BP Getting Deep Into Cellulosic Ethanol

Back in April, when I wrote about BP’s 2011 Sustainability Review, I acknowledged how eager the company was to be seen as responsible, sustainable, and concerned about doing the right thing. I pointed out that the only way an oil company can get to sustainable from here is to make a genuine commitment to moving aggressively away from fossil fuels.

BP took a step in that direction this month with the announcement of a major commitment into alternative energy. This is not the company’s first step in that direction. BP Solar has been around for quite a while and was at one time considered a pioneer in the industry. But it closed up shop at the end of last year, along with a number of other solar companies in a difficult market that had been flooded with low-cost collectors from China.

Now it has turned its attention, and considerable resources to other alternatives. Katrina Landis, CEO of BP’s alternative energy business, reported last week that the company is ahead of schedule in its investments in both wind and biofuels. The division, which was founded in 2005, was launched with a plan to invest $8 billion over a ten year period. At this point, seven years into the plan, the company has already invested $7 billion.

While it’s not clear whether this sector has been profitable for them as yet (their earning are consolidated as part of a larger division), the company clearly believes that it will be.

According to Landis, “The reason it’s been so fast is that we’ve found some very, very attractive business opportunities.”

The biggest excitement seems to be around biofuels, which makes sense considering BP’s history with liquid transportation fuels. According to projections, biofuels will constitute 30% of the gasoline pool by 2030. Here in the US, many states have ethanol mandates that require anywhere from 2.5% (Oregon, Washington) to 20% (Minnesota).

So what kind of biofuel are they producing?

BP is the major contributor to the Energy Biosciences Institute at UC Berkeley, from whose research they are surely benefiting. So you can expect something cutting edge.

Landis says they are growing “cellulosic ethanol energy grass” that grows 15 to 18 feet tall and produces 1,000 to 2,000 gallons of fuel per acre. Those are some pretty impressive numbers when compared to the 277 to 714 gallons reported in Plan B 2.0. Landis was careful not to refer to their crop as switchgrass, though it’s not immediately clear how different the two grasses are.

Corn, which is where most of our ethanol currently comes from, is near the bottom of that list, at 354 gallons per acre. The list did not include switchgrass or other grasses. As experience grows with these new energy crops, so do their ethanol yields.

Only algae is purported to have higher yields per acre. CJ Warner, a former VP at BP, left to company to take the helm at Sapphire Energy, which specializes in algae-based biofuels. But algae has its own issues and apparently BP has decided to steer clear of it.

Instead, they grow their “energy cane” at a commercial plant in a small Florida agricultural town that is happy to have the jobs it provides. There is some justice here, given that Florida was one of the states impacted  by BP’s Gulf Oil spill. The crop is grown on marginal land which is not suitable for food crops.”

BP estimates that cellulosic ethanol will compete in the market at $80 per barrel by 2022.

With corn prices soaring, that is one of many reasons that BP was wise to avoid it.

It’s worth noting that ethanol yield per acre is not the only metric worth paying attention to. Net energy yield, which is the number of units of energy out for every unit of energy put in, is also very import. Sugar cane, which is being widely used in Brazil, has a very high yield, (8, as compared to 2.3 for corn), since the stalks are burned, to provide energy for the processing, after the syrup is extracted. Switchgrass has a net energy yield of 5. Net yields for most biofuel crops has been increasing.

BP is also constructing wheat ethanol facility in the United Kingdom which will come online this year. It will make regular ethanol at first, then shift to cellulosic ethanol when the technology evolves.

On their website, under the heading of “Doing Biofuels Well,” the company vows to be sensitive to the various issues surrounding biofuels, including competition with food crops, soil erosion, deforestation and greenhouse gas emission. One concern that they did not mention is phosphorus depletion.

BP participates in the Roundtable on Sustainable Biofuels.

[Image credit: glbrc.communications: Flickr Creative Commons]

RP Siegel, PE, is an inventor, consultant and author. He co-wrote the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water in an exciting and entertaining format. Now available on Kindle.

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