BP building cellulose biofuel business from grasses

  • Chicago (IL) - As far back as March, 2007, BP's plan to bring about biofuel technology was causing a raucous. BP wanted to instigate biofuel production on a scale large enough to have a net drop in carbon emissions from automobiles, something believed to be a step toward addressing global climate change. While several warnings were issued to BP over the next two years, plans were announced yesterday that BP would enter the next-gen biofuels industry with a refinery being built in Florida, powered by waste agricultural products and grasses.

    The process begins by BP increasing its partnership with Verenium Corp. to develop the world's largest biofuel facility from inedible plants -- including grass. The facility will be 25x larger than the pilot project began two weeks ago at an existing Verenium refinery in Mermentau, La.

    BP's current $112.5 million investment in Verenium gave it a 50% stake. The next investment will exceed $250 million for the plant in Florida. Following that, a similar full-size facility may be built somewhere else in the Gulf Coast, according to partners.

    BP is British Petroleum, a British company. The analysts reviewing this news suggest that while United States manufacturers are building ethanol plants from corn, this second-generation British plant will utilize ceullosic ethanol made from inedible grasses and leftover agricultural products. Currently, the Louisiana plant uses crushed sugar can stalks, waste products from the sweetener business.

    The Florida location was chosen due to its consistent warmth throughout the year, rarely getting below freezing. This climate allows the continuous growth of grasses for use at the plant.

    Harry Boyle, a biofuels analyst at New Energy Finance Ltd, has post the question: "Scientifically, you can make ethanol out of cellulose. [But] can you make it cost competitive? Only scaling up will tell you."

    BP plans to take a big chunk of the government mandated 16 billion gallons of cellulosic ethanol to be produced annually by 2022, which will be an estimated 7% of total transportation-fuel consumption.

    BP is also looking to build ethanol plants in other countries, including a $60 million investment in an existing sugar cane facility in Brazil, along with $500 million for two other facilities. BP claims the use of sugar cane will not affect food supplies.