This is an excerpt from EERE Network News, a weekly electronic newsletter.

June 21, 2006

BP Commits $500 Million Over 10 Years to Support Biofuels

BP announced on June 14th that it plans to spend $500 million over the next ten years to establish a biosciences research laboratory dedicated to energy technologies. According to BP, the new BP Energy Biosciences Institute will initially focus on developing new biofuels, improving the efficiency and flexibility of ethanol and biodiesel, devising new technologies to convert a greater proportion of crops into biofuels, and developing plants that produce more energy molecules (such as oils, starches, and sugars) and can be grown on land not suitable for food production. BP is currently in discussions with several leading universities to identify which could host the new research laboratory and plans to launch its research programs by the end of next year. BP chief executive Lord Browne expects a significant growth in demand for biofuels over the next decade, and he believes that a major investment in new biofuel technology is needed to assure that biofuel supplies keep up with demand.

To make use of the technology, BP has also launched a new biofuels business within its refining and marketing division. The company is planning to offer E85 (a blend of 85 percent ethanol and 15 percent gasoline) in one or more U.S. markets toward the end of this year. And on June 20th, BP announced an agreement with DuPont to develop advanced biofuels, starting with butanol, an alcohol that can be produced by fermenting sugars (BP refers to this sugar-derived butanol as "biobutanol"). The companies are working with British Sugar to convert a U.K. ethanol plant into a biobutanol production plant by next year. According to BP, gasoline containing a significant percentage of biobutanol can be burned in gasoline-fueled vehicles without any need for retrofits, and the blends offer better fuel economy that gasoline and ethanol blends. BP claims that biobutanol can also enhance the performance of ethanol blends. A U.S. company, Environmental Energy, Inc., is also developing this technology. See the BP press releases from June 14th and June 20th and for detailed information on biobutanol, see the Environmental Energy Web site.

The BP news came just weeks after Chevron Corporation announced that it was forming a biofuels business unit. On June 15th, Chevron followed up that announcement by forming a strategic research alliance with the Georgia Institute of Technology. Chevron Technology Ventures will contribute up to $12 million over the next five years for research in the production of biofuels from cellulosic biomass, the characterization of biomass feedstocks, and the development and improvement of sorbents that remove impurities from hydrogen. See the Chevron press release.