Where oil refineries once stood in California and Wyoming, Chevron has begun testing seven emerging photovoltaic solar technologies, and the company's first wind farm recently started churning out power for the local grid.
Meanwhile at a Mississippi tree farm, a forest-products company, under a research joint venture with Chevron, grows switchgrass to advance second-generation biofuels that use cellulose instead of corn or other food crops. And in Indonesia and the Philippines, Chevron taps boiling brine from deep in the earth to generate more than 1,250 megawatts of electricity for thousands of homes, making Chevron the world's largest geothermal power producer.
Promise and Pragmatism
Renewable energy technologies such as these are hailed as sustainable alternatives, full of promise to provide clean, new energy and cut carbon emissions. But because of major technical hurdles — such as scalability, performance and costs — as well as market-based barriers, broader adoption can't happen overnight.
So Chevron pursues a strategy to promote energy efficiency while exploring renewables as a viable enterprise, according to John McDonald, Chevron vice president and chief technology officer.
World Energy Demand
"The world is going to need every molecule and electron of energy from all sources," said McDonald. "Our focus is on new sources that are feasible from a business standpoint, such as geothermal power and energy efficiency. The key is to find and develop those technologies that show promise not just in the laboratory but in the commercial marketplace as well."
Global demand for oil is approaching 88 million barrels per day, according to a recent International Energy Agency (IEA) report. Indeed, from 2007 to 2030, demand for energy of all kinds is forecast to increase nearly 40 percent, as reported in IEA's 2009 World Energy Outlook. Fossil fuels will meet most of that new demand, but IEA forecasts that renewables can increase their contribution in the years ahead.
Chevron's Strategy
"Renewables can play an important role in the world's future energy mix if we can unlock the secrets to providing them on a very large scale and at affordable prices," said Des King, president of Chevron Technology Ventures, the company's Center of Excellence for renewables strategy, research and development.
As part of its major business strategies, Chevron seeks to integrate renewable energy technologies into its business — including installing them at former operations sites — to improve its own operations, with a goal of reducing both costs and greenhouse gas emissions.
Chevron funds research and alliances with universities and government research facilities, including the U.S. Department of Energy's National Renewable Energy Laboratory, to evaluate, test and apply these technologies. The company is actively involved in developing selected renewables — such as biofuels — that could complement its established capabilities in refining and fuel distribution.
Additionally, through Chevron Technology Ventures, Chevron's venture capital arm, the company invests in emerging technologies and promising startups.
"We make sound investments in research and testing in real-world applications to help solve tomorrow's energy challenges," said King.
Driving Energy Efficiency
Some technologies are ready now. Chevron Energy Solutions Co. (CES) is one of the United States' leading energy efficiency and renewable energy services companies and the nation's largest developer of solar installations for education facilities. CES develops and builds sustainable energy projects that increase energy efficiency and renewable power, reduce energy costs and deliver reliable, high-quality energy. Consistent with Chevron's renewable energy and energy efficiency strategy, CES helps its customers, including Chevron, reduce their own energy use and find ways to put renewable power to work.
"Energy efficiency is the cheapest, cleanest and most plentiful source of 'new' energy we have," said Jim Davis, president of CES. Citing a McKinsey & Co. study, he noted that with a positive investment climate and a national commitment, the United States could reduce energy consumption up to 23 percent by 2020. "That would save about $1.2 trillion and reduce greenhouse gas emissions by an amount equal to that produced by all the nation's cars and trucks."
$1 billion in Energy Savings
CES has developed hundreds of projects that in aggregate are reducing customers' energy costs by nearly 30 percent on average, saving a total of more than $1 billion and reducing greenhouse gas emissions by more than 3 million metric tons since 2000. Customers include U.S. cities, counties, states and the federal government, school districts, community colleges, universities and correctional facilities.
Meanwhile, a corporatewide initiative has lowered Chevron's own energy consumption per unit of output by 31 percent since 1992, the baseline year. And the company has endowed the Chevron Chair in Energy Efficiency at the University of California, Davis, committing $2.5 million to help lead to the commercialization of new energy-saving technologies.
Integrating Renewables
Pursuing beneficial reuse, Chevron this year started generating renewable power — enough for about 4,400 homes — with 11 wind turbines on a former oil refinery site near Casper, Wyoming.
At a similar site near Bakersfield, California, Chevron's Project Brightfield is testing seven emerging photovoltaic technologies to see which performs best. The results will help Chevron evaluate solar technologies for a variety of uses across the company. Power from the arrays will meet a small share of electricity needs at a Chevron oil field.
"This is one of the first projects to demonstrate solar technology on a reclaimed industrial site," said Jerry Lomax, Chevron Technology Ventures vice president for emerging energy. "We hope what we learn here will be a bridge to a future with more renewables."
Meanwhile, at a Chevron Mining Co. reclamation project near Questa, New Mexico, the company is building a concentrating solar power installation. The largest of its kind in the United States, the 1-megawatt facility will use lenses that intensify strong alpine sunlight to feed high-efficiency photovoltaic cells.
"The demonstration will help us understand the benefits of this technology and determine its applicability in other Chevron operations and properties," said King.
Seeking Biofuels Synergies
The company is pursuing another promising renewable energy prospect: biofuels.
For decades, ethanol — an alcohol fuel made from corn and sugar cane — has been successfully blended into gasoline in large volumes in the United States, Brazil and other countries. But first-generation biofuels feedstocks often compete for food needed by humans and livestock.
Chevron's biofuels research alliances focus on new feedstocks — such as nonedible plant materials and algae — and on process technologies for converting this nonfood biomass into transportation fuels at commercial scale.
From Seed to Scale
One example of a promising commercial partnership is Catchlight Energy LLC, Chevron's 50-50 joint venture with forest-products giant Weyerhaeuser Co. Catchlight is working to commercialize advanced biofuels made from forest-based biomass. Formed in 2008, Catchlight combines Weyerhaeuser's forest biomass expertise with Chevron's fuel processing and distribution capabilities to form a potential "from seed to scale" advanced biofuels supply chain. Biomass production could include intercropping — growing and harvesting biomass between tree rows in Weyerhaeuser's vast, managed forests.
"It's especially important to assess a variety of biomass sources because enormous quantities will be required to meet the potential demand for biofuels," said King. "And any new biomass initiatives need to incorporate the three major components of sustainability — environmental protection, economic feasibility and the minimization of social impact."
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