BP president provides update on oil giant's biofuels business

By Kris Bevill | July 06, 2011

Sue Ellerbusch, president of BP Biofuels North America, traveled to the heart of U.S. oil production recently to provide an update on the company’s biofuels operations to attendees of the Louisiana Energy Conference. She assured the group that the commercialization of cellulosic biofuels is “just around the corner” and said BP is committed to carrying out its plans to produce biofuels from energy grasses in the Southeast U.S., yielding up to five times more fuel per acre than corn ethanol.

BP currently operates a 1.4 MMgy demonstration-scale facility near Jennings, La. The plant began operations in 2008, testing the viability of sugarcane and energy cane bagasse, and was once a joint venture with enzyme developer Verenium Corp. BP purchased Verenium’s share of the operations last year and is now the sole owner of the plant and technology. Ellerbusch said the facility is used to produce data and samples that influence the company’s scale-up strategy for future plants. “Our Jennings facility is doing exactly what it was designed to do: demonstrate the feasibility and sustainability of producing cellulosic biofuels in the southern United States,” she said.

According to Ellerbusch, BP believes Louisiana has the perfect climate for producing dedicated energy crops and the company is currently working with agricultural experts and researchers to identify the specific types of energy cane and energy grasses that are best-suited for the area.

Energy crops for biofuel production will require large amounts of space, and BP is working to address this issue. In Florida, where BP is developing a $400 million, 36 MMgy facility in Highlands County, work began late last year on a 20,000-acre seed farm to grow energy grasses for the facility. In her speech, Ellerbusch said a groundbreaking for the plant will be held next year, with production slated to begin in 2013. Ideally, the company would like to have access to 50-60,000 acre tracts of cropland for energy crop production, she said, adding that concentrated tracts of land are more difficult to acquire in states such as Florida and Texas.

Successful commercialization of cellulosic biofuels will require cooperation between public and private sectors, Ellerbusch said. She stressed the potential economic impact of cellulosic biofuels production for the southern U.S., comparing it to the revival witnessed in many rural Midwestern communities as the corn ethanol industry expanded. “In many cases, the farmers in these local Southern areas will be the true beneficiaries,” she said. “Many forms of Southern agriculture are under production pressure, whether it be disease pest, or international competition pressures. A long-term lease for land and a contract to grow energy crops for BP on a portion of their land will be a wonderful opportunity for Southern farmers to reduce the risk in their existing operations and diversify into the energy industry.”

BP plans to produce cellulosic ethanol, but is also investing heavily in biobutanol technology. The company formed a joint venture with DuPont in 2009 to produce biobutanol at a cost that will be competitive with ethanol. The company also carries out operations in Brazilian sugarcane ethanol production. It is part owner in a venture that operates one ethanol mill and earlier this year paid approximately $680 million to acquire two operating mills and one under development.