Weyerhaeuser and Chevron form biofuels joint venture

NEW YORK (Reuters) - Oil company Chevron Corp and forest products maker Weyerhaeuser Co on Friday announced the launch of a joint venture to develop renewable fuels from nonfood sources like wood.

The 50-50 joint venture, Catchlight Energy LLC, will research and develop technology for converting cellulose-based biomass into economical and low-carbon biofuels, the companies said in a joint statement.

The venture will focus on developing technology to transform wood and other cellulose sources into clean-burning fuels for cars and trucks.

Ethanol from plant cellulose has the same chemical properties as ethanol made from corn and sugar cane, but it is produced from a variety of nonedible materials such as cereal straw, wood, sawdust and switchgrass.

In the United States, corn is the dominant feedstock used to make ethanol. As the number of corn-fed ethanol plants has mushroomed, the price of the crop has steadily risen. This has led a number of companies to explore alternatives to corn-based ethanol. Such initiatives could help reduce the pressure on corn prices.

Both Chevron and Weyerhaeuser will contribute resources -- including funding, background technology and employees -- to Catchlight Energy.

Last April the companies announced the signing of a letter of intent to assess the feasibility of the project.

(Reporting by Euan Rocha; editing by John Wallace)