## BP and Verenium Form Cellulosic Ethanol Venture to Deliver Advanced Biofuels

##### 18 February 2009

BP and Verenium Corporation have formed a 50-50 joint venture to develop and commercialize cellulosic ethanol from non-food feedstocks such as energy cane and energy grasses. The joint venture company will act as the commercial entity for the deployment of cellulosic ethanol technology being developed and proven under the first phase of the BP-Verenium partnership, announced last August. (Earlier post.)

Together the companies have agreed to commit $45 million in funding and assets to the joint venture company. This collaboration is intended to progress the development of one of the nation’s first commercial-scale cellulosic ethanol facilities, located in Highlands County, Florida and to create future opportunities for leveraging cellulosic ethanol technologies. (Earlier post.) The formation of the joint venture company and additional investment builds on$90 million investment made by BP in 2008, which allowed the two companies to advance efforts at Verenium’s proof-of-concept demonstration facility in Jennings, Louisiana.

BP and Verenium’s proprietary technology enables conversion of nearly all the sugars found in cellulosic biomass, including both five-carbon (pentose, e.g., xylose) and six-carbon (hexose, e.g.., glucose) sugars into ethanol.

This next stage in our relationship with Verenium demonstrates our real commitment to making cellulosic ethanol a reality in the US fuels market in the near term. BP and Verenium together have the technological know-how, engineering capability and market expertise required to demonstrate that we can deliver better, more sustainable biofuels, more quickly.

—Sue Ellerbusch, president of BP Biofuels North America

Highlights of the collaboration include:

• Formation of a joint venture company with a total commitment of $45 million in funding and assets contributed from BP and Verenium, including a total of$22.5 million from BP and development assets from Verenium, including the Highlands County, Florida project and another commercial project site in early stages of development;

• The joint venture company will be led and supported by a team comprised of employees from both BP and Verenium and will be governed by a board with equal representation from both parent companies; and

• The joint venture company will initially be based in Cambridge, Massachusetts.

The joint venture company will initially focus on developing and securing financing for a first commercial-scale cellulosic ethanol facility in Highlands County, Florida and expects to break ground on that site in 2010. The estimated construction cost for this 36 million gallon-per-year facility is between $250 and$300 million. Production from this plant is expected to begin in 2012. With plans to add additional capacity, the joint venture company also intends to develop a second site in the Gulf Coast region.

While this joint venture was planned, it's nice to see it finalized & moving forward especially in this economy...I really hope they're successful.

$300 million for a 35 million gallon-per-year sounds outrageously expensive, that's about 1$ per gallon over 10 years for the capital only. Doesn't sound viable but hope this pilot plant will help reduce the cost of futur large scale plant.

Funny thing about economies. In western Canada - things are booming. Real estate prices have steadily increased, incomes remain high, unemployment low, housing starts up... Same in U.S. Northwest.

One must wonder, does economic catastrophe differ much from climate catastrophe?

Sulleny

in what it is relevant here ? it is really going nowhere..

Its nice to hear things are now moving on cellulosic ethanol.

We note that British Petroleum (BP) is part of the above-mentioned joint venture. Recently, BP has also shown interest in butanol as a candidate alternative fuel for spark-ignited engines. Hopefully the work BP will now be doing in cooperation with Verenium, will result in innovative ideas like ethanol-butanol combinations so as to combine the high antiknock rating of the former with the higher energy content of the latter.

As an aviation buff, such combinations would definitely find a market. Currently, piston-powered airplanes (usually private planes like the familiar Cessna 172/182) are running on 100LL (100 octane low-lead aviation gasoline). This is the only application for the once widely used antiknock additive tetraethyl lead, which has been phased out from automotive gasoline.

Soon, the EPA will see fit to ban lead from aviation gasoline. It has been most difficult to devise methods of producing 100 octane gas without the least bit of tetraethyl lead. So I'm hoping that quantity-produced ethanol, using feedstocks other than oorn, combined with economical methods of producing butanol, will lead to aviation fuels with a good combination of antiknock characteristics and energy content.

""Funny thing about economies. In western Canada - things are booming. Real estate prices have steadily increased, incomes remain high, unemployment low, housing starts up... Same in U.S. Northwest.""

What? You have destroyed your credibility with this statement. Are you living in a box? Are you paying attention to what is happening to the real estate markets in western Canada? I think you just make this stuff up as you go along.

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