Chevron Corp. (CVX) helped write the first-in-the-nation rule ordering reduced carbon emissions from cars and trucks. Its biofuels chief spoke at the ceremony where California Governor Arnold Schwarzenegger signed the executive order in 2007, the same year the oil company pledged to develop a gasoline replacement from wood.

Now Chevron is leading a lobbying and public relations campaign to undercut the California mandate aimed at curbing global warming, two years after the state started phasing it in. Research on commercially viable climate-friendly products has come to naught, stymied by the poor economics of coaxing hydrocarbons from plants’ stubborn cell walls, according to Chevron officials.

“We’ve looked at 100 feedstocks, 50 conversion technologies, worked to shape this law the best we can, and we have not come up with a solution to be able to comply,” said Rhonda Zygocki, Chevron’s executive vice president of policy and planning, in a Feb. 4 talk at the Commonwealth Club in San Francisco. Rick Zalesky, the Chevron official who celebrated the order’s signing with Schwarzenegger, was blunt last June when he declared the low-carbon standard “not achievable.”

While still promoting its commitment to renewable energy, the second largest U.S. oil company quietly shelved most of its biofuels work in 2010, according to internal documents and former Chevron officials. It decided products with potential returns of at least 5 percent weren’t enough for a multinational used to margins triple that, said Paul Bryan, a former vice president of biofuels technology.

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