Louisiana Grants $100MM Bonds for Chevron Biodiesel Plant Expansion

Louisiana has allotted $100 million in bonds to support Chevron Corp’s expansion of its renewable diesel production facility in Geismar.

Governor Jeff Landry announced the allocation at the Louisiana Mid-Continent Oil and Gas Association’s annual conference held Monday and Tuesday at the Four Seasons Hotel New Orleans, where the state’s Republican leader also declared support for the oil and gas industry.

Renewable Energy Group Inc. (REG) and then Governor John Bel Edwards announced the expansion project 2020. Chevron has taken over the facility, which has a biorefining capacity of 90 gallons a year, since acquiring REG in 2022.

A news release at the time by the Louisiana Office of Economic Development announcing the expansion project, which is planned to raise the plant’s processing capacity to 340 million gallons per year, said the state would provide a $5 million workforce grant, as well as tax incentives.

Announcing the bond allotment, Landry’s office said in a press statement, “The improvement and expansion project was announced with Governor John Bel in 2020 and Chevron received approval for the bond issuance from the State Bond Commission in 2023; however the former Governor never gave them any bond allocation”.

“Under Governor Jeff Landry, Chevron will now receive the $100 million bond allocation, mostly made up of carryover bonds”, it added.

“The Geismar Facility was the first stand-alone renewable diesel production facility in the U.S. when it was completed in 2010”, it noted.

The expansion project broke ground 2021. A REG announcement of the ceremony at the time said the project was estimated to cost $950 million, up from $825 million when it was unveiled 2020. The 2021 announcement said mechanical completion was planned for 2023 while full operation was expected 2024.

“This project helps us to advance our goal of providing affordable, reliable, ever-cleaner energy through the production of lower carbon intensity fuel”, the plant’s manager, Daniel Dascher, said in a statement welcoming the bond allotment. Chevron has set a target of growing its renewable fuel production capacity to 100,000 barrels per day by 2030.

Landry’s office said, “This expansion project is expected to bring 90 new permanent jobs and 1,500 temporary jobs”.

At the state’s oil and gas gathering where Landry announced the bond allotment, the governor also signed a proclamation and an executive order assuring support for the industry.  “The Proclamation states that Louisiana is open for business and our administration will work tirelessly to ensure the Oil and Gas Industry can thrive in our State”, the governor’s office wrote in the press statement. “The Executive Order directs the Louisiana Department of Natural Resources and the Louisiana Department of Environmental Quality to promote the streamlining of permitting processes associated with the Oil and Gas Industry”.

Landry was quoted as saying in the statement, “The Oil and Gas Industry built Louisiana and keeps our economy moving”.

“Our administration will always be a strong voice for this industry and support the vital jobs it creates”, he added.

Landry said the Chevron project “will not only benefit Louisiana’s hardworking men and women, but it will also help reduce our carbon emissions”.

The developments presented a reprieve for Chevron, which has been hit by restrictive policies in its home state of California. In its earnings report for the last quarter of 2023 the San Ramon City-based energy giant confirmed impairment charges of $1.8 billion from its US upstream assets. Chevron first announced the writedown in an earlier regulatory filing where it said most of the impaired assets were in California. It blamed “continuing regulatory challenges in the state that have resulted in lower anticipated future investment levels in its [Chevron’s] business plans”.

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