Chevron installing solar panels — to produce oil more cheaply

In California’s sundrenched Kern Valley, Chevron Corp. has found a way to use one of the state’s cleanenergy programs to cut the cost of pumping oil, to the chagrin of some environmentalists.

Since April, solar panels have been powering oil pumps at Chevron’s Lost

Hills 7,981 barrel-a-day oil field, according to the company. The 29-megawatt site, owned and operated by San Jose-based SunPower Corp., is designed to provide the field with 80 percent of its electricity, equal to taking more than 4,000 cars off the road. In exchange, Chevron will earn so-called lowcarbon fuel standard credits worth about $4 million a year at current prices.

“Electricity is one of Lost Hills field’s largest operating expenses, so having solar will be an important factor to help keep those costs down and maintain the planned oil field life,” Veronica Flores-Paniagua, a Chevron spokeswoman, said in an email.

Renewable energy costs have fallen “substantially” over time, making its application to oil fields more economic, Telisa Toliver, Chevron Pipeline & Power’s general manager for renewable power, said. “We see this business model for us as something we hope to replicate,” she said.

The Lost Hills project, Chevron’s largest solar-powered oil field, marks an unusual twist in the fate of the state’s decade-old Low Carbon Fuel Standard Program. The carbon-trading plan, designed to cut emissions 20 percent by 2030, has mostly been used to supplant gasoline and diesel with ethanol and biodiesel in vehicles. But it’s starting to benefit oil companies, a development that environmentalists say may subvert the program’s intent of more renewable fuels.