Chevron Creates Biofuels unit

SAN RAMON, Calif (AFX) - Chevron Corp 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 US.

In Galveston, Texas, the company held a groundbreaking ceremony to inaugurate construction of one of the first large-scale biodiesel plants in the US.

'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.

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 US, Chevron currently blends about 300 mln 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 pct ethanol and 15 pct gasoline.

In May, 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.

GBB will produce biodiesel from soybeans and other renewable feedstocks and is expected to have initial production of 20 mln gallons per year.