BP Joins Verenium On New Ethanol Plant

The 140 full-time jobs and hundreds of construction jobs created in Highlands County to build a cellulose ethanol plant already are known, but now a big player is stepping up.

British Petroleum (BP) will be a part of the ethanol plant.

On behalf of Verenium in a news release, Bryan Blatstein wrote that the 50/50 joint venture company announced Wednesday that it planned to break ground on its first commercial-scale cellulosic plant by 2010 in Highlands County.

The companies seek to speed up the availability of ethanol derived from non-food feed stocks and get the biofuel into American gas pumps.

If all goes as planned, start of production would be sometime in 2012.

Verenium operates on the premise that using technology to produce ethanol from other sources such as grasses like sorghum instead of corn can enable it to sidestep and resolve the "food versus fuel" debate and help produce more food and more fuel.

The joint venture 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, he said.

Together, the companies have agreed to commit $45 million in funding and assets to the joint venture company's projects, which include the Highlands County plant as well as another commercial project site in early stages of development. The joint venture company will be based in Cambridge, Mass.

It will initially focus on developing and securing financing for a first commercial-scale cellulosic ethanol facility in Highlands County, the press release stated.

This collaboration represents a critical next step in positioning Verenium and BP at the forefront of commercializing cellulosic biofuels in the United States, said Carlos A. Riva, president and chief executive officer of Verenium.

"The creation of this joint venture brings together innovative and experienced developers, designers, engineers, operators and managers capable of realizing the potential of this technology," said Riva. "This is a true convergence of industrial biotechnology and energy production processes, which will allow us to deliver cleaner and more sustainable fuels.

At a press conference held Wednesday, Riva said this was the second phase of a collaboration with BP, which began last year.

The estimated need for cellulosic ethanol for U.S. fuel stock was expected to grow from 500 million gallons in 2012 to 16 billion gallons in 2022.

The $45 million investment was to secure debt financing, regulatory approval and preliminary engineering to allow them to break ground. A $7 million Florida Farm to Fuel Initiative grant was also obtained.

About 140 full-time jobs would be created once the plant became operational as well as several hundred construction jobs during the 18 to 24-month period needed to complete the plant, Riva predicted.

The project opens the door for creation of a new domestic green job market, he said.

"The bottom line is we need alternative energy, we need new job creation and we need to build solid infrastructure for the future," he said. "This partnership plays a role in all these things. It puts Verenium and BP in a leadership position."

Thanks to advances in biotechnology, researchers can now transform straw and other plant wastes into "green" gold - cellulosic ethanol, according to energy writer Diane Greer, for the Harvesting Clean Energy Journal at www.harvestcleanenergy.org/.

"While chemically identical to ethanol produced from corn or soybeans, cellulose ethanol exhibits a net energy content three times higher than corn ethanol and emits a low net level of greenhouse gases," Greer wrote.

Sue Ellerbusch is president of BP Biofuels North America.

"We want to demonstrate that cellulosic biofuels are a real option for helping us reduce emissions from road transport and reducing our reliance on foreign oil," said Ellerbusch at the press conference Wednesday.

"This next stage in our relationship with Verenium demonstrates our real commitment to making cellulosic ethanol a reality in the U.S. fuels market in the near term," she said.

"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."

The estimated construction cost for the 36-million gallon per year plant is between $250 million and $300 million. The joint venture company plans to develop a second site in the Gulf Coast region.

World energy demands will continue to grow at a rapid rate, Ellerbusch said.

BP is committed to develop better more sustainable biofuels from feedstock such as Miscanthus, sugarcane, sorghum and sugar beet and bring them to market quickly, she said.

In 2008 BP blended more than a billion gallons of ethanol in the United States. Its first biofuels production plant went online in September of 2008 in Brazil.

On Jan. 15, Verenium announced its plans to build its first commercial-scale cellulosic ethanol facility in Highlands County.

As a result, Verenium signed long-term agreements with Lykes Bros. Inc., to provide the agricultural biomass for conversion to fuel, according to www.biofuelsjournal.com.

"The agreements between Verenium and Lykes Bros. include a facility site option and a long-term farm lease," the Biofuels Journal Web site stated.

"Under these agreements, Lykes will provide the necessary feedstock from approximately 20,000 farmable acres adjacent to the site."

In the policy forum in the Sept. 22 issue of Science, Robert N. Wiedenmann, professor of entomology, and some colleagues at the University of Arkansas called for caution when introducing plants to an ecosystem, citing the possibility of some biofuel crops becoming invasive species.

One proposed biofuel crop, Miscanthus, can grow up to eight feet in six weeks. Wiedenmann describes it as "Johnson grass on steroids," according to an article at http://www.physorg.com/news78069543.html .

"Plants like these, particularly grasses, have great potential from an energy standpoint, but the benefits need to be balanced with the costs," Wiedenmann cautioned.

"Miscanthus is a tall perennial grass that has been evaluated in Europe during the past 5-10 years as a new bio-energy crop," according to http://bioenergy.ornl.gov/papers/miscanthus/miscanthus.html .

"Native species are often preferred in the U.S. However, sterile hybrids have been used for nearly all the European trials making the escape of non-native plants unlikely," the Web site stated.