Acting like a Silicon Valley venture firm, Chevron Corp. has invested in these and other technologies. Many of the products have little to do with oil and gasoline, yet Chevron hopes they can help itself and its industry.
San Ramon-based Chevron, in effect, is presiding over a marriage of Silicon Valley and Big Oil. The Chevron that seeks crude oil and sells gasoline is the same Chevron that networks with venture capitalists to identify and nurture emerging technologies.
Through a unit called Chevron Technology Ventures, the oil giant has undertaken an intensive quest to scout for startup firms that have invented a broad array of products and services.
"We are an onramp for new technologies into Chevron," said Jim Gable, who until recently was a long-time vice president with Chevron's venture capital group. Gable has just taken a position with Chevron outside the venture operation.
Plenty is at stake here, for energy users, motorists and Chevron. The venture unit wants to find companies with the next great idea to enhance the energy future. Chevron also hopes to harvest profits from its venture gambits.
"We want the venture arm to identify, commercialize and integrate emerging technologies and business models
Alternative energy, conventional oil and natural gas production, new materials, communications and information technology are all industries that Chevron reconnoiters.
Chevron's venture arm has plunked down $170 million directly with startups or indirectly through venture capital firms that seek out fledgling companies.
Yet skeptics abound. Although part of Chevron's venture funding targets alternative energy, some activists say Chevron is no cuddly green giant.
The oil company's venture officers do more than simply sit and wait for phone calls or e-mails about a bright new company whose fortunes Chevron could burnish. They regularly make the rounds in the Bay Area and elsewhere to network face to face with financiers and entrepreneurs.
"We circulate through these networks to identify opportunities to fund good companies that can improve our business," said Don Riley, an executive with Chevron Technology Ventures.
The company networks with venture capitalists, major research universities and the national laboratories in Berkeley and Livermore to develop new technologies or uncover promising startups.
"The external venture capital community knows to come to Chevron if they have a deal," Gable said.
The company says its physical location is vital to its success in networking with venture capitalists.
"We have an opportunity to leverage the technology that percolates throughout Silicon Valley," said Leif Sollid, a Chevron spokesman. "We are not isolated from all of these emerging technologies."
The oil company has started three venture funds and plans to launch a fourth by the fall.
Chevron may have little choice but to seek the assistance of venture capitalists to seek out promising new technologies.
"Oil companies over the past 15 years have not allocated much money to research and development," said Peter Tertzakian, chief energy economist with ARC Financial Corp., an investment firm. "As a fraction of revenue, oil companies are among the lowest in reinvesting in research and development."
Still, Chevron's research program is quite extensive and represents a big chunk of the $19 billion the firm budgeted in 2007 for capital projects and exploration, said Don Campbell, a Chevron spokesman.
"We leverage our R&D spending across our entire enterprise," Campbell said. "We don't have one bucket of cash where we say this is our R&D and this is how much we're going to spend. We spend a great deal on new projects that are cutting edge or leading edge" for finding, developing and extracting crude oil and natural gas.
Campbell pointed to Chevron's deep-water crude oil project in the Gulf of Mexico and a sour gas injection effort in Kazakhstan. Chevron also has teamed up with Schlumberger Ltd. to develop software systems to simulate complex oil reservoirs and wells.
Chevron says it takes a different approach to finding new technologies than do most other oil companies. Other oil firms, Campbell and analysts said, tend to conduct in-house research, develop an idea, patent the discovery and then keep it inside the company.
"We use a partnership approach where we find universities or other players that have a certain expertise," Campbell said. "We have the business need. They have the ideas or the skills. We see how to apply them practically to our business goals."
East Bay firms are among the startups on which Chevron has placed a bet.
BrightSource Energy Inc. has developed new technologies to deploy solar energy fields. BrightSource's solar array consists of relatively small mirrors that collect the sun's rays and convert them into electricity.
A BrightSource executive touted Chevron's financial backing as very helpful.
"Having a company like Chevron invest in a solar energy technology company like ours validates what you are doing," said Charles Ricker, BrightSource senior vice president. "It helps to have a sophisticated energy company looking at you and saying this looks good."
BrightSource's approach to constructing solar fields may affect the environment much less than conventional solar complexes do, Ricker said.
"The mirrors are relatively small," Ricker said. "Animals can run around the solar poles, and you don't have to grade the land to dead flat like with other solar plants."
Oakland-based BrightSource has signed a preliminary deal with PG&E Corp. for a 500-megawatt solar plant, Ricker said. The company's solar arrays to serve California are in the desert areas of Victorville and Bakersfield.
To invest in BrightSource, Chevron teamed up with a South Bay venture veteran. A MoneyTree survey shows that a group led by ChevronTexaco Technology Ventures and Draper Fisher Jurvetson provided BrightSource with $16.5 million early in 2007.
Chevron also backs firms that have hatched systems for conventional energy uses.
Sub-One Technology has invented a new way to coat the interior surface of pipes, valves and chambers to transport fluids and gases. The hard and ultra-smooth coating improves fluid flow, reduces corrosion, contains costs and curbs leaks.
Pleasanton-based Sub-One is an example of how Silicon Valley technology and inventions have migrated into conventional energy. Andrew Tudhope, chief executive of Sub-One, is a high-tech veteran, with stints at chipmakers Intel and VLSI. Tudhope became intrigued by new ways to coat surfaces.
"Our primary process is a diamondlike carbon coating," Tudhope said. "We're getting a good response, and there is overwhelming demand."
In October, Chevron joined a group led by Advanced Technology Ventures that provided Sub-One with $7 million.
"Chevron brought not only exposure to the market, with money and resources, but also their name and contacts," Tudhope said. "The credibility of that endorsement is priceless."
Despite Chevron's venture efforts, the company's actions are inadequate, some activists say.
"Chevron and the oil industry are not doing enough to encourage the development of clean energy and fight global warming," said Josh Dorner, an official with the Sierra Club. "Chevron has done no more than dip the tip of its pinkie toe."
Judy Dugan, research director of Oil Watchdog, a consumer group, said Chevron spends only a tiny amount of its resources on alternative-energy ventures.
"It's a very small investment by Chevron to find out a lot of information about emerging energy technologies," Dugan said. "Chevron can find the most promising technologies that they like and support them. And if they get information about a technology that could hurt their competitive position, they can kill it."
Chevron executives maintain that the company's active involvement in venture capital shows its portfolio ranges well beyond drilling for petroleum.
"People think of Chevron only as a big oil company," Sollid said. "We have become much more."
George Avalos covers the job market, petroleum, insurance, banks and economic development. Reach him at 925-977-8477 or email@example.com.
Chevron Technology Ventures has invested in a broad array of companies. Here's a sample, listed alphabetically, of a few that have landed venture financing via Chevron and other firms.
Company, headquarters, product or service
Sources: Chevron and company Web sites