SC 13D

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D
(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)¹

Catalytica Energy Systems, Inc.

(Name of Issuer)

 COMMON STOCK,
PAR VALUE $0.0001 PER SHARE

(Title of Class of Securities)

 148884109

(CUSIP Number)

Kenneth F. Clifford
Metalmark Capital LLC
1585 Broadway, 38^th Floor
New York, NY 10036

Tel: (212) 761-8179

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

July 22, 2004

(Date of Event which Requires Filing of this Statement)

     If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box o.

     Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

     ¹ The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page.

     The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 148884109 13D Page 2 of 5 Pages

1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Metalmark Capital LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) o  (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS* OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 3,302,495 – See Item 6
		8	SHARED VOTING POWER -0- See Item 6
		9	SOLE DISPOSITIVE POWER 3,302,495 – See Item 6
		10	SHARED DISPOSITIVE POWER -0- See Item 6
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,302,495 – See Item 6
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.5% – See Item 5
14	TYPE OF REPORTING PERSON* OO

[*SEE INSTRUCTIONS BEFORE FILLING OUT!]

      Item 1. Security and Issuer.

      The class of equity securities to which this statement relates is the common stock, $0.001 par value per share (the “Common Stock”), of Catalytica Energy Systems, Inc., a Delaware corporation (“Catalytica Energy” or the “Company”). The principal executive offices of Catalytica Energy are located at 1388 North Tech Boulevard, Gilbert, Arizona 85233.

      Item 2. Identity and Background.

      (a) This Schedule 13D is being filed on behalf of Metalmark Capital LLC, a Delaware limited liability company (“Metalmark”).

      (b) The address of the principal business and the principal office of the Reporting Person is 1585 Broadway, 38^th Floor, New York, New York 10036.

      (c) Not applicable.

      (d) Neither the Reporting Person nor, to the knowledge of the Reporting Person, any of the other persons listed on Schedule A attached hereto has been convicted in a criminal proceeding in the past five years (excluding traffic violations or similar misdemeanors).

      (e) During the past five years, neither the Reporting Person nor, to the knowledge of the Reporting Person, any of the other persons listed on Schedule A attached hereto was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

      (f) Metalmark is a Delaware limited liability company. See also Schedule A.

      Item 3. Source and Amount of Funds or Other Consideration.

      Not applicable.

      Item 4. Purpose of Transaction.

      Not applicable.

      Item 5. Interest in Securities of the Issuer.

      Reference is made to the Report on Schedule 13D, originally filed on December 26, 2000, as amended by Amendment No. 1 thereto filed on February 15, 2002 and Amendment 2 thereto filed on the date hereof (collectively, the “MS Schedule 13D”), jointly filed on behalf of the following persons: (1) Morgan Stanley, a Delaware corporation (“MS”), (2) Morgan Stanley Capital Partners III, Inc., a Delaware corporation (“MSCP III, Inc.”), (3) MSCP III, LLC, a Delaware limited liability company (“MSCP III, LLC”), (4) Morgan Stanley Capital Partners III, L.P., a Delaware limited partnership (“MSCP III, LP”), (5) MSCP III 892 Investors, L.P., a Delaware limited partnership (“MSCP III 892”), and (6) Morgan Stanley Capital Investors, L.P., a Delaware limited partnership.

      (a) For the purposes of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended, by virtue of the subadvisory arrangement described in Item 6 below, Metalmark may be deemed to beneficially own 3,302,495 shares of Common Stock, or approximately 18.5% of the outstanding shares of Common Stock, which shares are held by MSCP III, LP and MSCP III 892.

Page 3 of 5

      (b) By virtue of the subadvisory arrangement described in Item 6 below and the relationships reported under Item 2 of the MS Schedule 13D, prior to effectiveness of such subadvisory arrangement, each of Metalmark, MS, MSCP III, Inc. and MSCP III LLC may be deemed to have shared voting and dispositive power with respect to the shares of Common Stock owned by MSCP III, LP and MSCP III 892. Once the subadvisory arrangement is effective, Metalmark may be deemed to have sole voting and dispositive power with respect to the shares of Common Stock owned by MSCP III, LP and MSCP III 892. See response to Item 6 below.

      (c) The Reporting Person has not effected any transaction in the Common Stock during the past 60 days.

      (d) By virtue of the subadvisory arrangement described in Item 6 below and the relationships reported under Item 2 of the MS Schedule 13D, prior to effectiveness of such subadvisory arrangement, each of Metalmark, MS, MSCP III, Inc. and MSCP III LLC may be deemed to have the power to direct the receipt of dividends declared on the shares of Common Stock held by MSCP III, LP and MSCP III 892 and the proceeds from the sale of such shares of Common Stock. Once the subadvisory arrangement is effective, Metalmark may be deemed to have the sole power to direct the receipt of dividends declared on the shares of Common Stock held by MSCP III, LP and MSCP III 892 and the proceeds from the sale of such shares of Common Stock. See response to Item 6 below.

      (e) Not applicable.

      Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

     On July 22, 2004, Metalmark Subadvisor LLC (“Subadvisor”), Metalmark (the parent entity of Subadvisor) and certain affiliates of MS agreed that Subadvisor will manage MSCP III, LP and MSCP III 892 on a subadvisory basis. The management authority of Subadvisor will be as set forth in a Power of Attorney, the form of which is attached hereto as Exhibit 1. This subadvisory relationship is expected to commence in the third quarter of 2004. Once the subadvisory arrangement is effective, Metalmark may be deemed to have sole voting and dispositive power with respect to the shares of Common Stock owned by MSCP III, LP and MSCP III 892. Metalmark is a new independent private equity firm led by Howard I. Hoffen and senior team members from Morgan Stanley Capital Partners.

      Item 7. Material to be Filed as Exhibits.

      Exhibit 1: Form of Power of Attorney.

Page 4 of 5

SIGNATURE

     After reasonable inquiry and to the best knowledge and belief of the undersigned, the undersigned certifies that the information set forth in this statement is true, complete and correct.

Date: August 3, 2004

METALMARK CAPITAL LLC
By:	/s/ Kenneth F. Clifford
	Name:	Kenneth F. Clifford
	Title:	Chief Financial Officer

Page 5 of 5

SCHEDULE A

OFFICERS AND SOLE MEMBER
OF
METALMARK CAPITAL LLC

      The name of the sole member and the names and titles of the officers of Metalmark Capital LLC (“Metalmark”) are set forth below. The current principal occupation for each of the persons listed below is Managing Director of Morgan Stanley & Co. Incorporated. In connection with the transactions described in Item 6 of this Schedule 13D, each of the persons listed below will terminate employment with Morgan Stanley & Co. Incorporated, commence full-time employment with Metalmark, and become members of Metalmark (if not already a member). The business address of each of the persons listed below is 1585 Broadway, New York, New York 10036. Unless otherwise indicated, each title set forth opposite an individual’s name refers to his title at Metalmark and each individual is a United States citizen.

Name, Business Address	Title
Howard I. Hoffen	Sole Member
	Chairman, Chief Executive Officer and Managing Director
Michael C. Hoffman	Managing Director
Jeffrey M. Siegal	Managing Director
John J. Moon	Managing Director
Leigh J. Abramson	Managing Director
Eric T. Fry	Managing Director
Kenneth F. Clifford	Chief Financial Officer and Managing Director

EX-99.1

EXHIBIT 1

FORM OF

LIMITED POWER OF ATTORNEY

[applicable MS GP] [applicable MS Member]

     Pursuant to the Subadvisory Agreement dated as of [____], 2004, among Morgan Stanley Investment Management Inc., Morgan Stanley Leveraged Equity Fund II, Inc., MSCP III, LLC, Morgan Stanley Capital Partners III, Inc., MSDW Capital Partners IV, LLC, MSDW Capital Partners IV, Inc., Metalmark Subadvisor LLC (“Subadvisor”) and Metalmark Capital LLC (the “Subadvisory Agreement”), [name of Morgan Stanley General Partner (“MS GP”)] [name of MS Member (“MS Member”)] irrevocably appoints Subadvisor (for the term of the Subadvisory Agreement) as attorney-in-fact and agent with full and exclusive power and authority to act for [MS GP] [MS Member] with respect to the [name of Fund (“Fund”)] [list names of Co-Invest Vehicles for which the applicable MS Member acts as manager (“Fund”)] with management authority conferred on the Subadvisor under the Subadvisory Agreement, including without limitation, in the following matters: (a) to buy, sell, exchange, convert, and otherwise take any action for any securities or investments of the Fund, (b) to establish, maintain, and deal through accounts with one or more securities brokerage firm(s) as the Subadvisor may select to effect purchases or sales of securities or investments as agent for the Fund, (c) to establish custody accounts with any custodian for the maintenance of custody for Fund cash or securities and to issue instructions to any such custodian, (d) to execute and deliver any agreement, document or instrument on behalf of the Fund concerning the Fund’s securities or investments, including purchase or sale agreements, shareholder agreements, voting agreements, proxies, shareholder consents, or other matters related to the Fund’s securities or investments, and (d) to take any actions and execute and deliver any agreement, document or instrument involving litigation or claims involving the Fund. It is further understood that the Subadvisor may deliver to any person a copy of this document as evidence of the authority of the Subadvisor to act for and on behalf of the Fund. This limited power of attorney, and the power and authority granted to the Subadvisor hereunder, shall terminate upon the termination of the Subadvisory Agreement.

      Executed this ___ day of ____, 2004.

[MS GP] [MS Member]

By:

Its: