Chevron Renewable Energy Group says future bright for biofuels

Source: By Cassidy Walter< Successful Farming • Posted: Sunday, August 7, 2022

Earlier this summer Chevron completed its acquisition of the Iowa-based company Renewable Energy Group – one of the largest producers of biodiesel and renewable diesel in the country. The newly formed Chevron Renewable Energy Group is headquartered in Ames, Iowa, and will be the central hub of the renewable fuels aspect of Chevron’s business going forward.

Kevin Lucke is the President of Chevron Renewable Energy Group. Lucke sat down with Successful Farming to discuss what this acquisition means for American farmers.

SF: Your career with Chevron has taken you around the world, but you got your start at Iowa State University. How does it feel to be back in the Midwest?

Lucke: Never in my wildest dreams could I have imagined I’d be back here – in Ames in particular. I got my job offer from Chevron when I was still on campus, and here I am back in Iowa. Both my wife and I have family in Western Iowa and so it’s just fantastic to be honest, to be back in the Midwest.

SF: How does the acquisition of Renewable Energy Group fit into Chevron’s long-term vision for the company and for the future of the fuels industry in general?

Lucke: Our objective at Chevron is “higher returns, lower carbon.” Our chairman has used that mantra as a guiding principle extensively for the last five years. As we have used that as our rallying cry to change the footprint of our business, we have also established a target of getting to 100,000 barrels per day of renewable fuels production capacity by 2030. The Renewable Energy Group acquisition really turbocharges Chevron to get to that goal. About one-third of those 100,000 barrels per day are able to be produced currently by what Chevron Renewable Energy Group does. We have an expansion in Geismar, Louisiana, that we expect will be coming online at the end of 2023, or the beginning of 2024, that will essentially double the amount of renewable fuels Chevron Renewable Energy Group produces. In a very short period, we will almost get to two-thirds of our 100,000 barrels per day capacity goal.

SF: As two companies become one, how does that transition change, or maybe not change, the direction of both companies?

Lucke: I think for Chevron, Renewable Energy Group brings a wealth of experience in the renewable fuels area. They’ve been the biofuels leader for probably the last 20 years. Suddenly, Chevron has access to leading technology in this space and leading people that know how to operate a renewable fuels business. It’s really changed what Chevron has access to. From the Renewable Energy Group perspective, I think what it also brings is some larger growth ambitions Chevron has and can help support. I think both Chevron and the Renewable Energy Group are going to benefit from merging together as one going forward.

SF: As that transition continues, how does it affect the American farmer – particularly those whose soybean oil was being used for biodiesel and renewable diesel production?

Lucke: The Geismar facility expansion will increase our capacity to produce renewable diesel. Soybean oil is one of the feedstocks that we will be processing in Geismar. This expansion will increase our demand for fats and oils coming from the agriculture industry, and that’s a concrete example that’s happening in real time.

SF: Renewable Energy Group has always been known for being versatile with the feedstocks they used. Going forward, will that still be the case?

Lucke: That’s really part of the secret sauce of what’s been making Renewable Energy Group successful – their ability to take corn oil from ethanol plants, used cooking oil from restaurants, soybean oil, animal tallow, you name it…and create biodiesel. That will continue. The reality is, for the energy transition we are going to need all forms of energy to get to the expectations that we as a society have. It’s going to take all those sources of feedstocks for us to get to where we need to go in the renewable fuels business.

SF: In the past year or so, there’s been a lot of talk about renewable diesel. It’s kind of the new, exciting thing. Does Chevron still see a future for biodiesel?

Lucke: The future is really, I think, bright for both renewable diesel and biodiesel. To meet the growing lower carbon energy demands, we’re going to need all those forms of renewable fuels. So, the answer is yes, we’re going to need all of the above to be able to meet those expectations.

SF: Are there any fuels you’ll be focusing on beyond renewable diesel and biodiesel?

Lucke: We have several digesters at dairies across the country where we’re making renewable natural gas. Sustainable aviation fuel is certainly on the horizon.

SF: What about in the light-duty market?

Lucke: It’s an area that we’re evaluating. We’re calling it advanced gasoline, but we’re really taking the time to study how could you reformulate gasoline to make it more of a renewable fuel. We’re also working with Iwatani and Toyota to construct 30 hydrogen fueling stations in California over the next few years.

SF: Is there anything that you would say in response to anyone who may be a little hesitant to view a petroleum company like Chevron as a renewable fuel partner?

Lucke: Chevron is committed to lower carbon fuels. The reality is it’s going to take both traditional petroleum companies and renewable fuels companies working together to find a solution for where we need to head as a society. In the past, perhaps traditional energy companies and the biofuels businesses didn’t see eye to eye. I know that’s changing and has to change for us to get to where we’re headed…to offer lower carbon solutions to customers in the U.S. and the world.

SF: Is there anything that you would like our readers to know?

Lucke: We are working hard at Chevron Renewable Energy Group to work with the local communities where we operate. You mentioned that we use [different] feedstocks. Many of those are feedstocks [from] around our biorefineries. Renewable fuels production is providing local jobs in Iowa, or Minnesota, or Illinois, or Wisconsin where we operate at, and also provides a domestic supply of energy that is cleaner.