Chevron said traditional oil and gas companies had not yet participated in the rapid growth of the biofuels industries, and that its new biofuels marked a “rare” commitment to biofuels from a major oil company.
The new unit was announced at the official groundbreaking ceremony for a new biodiesel plant in Galveston, Texas.
The plant will be built by Galveston Bay Biodiesel, a company in which Chevron took a 22% stake last month.
The plant will have an initial capacity of 20 million tonnes per annum of biodiesel, made from soybeans and other renewable feedstocks. Chevron said the plant would have the capability of expanding its operations to 100Mtpa at a later stage.
"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 vice president and chief technology officer Donald Paul said.
"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."
The biofuels business unit will operate within Chevron Technology Ventures, a corporate subsidiary dedicated to identifying, developing and commercialising emerging energy technologies.
CTV negotiated the investment in the Galveston biodiesel project.
Chevron executive vice president (downstream) Mike Wirth said the company was already active in the marketing of biofuels through its blended fuel products, and greeted the commitment to move into production through a dedicated business unit.
"We are enthusiastic about the opportunity to further extend biofuels across Chevron's integrated operations," Wirth said.
Closer to home, Chevron holds a 50% stake in Caltex Australia, which has an offtake agreement with ethanol producer Dalby Bio-refinery and is negotiating further uptake agreements with independent Australian biofuels producers in New South Wales and Queensland.
A Caltex spokesperson said its commitment to the Australian government's 2010 biofuels production target of 350 million tonnes per annum would be met through these uptake agreements in the sale of Caltex-branded biofuels, rather than direct participation in production.
Caltex Australia is already selling blended fuels, containing ethanol produced from sugar and grain, in about 40 Queensland service stations.
