vetxcl

    Dumb title to the article which has an OBVIOUS answer. (Only three guesses allowed.)

    And thanks for the links to promising projects.

    So, what IS being done NOW that’s usable???

  • ga

    Large American corporations survive with manipulation of long-term policy. Look at the trans fat battle. No more trans fats in french fries, countless lives saved annually. You’d think the McD and BK would be running ads gloating about their new tasty safe products. They don’t. It’s clear that they don’t want to be hit by another round of regulations for sodium, sugar or whatever. The last thing Chevron needs is to be fueling large numbers of cars and planes in California with biofuels. Such success will only hasten regulators to act.

  • jasavak

    This article makes no sense . Does the $2.18 include taxes ? If Chevron was able to produce a fuel that sold at the pump for $2.18 , why wouldn’t they ? If they wanted a profit of 15% instead of , the price could still be lower than $2.50.

    If the $2.18 doesn’t include taxes or sufficient profit , would enough people be willing to buy the bio-gas at a price higher than standard gasoline ?

  • Scott Wesley

    Oh hell with all that! If you want profitability, then utilizing a biomass system that takes “ANY” pollutant, other then nuclear waste is the answer. MP BioMass can take CO2, petroleum waste, coal ash, MSW, sludge, sewage, animal waste, medical waste, old tires, and even costly woody biomass and convert into a very profitable renewable energy source GUARANTEED. Yes, we have a financial insurer that will guarantee our systems ROI of 5 years or less! We produce so much methanol and oxygen, while also producing electricity that it makes it extremely profitable for investors and end users. With an International patent even in China, and our first commercialized plant placed in Serbia in 2003. With all of the pure 99% methanol we produce, we could make that $2.18 gasoline become $1.98 gasoline! Please visit http://www.mpbiomass.com

    • Bob_Wallace

      When did you start commercial production, Scott?

      What is your annual output?

    • Bob_Wallace

      Checked your website like you asked Scott.

      Interestingly that in your press release stuff you post a piece about your company and Andrea Rossi’s E-Cat.

      And absolutely nothing about shipping product, customers, no attention from the legitimate business community at all.

  • The biofuels industry will make in roads by targeting higher value chemicals. Why target a $4/gallon fuel, when you can just as well go after a $6, $8, $10/gallon specialty chemical instead? Check out companies like Solazyme and Codexis. After these companies tap the most profitable markets then they will turn their attention to lower margin fuels. Cheveron was thinking in terms of penetrating a high volume, low profit market. It could be profitable, but not to the tune of 20% ROI. The profit margin for things like cosmetics, lubricants, pharmaceuticals and nutriceuticals are much higher than that. It’s fine with me if Chevron wants to pass on markets they deem as too small to interest them, but that is where the future giants of biofuels will cut their teeth.

    • Bob_Wallace

      Good point. Solazyme uses algae to produce an oil product, Codexis uses plant waste.

  • Bob_Wallace

    Chevron can’t patent the idea of intercropping in tree plantations. And we’ll keep farming trees for lumber. Between intercropping and timber waste it should be possible to keep feedstock headed to processing.

    What this looks like to be is a good source for liquid fuels for those applications needing a lot more power per weight/volume than batteries are likely to provide. In particular long distance air travel and ocean shipping.

    If the fuel pencils out at less than $4/gallon then we’ve got one more piece of the puzzle.

    We probably can’t replace all, or even a large percentage of our current oil usage with plant-gas. But luckily we can do our driving for far less than $2/gallon with electricity. And we can move our rail to electricity as well as put moderate length air travel on rails.

    If the oil companies like Chevron can make 15%+ from oil operations then it’s too soon for them to start moving their capital to other less profitable activities. But the risk they take is that other companies will become well established and there will not be enough room for them to crowd in later on.

    • ga

      Put aviation on bio-fuels and upgrade fleets to nextgen platforms and turbo-props for <700mile routes. Building new long haul passenger rail is an unbelievable waste of money. Tax the heck out of carbon and it all works out.

  • beernotwar

    Even from a business perspective this is short-sighted. They could keep people burning fuel with internal-combustion engines longer if the price went down and people thought it was “green.” With sales for EVs increasing we will reach a tipping point before long where people realize it no longer makes sense to use this dirty means of locomotion at all. They’re hastening the day that they can’t sell a gallon of gas — dino or bio — to anyone.

  • Otis11

    Also, there might be an issue with finding enough usable land to grow trees. Still not a reason to kill it, just might not be able to bring down gas prices as low as calculated.

  • Otis11

    Easy fix – restrict carbon. If the price of carbon is high enough, the profits for FFs will shrink. Profits shrink, incredible R&D work goes on to find new avenues for profit. As long as these are long established companies, it won’t hurt them substantially… actually, it’s likely to make them more competitive in the long run.

  • earlrichards

    To understand the sleaze-side of Chevron, see, http://www.truecostofchevron.com.

  • JustSaying

    Yes, we need to remove all the government support to fossil fuel, and add some “sin” taxes. So that their less profit to be made in oil/coal/gas. Then the money would move toward helping keep the world a place where humans can live.

    • i love your repetition of the need for “sin” taxes — repetition is a crucial element of good messaging/communication. 😀

      keep it up! 😀

  • James Wimberley

    The crucial datum here is the high profitability of Chevron’s existing oil-based operations. The same reasoning is presumably behind BP’s exit from solar. The logic is a “tragedy of the private domain”: the highest profits come from exploiting a short-term resource until the whole thing blows up. The fossil industries won’t adapt like the carmakers, they are choosing to go extinct.

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