Oil Companies Testing Low-Emissions Gasoline as an Electric Vehicle Alternative

Filling a car at a gas station in West Hollywood, Calif., on March 10, 2022. (Bing Guan/Reuters)

The two biggest U.S. oil companies are testing the production of new, less carbon-emitting blends of gasoline, as the government push for electric vehicles (EVs) gets more pronounced.

Chevron Corp. and Exxon Mobil Corp. are testing gasoline production from non-fossil sources, a move that could extend the period gasoline-powered vehicles remain available for purchase, as a low-emissions alternative to EVs.

“We really believe there has to be alternatives for the light-duty vehicle,” Andy Walz, Chevron president of Americas Products,  said at an event on Wednesday to road test the fuel. “Electrification is not the only answer.”

Chevron and Exxon disclosed test results from partnerships with automaker Toyota Motor Corp. using renewable gasoline partially made from soybeans or other non-fossil feedstocks. The blends could be used by the existing U.S. car fleet and gas stations, the oil majors have said.

The tests came as President Joe Biden’s administration last week proposed new pollution standards that could result in EVs accounting for up to two-thirds of U.S. light-vehicle sales by 2032, according to government calculations.

Bringing the cost of these renewable gasoline blends to affordable levels would depend on supportive government policies, Exxon said. Chevron added it could be years before the renewable fuel could be available in pumps.

“We believe it is going to need government help to get up and running, and get scale,” Walz said, referring to existing incentives such as those provided for biodiesel and renewable diesel.

The most efficient way to bring scale to renewable gasoline would be through a carbon price, but not all jurisdictions are ready for it, said Balaji Krishnamurthy, Chevron’s vice president of strategy and sustainability.

The companies use different metrics to measure emissions. Exxon said its renewable gasoline could reduce emissions by as much as 75 percent compared to conventional gasoline on a life-cycle basis. Chevron said its blend was more than 40 percent less carbon intensive than traditional gasoline, including the carbon intensity of manufacturing the vehicle.

Emissions Reduction Proposal

Last week, the Environmental Protection Agency (EPA) proposed sweeping emissions cuts for new cars and trucks through 2032, a move it says could mean two out of every three new vehicles automakers sell will be electric within a decade.

The proposal, if finalized, represents the most aggressive U.S. vehicle emissions reduction plan to date, requiring 13 percent annual average pollution cuts and a 56 percent reduction in projected fleet average emissions over 2026 requirements. The EPA is also proposing new stricter emissions standards for medium-duty and heavy-duty trucks through 2032.

Automakers and environmentalists say the administration is moving quickly in order to finalize new rules by early 2024 to make it much harder for a future Congress or president to reverse them. Former president Donald Trump rolled back tough emissions limits through 2025 set under former president Barack Obama, but the Biden administration reversed the rollback.

John Bozzella, CEO of the Alliance for Automotive Innovation representing General Motors, Volkswagen, Toyota, and others, said, “Factors outside the vehicle, like charging infrastructure, supply chains, grid resiliency, the availability of low-carbon fuels and critical minerals will determine whether EPA standards at these levels are achievable.”

The proposal is more ambitious than President Biden’s 2021 goal, backed by automakers, seeking 50 percent of new vehicles by 2030 to be electric vehicles or plug-in hybrids.

Reuters contributed to this report.