By Jad Mouawad, June 14, 2006
In one of the largest research grants by an oil company, BP is planning to spend $500 million over the next 10 years to finance major work on biofuels to find “longer-term commercial alternatives to oil and gas.”
The energy giant is in talks with several universities in the United States or Britain as possible sites for the research center but says it has not yet picked a partner. BP aims to begin research at the center, called the BP Energy Biosciences Institute, by the end of 2007.
The program is expected to be formally announced in London today by Lord Browne, the company’s chief executive, a spokeswoman, Sarah Howell, said.
It will finance “radical research aimed at probing the emerging secrets of bioscience and applying them to the production of new and cleaner energy, principally fuels for road transport,” the company said.
The project is another step in BP’s shift to diversify its energy supplies and provide alternatives to fossil fuels for transportation, the largest consumer of crude oil. BP was the first oil company to recognize the impact of carbon emissions on global warming, in 1997, and has since increased its commitment to renewable energy.
Last year, it said it would spend $8 billion over the next decade to develop a new business, BP Alternative Energy, focusing on forms of energy that emit little or no carbon dioxide, the greenhouse gas blamed for global warming. But so far, its plans have mostly addressed power generating, through the development of solar energy, wind and hydrogen projects.
Major oil companies have in general been timid in financing research into biofuels and other alternatives to gasoline, because many of them view the alternatives as competition to their core businesses and a threat to the long-term prospects for oil.
But with rising concerns over the security of oil supplies, the availability of global resources and the effects of carbon emissions on climate change, BP has recognized a greater role for transportation fuels made from organic matter. The company’s decision is also a recognition that many governments, mostly in Europe and the United States, are requiring a higher share of ethanol and other forms of biofuel in their products.
A statement by Lord Browne that will be released today said, “We expect demand for biofuels to rise significantly through the next decade to meet consumer desire for more environmentally responsible products and to satisfy the requirements of governments for more energy to be homegrown.”
It added: “The world needs new technologies to maintain adequate supplies of energy for the future. Bioscience is already transforming modern medicine and we believe it can bring immense benefits to the energy sector.”
The United States Congress has passed legislation requiring an increasing level of ethanol, a fuel that can be made from corn or sugar, in gasoline supplies in coming years.
The research university to receive the grant will be picked before the end of the year.
BP already finances a major academic research program at Princeton University that is considering ways to deal with carbon emissions.
It is not the only oil company to finance fundamental science research at American universities. Exxon Mobil, the world’s largest publicly traded oil company, is taking part in a $100 million, 10-year effort at Stanford that focuses on the long-term prospects of trapping carbon emissions or hydrogen fuel cells. The other participants in that program are Toyota, General Electric and Schlumberger.
