By George Avalos

Chevron Corp. will spend $2.5 billion on alternative and renewable energy technologies, part of its push to develop new kinds of energy, the company said Wednesday.

San Ramon-based Chevron said it expects to spend the money over a three-year period from 2007 through 2009. Over the five years from 2002 through 2006, Chevron spent about $2 billion on alternative and renewable energy technologies.

That means Chevron expects to spend an average of $833 million a year from 2007 through 2009. That's more than double the per-year average of $400 million Chevron plunked down from 2002 through 2006 on alternative and renewable energy.

"Ultimately, these projects have to make business sense and bring in profits," said Alex Yelland, a Chevron spokesman. "We are also looking for a leadership position in these markets."

But some critics of the oil company were not impressed by Chevron's spending program on alternative and renewable energy.

"If you take it as a percentage of profit, it does not amount to much," said Judy Dugan, a researcher with the Oil Watchdog online site.

However, the average of $833 million would amount to 4.5 percent of Chevron's annual -- and record-setting -- profit of $18.69 billion in 2007. And the average of $400 million would have equated to 2.5 percent of the company's profit in 2006 of $17.14 billion -- also a record at that time.

Dugan also is skeptical

because she believes Chevron might not be spending that much money on true renewable energy sources. She is critical because the company does not specify how much is being spent, separately, on alternative energy and renewable energy.

"Alternative energy could be liquid fuel from coal, or gasification projects," Dugan said. "Alternatives are often a code word for a different way to use fossil fuels. Chevron needs to let us know what they are doing that is really green."

Chevron said it is investing in biofuel, geothermal, solar energy and hydrogen fuel. Chevron works closely with AC Transit on programs related to buses powered by hydrogen fuel, as well as diesel fuels derived from soybeans and natural gas.

Kristina Johnson, a spokeswoman for the Sierra Club, said it is about time for Chevron and other oil companies to spend considerable sums on alternative and renewable energy.

"Clean energy is the future and fossil fuels are an outdated energy source," Johnson said. "The sooner we end our addiction to oil the better. This has been a long time coming."

Executives at Chevron also pointed out that the company scouts for alternative and renewable energy technologies in ways other than direct spending. Chevron owns a venture capital arm that invests in privately held startup companies.

More than a few of these fledgling firms are engaged in research and development of renewable or alternative energy. One example is Oakland-based BrightSource Energy Inc., which has developed new technologies to deploy solar energy fields.

"Our venture operation looks for companies that have promising emerging technologies," Yelland said. "They do play a key role in giving us a position in this emerging alternative energy space. If you can get in on the ground floor of these technologies, that can give you an edge."

George Avalos covers jobs, economic development, commercial real estate, finance and oil companies. Reach him at 925-977-8477 or gavalos@bayareanewsgroup.com