Chevron Corporation (NYSE: CVX) and the U.S. Department of Energy's National Renewable Energy Laboratory (NREL) have entered into a collaborative research and development agreement to study and advance technology to produce liquid transportation fuels using algae. The announcement, made yesterday (31st October) outlined a program where Chevron and NREL scientists will collaborate to identify and develop algae strains that can be economically harvested and processed into finished transportation fuels such as jet fuel. Chevron Technology Ventures, a division of Chevron U.S.A. Inc., will fund the initiative.

The research project announced today is the second under a five-year strategic biofuels research alliance between Chevron and NREL announced in October 2006. The first involves bio-oil reforming, a process by which bio-oils derived from the decomposition of biological feedstocks are then converted into hydrogen and biofuels.

"We are extremely pleased to join Chevron in this path-breaking research," said NREL Director Dan Arvizu. "NREL operated the Aquatic Species Program for the Department of Energy for nearly 20 years, giving us unique insights into the research required to produce cost-effective fuels from algal oils or lipids. Our scientists have the advanced tools and the experience to rapidly increase the yield and productivity of key species of algae. In Chevron we have found an ideal research partner with the skills and knowledge to transform these algal lipids to cost-competitive fuels and to distribute those fuels to consumers."

"Biofuels will play an increasingly important role in diversifying energy supplies to meet the world's growing energy needs. Chevron believes that nonfood feedstock sources such as algae and cellulose hold the greatest promise to grow the biofuels industry to large scale," said Don Paul, vice president and chief technology officer, Chevron Corporation. "Collaboration between industry, universities, research institutions and government is essential to overcoming the technological and commercial challenges of manufacturing high-quality transportation fuels from unconventional feedstocks. Chevron is pleased to partner with the nation's preeminent renewable energy laboratory in this important research."