Another View: Chevron supports low-carbon fuels

Published: Thursday, Mar. 14, 2013 - 12:00 am | Page 10A

It was with great surprise that I recently read Vinod Khosla's op-ed criticizing energy companies, including Chevron, for not doing enough to invest in low-carbon fuel technologies ("Investment needed in new low-carbon fuel," March 7).

Khosla highlights one of his own companies, KiOR, as an example of the kind of technology that will help fuel producers meet California's Low Carbon Fuel Standard. We agree. That's why our joint venture with Weyerhaeuser, one of the largest U.S. forest management companies, is working closely with KiOR to provide all of the wood chips needed to create the biofuels. When KiOR's facility starts operations, Chevron will purchase 40 percent of the output to be blended into fuels at our Mississippi refinery. This will make Chevron the largest blender of advanced cellulosic biofuels.

Over the last five years, we have collaborated with the Department of Energy, various universities and several advanced biofuels startup companies, and have established a joint venture with Weyerhaeuser. We have also conducted in-house innovative research and development, testing more than 100 different feedstocks and 50 conversion technologies to identify ways to make low-carbon fuel that would be commercial, scalable and affordable for customers. If and when these hurdles are overcome, capital investment will surely follow.

However, all of this activity has led us to conclude that the LCFS, as currently written, is not achievable due to technology, resource and market limitations. In fact, we are convinced the costs to California businesses, consumers and the economy are likely to be profound – and are as yet unrecognized by most people.

While we will continue to work with companies like KiOR to find ways to develop low-carbon fuels at scale, we believe current policy should be reconsidered to avoid unintended adverse consequences, which will be felt by consumers and the state's economy.

Chevron has had a very strong and constructive relationship with the California Air Resources Board as it has navigated the implementation of the LCFS, and we will continue to work with the state to find solutions that advance emissions goals while maintaining a strong economy.

Dave Reeves is president of downstream strategy, technology and commercial integration for the Chevron Corp.

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