BP Invests $90M in Verenium to Gain Cellulosic Ethanol Expertise
Seeking to become a major player in the burgeoning field of cellulosic ethanol production, petroleum giant BP has announced that it will invest $90 million into Verenium Corporation, a firm that specializes in developing highly efficient technologies to create alcohol fuel from non-food crop sources. The agreement, which will see funding take place over the next 18 months, promises to give BP major access to Verenium’s wide-ranging expertise in the cellulosic production arena. It’s a deal that could pay handsome dividends, as Verenium’s knowledge base presently encompasses the creation and application of genetically engineered microbes and various special enzymes that can more quickly and efficiently break down all types of biomass source materials used in the process, from switchgrass to wood chips.
Headquartered in Cambridge, Massachusetts, Verenium currently is producing cellulosic ethanol on a relatively small scale at an experimental plant in Jennings, Louisiana. However, early this year it announced plans to open its own full-scale facility somewhere in the southeastern U.S. during 2009, a plant that will be capable of producing some 30 million gallons per year. With proper efficiencies, the firm ultimately hopes to reduce the cost of cellulosic ethanol from its current $3 per gallon level to about $2, an achievement that also would have significant ramifications for BP.
Beyond mooting the issue of how today’s spike in ethanol demand may or may not be impacting world food prices, the move away from corn-based production into the cellulosic field also yields an additional green benefit. This second-generation ethanol results in a fuel that produces less carbon dioxide emissions in the field-to-tailpipe chain that the current ethanol products.