Chevron New Energies: Transitioning to a More Sustainable Energy
Summary
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Details
Deep dive
Products
1. Hydrogen
Blue Hydrogen: Produced from natural gas with carbon capture and storage (CCS) to reduce carbon emissions. Chevron is working on producing blue hydrogen, which can be used in industrial processes, power generation, and transportation.
Green Hydrogen: Produced using renewable energy sources like wind or solar to electrolyze water, splitting it into hydrogen and oxygen. Green hydrogen is a zero-carbon energy carrier that can be used in fuel cells, industrial applications, and as a clean alternative to fossil fuels.
2. Renewable Fuels
Renewable Diesel: Chevron produces renewable diesel from feedstocks like vegetable oils, animal fats, and waste oils. Renewable diesel is chemically similar to petroleum diesel but with significantly lower carbon emissions.
Sustainable Aviation Fuel (SAF): Chevron is investing in the development and production of SAF, a cleaner alternative to traditional jet fuel, made from renewable biomass sources. SAF helps reduce the carbon footprint of the aviation industry.
3. Carbon Capture, Utilization, and Storage (CCUS)
Carbon Capture Technology: Chevron New Energies is developing and deploying technologies to capture carbon dioxide emissions from industrial processes. These technologies are crucial for reducing greenhouse gas emissions from hard-to-abate sectors like cement and steel manufacturing.
Carbon Storage Solutions: Once captured, carbon dioxide is transported to storage sites, often deep underground in geological formations, where it is safely and permanently stored.
Carbon Utilization: Chevron is also exploring ways to utilize captured carbon dioxide in products like building materials, fuels, and chemicals, effectively turning waste into valuable resources.
4. Renewable Power Generation
Offshore Wind Energy: Chevron is exploring offshore wind projects, particularly in regions with strong wind resources, to generate electricity without carbon emissions. These projects contribute to the overall renewable energy grid and provide clean power.
Solar Energy: Chevron is involved in solar power projects that harness energy from the sun to generate electricity. Solar power is a key component of Chevron's strategy to diversify its energy portfolio and support a low-carbon future.
Geothermal Energy: Chevron is also looking at expanding its geothermal energy capabilities, which involve tapping into the Earth’s natural heat to generate electricity and provide heating.
5. Bioenergy
Biogas and Biomethane: Chevron is involved in the production of biogas and biomethane, renewable forms of natural gas derived from organic waste materials. These gases can be used for heating, electricity generation, or as vehicle fuel.
Motivations Behind the Creation of Chevron New Energies
Regulatory Pressures
Governments worldwide are implementing stricter regulations to combat climate change, including setting targets for reducing greenhouse gas emissions. These policies often include carbon pricing, emissions trading systems, and mandates for renewable energy adoption. Chevron recognized that to continue operating successfully in this changing regulatory environment, it needed to invest in lower-carbon technologies and energy solutions. The international commitment to the Paris Agreement, which aims to limit global warming to well below 2 degrees Celsius, has increased pressure on energy companies to reduce their carbon footprints.
Investor Demands
ESG (Environmental, Social, and Governance) Criteria: Investors are increasingly prioritizing companies that demonstrate strong ESG performance. This includes not only profitability but also how a company manages its environmental impact and social responsibilities. Investors are particularly focused on how energy companies are preparing for a low-carbon future, demanding transparency and concrete actions toward sustainability.
Investors are concerned about the long-term financial risks associated with traditional fossil fuel investments, especially as the world shifts toward renewable energy. Chevron New Energies represents a strategic move to diversify the company’s portfolio, reduce exposure to carbon-intensive assets, and position itself as a leader in the energy transition, thereby mitigating financial risks and attracting long-term investors.
Partnerships
1. Partnerships with Energy Companies
Occidental Petroleum (Oxy Low Carbon Ventures): Chevron has partnered with Occidental Petroleum’s Oxy Low Carbon Ventures to advance carbon capture and storage (CCS) projects. This collaboration focuses on capturing carbon dioxide from industrial sources and storing it in secure underground geological formations. The partnership aims to scale CCS technologies, which are crucial for reducing emissions in hard-to-abate sectors like cement and steel manufacturing.
Renewable Energy Group, Inc. (REG): In partnership with Renewable Energy Group, Chevron has invested in the production of renewable diesel, which is derived from renewable feedstocks such as vegetable oils and animal fats. This collaboration enhances Chevron’s capacity to produce and distribute low-carbon fuels that can be used in existing diesel engines without modification, reducing the carbon intensity of transportation fuels.
2. Collaborations with Technology Firms
Microsoft: Chevron has partnered with Microsoft to harness digital technologies, including cloud computing, artificial intelligence, and machine learning, to optimize energy operations and reduce emissions. This collaboration includes initiatives to improve the efficiency of Chevron’s new energy projects, such as carbon capture and renewable power generation, by using advanced data analytics and digital tools.
Schlumberger: Chevron has teamed up with Schlumberger, a leading oilfield services company, to explore and develop geothermal energy projects. The collaboration aims to leverage Chevron’s expertise in subsurface exploration and Schlumberger’s technology in geothermal systems to unlock the potential of geothermal energy as a reliable and sustainable power source.
3. Alliance with Government Agencies
U.S. Department of Energy (DOE): Chevron has been working with the U.S. Department of Energy on initiatives related to hydrogen production and infrastructure development. These projects are part of the DOE’s broader efforts to accelerate the adoption of hydrogen as a clean energy source. Chevron’s involvement includes research and pilot projects aimed at scaling up hydrogen production, particularly blue and green hydrogen, and developing the necessary infrastructure for storage, transport, and distribution.
Chevron has also partnered with the DOE on various advanced energy projects, including carbon capture and utilization research. These initiatives are designed to bring new technologies from the lab to commercial deployment, helping to reduce the carbon footprint of industrial processes.
4. Joint Ventures and Strategic Investments
Chevron Phillips Chemical Company (CPChem): Chevron New Energies, through its joint venture with Phillips 66 in Chevron Phillips Chemical Company, is exploring opportunities in the production of renewable chemicals and circular plastics. This includes developing technologies that convert plastic waste into new plastics, reducing the environmental impact of plastic production and contributing to a circular economy.
Chevron-Bunge Bioenergia: Chevron has formed a joint venture with Bunge, a leading global agribusiness, to produce biofuels in Brazil. The Chevron-Bunge Bioenergia partnership focuses on the production of ethanol from sugarcane and the generation of renewable electricity from biomass. This joint venture positions Chevron as a significant player in the biofuels market, particularly in regions with abundant agricultural resources.
Advanced Clean Energy Storage (ACES) Project: Chevron is part of the Advanced Clean Energy Storage project, a large-scale initiative aimed at creating the world’s largest renewable energy storage facility. The project, located in Utah, involves converting excess renewable energy into hydrogen, which can be stored and later used to generate electricity. This joint venture includes collaboration with Mitsubishi Power and other industry leaders, showcasing Chevron’s commitment to integrating hydrogen into the broader energy system.
