Renewable energy?

Chevron Backpedals Again on Renewable Energy


Chevron Energy Solutions solar panels in Dinuba, California

Photograph by PRNewsFoto/Chevron Energy Solutions via AP Photo

Chevron Energy Solutions solar panels in Dinuba, California

Chevron’s slogan may be “finding newer, cleaner ways to power the world.” But the country’s second-biggest oil company continues a retreat from businesses that develop renewable energy.

In its latest move, Chevron (CVX) is selling off at least a portion of its clean-energy subsidiary, dubbed Chevron Energy Solutions, which builds solar arrays and energy-saving retrofits for such customers as school districts and local governments, Bloomberg Businessweek has learned.

Oaktree Capital Management, a private equity firm in Los Angeles, is buying at least part of Chevron Energy Solutions, according to current and former employees as well as a government customer who was briefed on June 5 by Chevron about the transaction.

Chevron declined to comment on the transaction with Oaktree Capital. In a statement issued in late May, Chevron said it’s still engaged in renewable energy. “Chevron’s approach to renewable energy continues to be on pursuing technologies that leverage our strengths and can be deployed with competitive economic returns,” according to a statement e-mailed by company spokesman Gareth Johnstone.

During the company’s annual meeting on May 28 in Midland, Tex., George Kirkland, the vice chairman and longest-serving member of Chevron’s management team, told shareholders: “We are selectively applying resources to renewables and energy efficiency.”

Alyssa Linn, a spokesperson for Oaktree Capital, declined to comment.

It’s just Chevron’s latest step away from renewables. As reported by Bloomberg Businessweek on May 29, Chevron earlier this year pulled out of a business to invest in and build utility-size renewable energy projects, despite almost doubling its profit target in 2013. The group helped launch solar and geothermal projects capable of powering more than 65,000 homes and notched after-tax profits of $27 million in 2013. In January, though, employees were told that funding had dried up and were urged to look elsewhere for work.

Chevron earlier this year also sold its 48-person business unit that develops renewable-energy plants and energy-saving projects for federal agencies, such as the Department of Defense. Previously, Chevron pulled back on its investments in biofuels, Bloomberg News reported last year. The funding and ambitions for Catchlight Energy, the biofuels joint venture between Chevron and timber giant Weyerhaeuser (WY), were curbed in 2010.

Several months later, Chevron launched its “We Agree” ad campaign, including a TV and print ad that trumpeted its commitment to renewables, such as biofuels. “Something’s got to be done. So we’re doing it,” stated the print ad that ran at the time with a picture of a young girl. “We’re not just behind renewables. We’re tackling the challenges of making them affordable and reliable on a large scale.”

Chevron Energy Solutions has long been a centerpiece of the oil company’s efforts in renewables and energy efficiency. It first acquired the business from PG&E (PCG) in 2000. A decade later, Chevron boasted that the group had developed hundreds of renewable and energy-efficiency projects that were “reducing greenhouse gas emissions by more than 3 million metric tons.” Company executives have frequently touted the division’s clean-energy work in testimony before Congress.

In one of its most recent projects, Chevron Energy Solutions in May began construction on a renewable-electricity plant in Broward County, Fla., that will let the county generate power from fats, oils, and grease collected from area restaurants. The $21 million project is expected to cut carbon emissions by more than 8,000 tons per year, according to Alan Garcia, the county’s director of water and wastewater services.

Now the project will proceed with Oaktree Capital rather than Chevron, says Garcia, who was briefed about the transaction by Chevron on June 5.

Chevron’s recent moves away from clean energy are concerning to some who fear the company won’t be ready for low-carbon alternatives, if governments take meaningful action to address climate change.

“Chevron is throwing away what had been a true competitive advantage and a profitable hedge against changes in the energy mix,” says Andrew Logan, director of the oil and gas program at Ceres, a nonprofit coalition of more than 100 institutional investors that urge companies to act on climate change.

With Joe Carroll
Elgin is a reporter for Bloomberg News in San Francisco.

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Companies Mentioned

  • CVX
    (Chevron Corp)
    • $119.32 USD
    • -1.23
    • -1.03%
  • WY
    (Weyerhaeuser Co)
    • $31.86 USD
    • -0.39
    • -1.22%
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