Mar
4
A New Source Of Oil?
March 4, 2008 | 10 Comments
The weekend news lightly covered the Chevron and Weyerhaeuser announcement about the next step in the agreement they had started back in April of 2007. A joint venture has been established called Catchlight Energy LLC. It may be much bigger news than many think.
Monday’s post covered the University if Massachusetts’s release of the pdf report that explores the “roadmap of developing biomass to fuels. The coincidence of the report becoming available and the new releases out of Chevron and Weyerhaeuser coming out the same day is a happy one. But the news reports and the writers are way behind the curve. Chevron comes into this with James F. Stevens having served on the workshop group. Chevron has the inside track for now and has just tied in with the U.S.’ largest wood products and private forestry landholder. As folks catch on, the Chevron stock (NYSE:CVX) and Weyerhaeuser stock (NYSE:WY) have to move. If you read yesterday’s post or even the whole pdf the excitement must be noticeable.
Looking into the press releases won’t tell a lot. Both companies have essentially identical texts and that is to be expected due to stock information and fiduciary rules. Nevertheless, there is a tidbit at the bottom that may be leading back to the information in the U of Mass workshop report. I quote “Catchlight’s initial focus will be on developing and demonstrating novel technologies for converting cellulose and lignin from a variety of sources into biofuels.” Somehow, I don’t think these companies are plowing a lot of money into biomass for processes based in biology when they have so much chemical skill and know-how at their disposal. I find this quote also pointing to chemical processes, “Chevron and Weyerhaeuser already have separate research partnerships under way with universities, national laboratories and technology-based companies to advance the development of nonfood biofuels.”
Another point is that this effort is coming out of Chevron in Califormia, not through a subsidiary or other equity device. While that may be in respect to Weyerhaeuser, it distinctly shows the level of importance of the effort. To solidify the view, Michael Burnside, a 33 year Chevron veteran is leading the new venture.
What’s missing is the when something will be set up, what direction the venture will be taking, where across the vast landscape of Weyerhaeuser’s holdings will development likely start. These questions are significant as the jobs will be plentiful and well paid.
The “why” is being answered by the action. Chevron and other companies (see the list on page 162 of the U of Mass pdf) are seriously looking for harvesting oil from every possible source. The “how” question is illustrated in part by the “roadmap” offered by the report. These questions are not simple to answer yet the answers are coming in commitments and activity. Time will tell us much more.
The economic prospects have just improved dramatically. With a major energy company and a huge landholder in a joint venture to produce fuels and bringing the technology together for the startup, analysts, stock pickers, fund managers and stockholders have to be feeling good. The customers have also reason to feel hope for a better economy. While is may well take time or in fact not drop the price of fuels anytime soon, the investments will mean facilities will be built, new jobs will be created and a lot of money that gets sent out of the U.S. won’t, it will be spent at home.
For many in the worry about global warming the CO2 will be recycled, humankind will be taking a much more responsible role for its part of the biosphere.
This is a noteworthy event. February 29, 2008 may well be the date marking the end of the beginning of fossil oil.
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[…] Chuck – Updated Daily wrote an interesting post today onHere’s a quick excerpt … aboratories and technology-based companies to advance the development of nonfood biofuels. … To solidify the view, Michael Burnside, a 33 year Chevron veteran is leading the new venture….With a major energy company and a huge landholder in a joint venture to produce fuels and bringing the technology together for the startup, analysts, stock pickers, f … While is may well take time or in fact not drop the price of fuels anytime soon, the investments will mean facilities will be built, new jobs will be created and a…But the news reports and the writers are way behind the curve. … I quote “Catchlight’s initial focus will be on developing and demonstrating novel technologies for converting cellulose and lignin from a variety of s ources into biofuels…. […]
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I was just having a conversation over this I am glad I came across this it cleared some of the questions I had.
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