Weyerhaeuser, Chevron and Biofuels - a natural fit.

Implications:
Weyerhaeuser(NYS:WY) and Chevron(NYS:CVX) have announced that they will pool their efforts to assess the feasibility of commercially producing ethanol (for fuel) from cellulose.  Ethanol is relatively readily produced from cellulose, but much work remains to be done to develop and perfect economically efficient and commercially feasible processes.

Analysis: This joint effort is virtually a "no brainier":

Weyerhaeuser is continually searching for ways to more completely and efficiently utilize the wood fiber (mostly cellulose) they produce from their operations.  A significant portion of the cellulose they produce has little or no current economic value. Though some of this material has some value (material left on the land to rot provides some soil tilth and nutrients, and some low value mill residuals can be burned in a boiler to provide process heat and/or power) much of it represents a cost to treat or dispose of.  Any additional economic outlets to utilize this marginal/waste material would help Weyerhaeuser's bottom line.

Chevron has expertise in manufacturing and marketing liquid fuels, and in molecular conversion technologies. They are certainly interested in maintaining or expanding their fuel market share if/when ethanol becomes a significant portion of the supply.

Unlike corn, soy beans, sugar cane, or other biofuel crops that require cultivation,  fairly large energy inputs to grow, and create demand that puts price pressures on their use for food; cellulose, in the form of wood waste, requires little or no additional cultivation, low energy inputs to grow, and places little or no price pressures on existing other uses of cellulose.