The world needs all forms of energy — from conventional crude oil and natural gas to the emerging sources of the future.

Diversifying our sources of energy is essential in order to meet the world's growing demand in an environmentally sound way. Developing the infrastructure to produce and distribute new forms of energy such as biofuels on a large scale is a significant challenge.

That's why Chevron's technology investments and strategic research alliances are so important. To succeed, we need energy solutions that are innovative, practical and enduring.

Renewables and advanced technologies have the potential to alter the energy portfolio over the long term. They can create new raw materials for fuel, new sources for power and new benefits for the environment. Although these resources may not be commercially available for decades, there is real and challenging work to be done right now.

Making Strategic Investments

At Chevron, we are making strategic investments in promising new ways to produce transportation fuels.

We are using ethanol in our gasoline. And we see biofuels, including ethanol and biodiesel, as potential options to help increase the diversity of energy supplies.

We have developed research alliances with several prominent institutions and established a biofuels business unit to advance technology related to and pursue commercial opportunities for ethanol and biodiesel.

And we're not stopping there.

Exploring the Potential of Hydrogen

Chevron is taking steps to learn more about how to design and operate hydrogen fuel systems.

Through public-private collaborations, hydrogen demonstration stations and real-world applications, we can provide valuable insight into the opportunities and challenges of hydrogen as a viable fuel source.

Our subsidiary Chevron Technology Ventures is investing in a number of projects:

  • In 2007, we established alliances on biofuels research with Texas A&M University and the Colorado Center for Biorefining and Biofuels.
  • Also in 2007, we began a research project with the U.S. Department of Energy's National Renewable Energy Laboratory to develop technology to produce transportation fuels from algae.
  • In early 2008, we formed a joint venture with Weyerhaeuser Co. to develop the next generation of renewable transportation fuels from nonfood sources. The initial focus of the joint venture, called Catchlight, is on developing and demonstrating technologies for converting cellulose-based biomass from a variety of sources into economical, low-carbon biofuels.
  • In Florida, we collaborated with government officials, Ford Motor Company and Progress Energy to design and build the state's first advanced hydrogen energy station. The station, which became operational in early 2007, fuels a fleet of hydrogen-powered shuttle buses used at the Orlando International Airport and the Orange County Convention Center.
  • Near Los Angeles, we're working with Southern California Edison, using electrolysis to produce hydrogen from water to power a fleet of fuel-cell vehicles.
  • In Northern California, we are working with one of the state's largest public transit operators, Alameda–Contra Costa Transit Authority, on a project that produces hydrogen fuel onsite for a fleet of fuel-cell buses and other hydrogen-powered vehicles. In 2007, we also began work with the Alameda-Contra Costa Transit District to test a blend of biodiesel supplied by Chevron in a fleet of 22 unmodified diesel buses.
  • In Southern California, we converted natural gas into hydrogen to provide fuel for a fleet of up to 10 Hyundai and Kia fuel-cell vehicles at a demonstration station at the Hyundai-Kia America Technical Center in Chino.
  • In the Philippines in 2007, we began providing a 1 percent biodiesel blend derived from locally grown coconuts in response to new legislation. We plan to increase that amount to 2 percent in 2009 and to introduce a 10 percent ethanol-blended gasoline in 2008.

Leading in Geothermal Energy

We are the world's largest producer of geothermal energy, a renewable resource that generates reliable power while producing virtually no greenhouse gas emissions.

In Indonesia, the power plants we operate produce enough electricity to meet the needs of more than 3.9 million homes. In July 2007, we began commercial production at the 110-megawatt Darajat Unit III geothermal power plant in Garut, West Java. This new unit brings our total geothermal generating capacity at Garut to 259 megawatts.

Our plants in the Philippines supply 7 percent of the electricity to Luzon, the country's largest island with a population of more than 48 million.

Providing New Energy for Customers

Chevron also operates Chevron Energy Solutions (CES), a subsidiary dedicated to achieving energy cost-savings on behalf of its customers. Since 2000, our subsidiary has developed more than 800 projects involving energy efficiency or renewable power for education, government and business customers.

CES works with public institutions and businesses to develop projects that increase energy efficiency, reduce operating costs and benefit the environment. A growing number of these projects generate electricity from solar, biomass and other emerging technologies.

For example, the company recently engineered and installed a unique system to turn used kitchen grease into biogas. The process generates renewable power and heat to treat the city wastewater in Millbrae, California. The project provides annual revenues and energy savings of $366,000 for the city while nearly doubling the amount of "green power" produced at the plant. More than 3,000 gallons of restaurant grease is delivered to the facility each day.

Looking to the Future

We believe alternative and renewable energy sources will play a role in meeting future energy demand — how large a role depends on many factors, including advances in technology, public acceptance and economic viability.

At Chevron, we're managing our diverse portfolio to contribute to the next generation of energy.

Updated: May 2008