BP PLC (BP) is to invest $500 million over 10 years in a biofuels research program starting by the end of 2007, the company’s chief executive said Wednesday.
The plans will be in addition to $8 billion of spending already earmarked by the company to develop alternative-energy projects as it tries move from traditional hydrocarbons and change its public image.
In a print version of a speech to be made Wednesday, CEO John Browne said the company will make “a 10-year investment of $500 million to create a dedicated biosciences energy research laboratory, attached to a major academic centre.”
“This will be the first facility of its kind in the world,” he added.
Browne said BP had begun discussions with several leading universities to identify which could host the research program, called BP Energy Biosciences Institute.
He said the institute would focus on developing new biofuel components and improving the efficiency of existing ones; devise technologies to enhance the conversion of organic matter to biofuel molecules; and use modern plant science to develop species that produce a higher yield of energy molecules.
Biofuels, which use organic matter – such as corn or cane – are seen as cleaner than those using fossil fuel and one way to address the world’s thirst for energy.
Last July, the U.S. Congress passed an energy bill that mandates the doubling of biofuels output by 2012.
Other oil companies are also spending money on the technology. For example, Royal Dutch Shell PLC (RDSB.LN) has invested in privately-owned Canadian biotechnology company Iogen which blends farming waste with fossil fuels at its Ottawa plant.
Last year, BP said it would fund its alternative-energy projects through a new business unit, BP Alternative Energy, where it expects to invest as much as $8 billion over 10 years. Energy sources developed will include solar, wind, hydrogen and carbon-abatement technology.
But a spokeswoman said the $500 million pledged for biofuels will be on top of the $8 billion already announced.
The announcement was made during the release of BP’s statistical review of world markets, where it said growth in global energy production and consumption slowed in 2005 to 2.7%, down from a 4.4% increase in 2004.
Source: Marketwatch.com June 14, 2006.