Chevron U.S.A. Inc., a subsidiary of Chevron Corporation, and California Bioenergy LLC (CalBio) have announced a joint investment in their second holding company to produce and market dairy biomethane as a renewable natural gas (RNG) transportation fuel in California. At signing, the holding company, CalBioGas Hilmar LLC, secured initial funding from Chevron to build infrastructure for dairy biomethane projects in California’s Merced County.
Manure storage on dairy farms results in the release of methane, a highly potent greenhouse gas. CalBio brings technology and operational experience to help dairy farmers build digesters and methane capture projects to convert this methane to a beneficial use as renewable natural gas, which is considered carbon negative on a lifecycle basis under California’s Low Carbon Fuel Standard. Per the agreement, Chevron will provide additional funding for as many as seven digesters and one central upgrading facility across a cluster of dairy farms in Merced County.
The cluster of digesters has been awarded California Department of Food and Agriculture grants, which must be augmented with additional capital to complete the projects. When complete – expected in 2023 – Chevron will take 100% of the renewable natural gas produced to market in the California vehicle fuels market.
“This project brings together support from many groups, including seven California Dairy farmers, who are national leaders in milk and cheese production; Chevron, one of California’s largest energy companies; and grant funding from the California Department of Food and Agriculture. The strong support from these partners will help California with its emission reduction targets,” says Neil Black, president of CalBio. “These projects are also benefiting the local community through job creation and protecting local air and water quality.”
As part of its lower carbon objectives, Chevron is complementing the strength of its traditional products business with new offerings that help customers support a lower carbon future. Carbon negative renewable natural gas produced from dairy biomethane is an essential part of its portfolio of solutions.
“We are excited to continue our partnership with CalBio and work with local communities and farmers to develop lower carbon fuel solutions,” says Andy Walz, president of Americas Fuels & Lubricants for Chevron. “The investment underscores our commitment to produce 40,000 MMBTU/D of RNG by 2030 and grow the lower carbon businesses that we believe will be a bigger part of the future.”