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Chevron's attempts to turn plants into alternative fuels for profitable, large-scale production have failed.
The second-largest U.S. oil company by market value spent "significant sums" and assigned some of its best scientists to evaluate more than 100 kinds of feedstock and 50 techniques for converting them into fuels without success, Chevron Chairman and Chief Executive John Watson said Tuesday during an address to the Economic Club of Minnesota.
"The smartest minds in my company and others haven't yet cracked the code on pairing the right feedstock conversion technology and logistics in an economic and scalable package," Watson said.
Major crude producers from Chevron to BP have been scaling back investment in renewables to focus on higher-profit ventures such as deep-water oil wells. Chevron's setbacks echo those of Exxon Mobil, which last year said its $600 million foray into algae-based fuel may not succeed for another 25 years. BP put $3.1 billion of wind assets for sale last year after withdrawing from solar in 2011.
Chevron sold an energy-efficiency unit last month that had been losing money for half a decade, Watson said.
The company remains dedicated to other forms of renewables such as geothermal, Watson said during a meeting with reporters after his speech.
Watson, a University of California at Davis-trained agricultural economist, also said the U.S. government should reconsider the mandate requiring domestic refiners to add corn- based ethanol to gasoline.
"Is it really good energy or land-use policy to have 40 percent of our corn crop effectively mandated for fuel use?" Watson asked in the prepared remarks. Minnesota is the fourth- largest U.S. corn-producing state, according to the Agriculture Department in Washington.
Watson also said Chevron is close to recycling 100 percent of the fracking water and brine involved in drilling wells in the Marcellus Shale formation beneath Pennsylvania and neighboring Northeast states.
Water polluted with salt, chemicals and naturally occurring impurities has overwhelmed treatment systems in some U.S. shale regions as the drilling boom multiplied the volumes rising to the surface alongside gas and oil. Watson didn't provide any other details on the San Ramon, Calif.-based company's Marcellus water program.
Exxon is the largest U.S. oil producer by market value.