Advanced Biofuels


Opinion: Talking Butanol with BP CEO Tony Hayward-A View From the Field

Date Posted: December 11, 2009

by Sam Nejame

It’s not often I get a chance to talk with the CEO of a major oil company, so when Tony Hayward of British Petroleum came to town, I took the opportunity to see him.

I was hoping to ask him about Butamax, BP’s recently named joint venture with DuPont and to get his perspectives on the future of butanol based fuels.

Hayward was in Cambridge, MA to check on his company’s ongoing research at MIT, (much of it thermo-chemical routes to alternative fuels), to recruit and to touch base with a local biotechnology firm.

That oil companies are funding biological research is becoming less of a surprise.

As the cost drops and the power of biotechnology tools advance, molecular biology is increasingly being applied to renewably sourced chemicals and fuels in an unprecedented bioconvergence.

This means there will soon be biorefineries producing materials beyond corn and cellulosic ethanol.

In fact there already are.

The most striking example of convergence yet may be the UC Berkeley born startup, Amyris Biotechnologies, which has developed an inexpensive anti-malarial drug.

That a couple of graduate students can invent a weapon to combat disease in African is commendable, but what is likely to matter more to Americans is that reconfigurations of the drug may yield cheap synthetic gasoline.

Think about that for a second.

We may be reaching the point where a biotechnology drug can be made so cheaply that you can burn it as motorfuel.

And while it’s one thing for a risky startup to grab venture capital and make flashy headlines, it’s interesting to consider that DuPont has been operating a commercial biorefinery and selling renewably sourced textile fibers since 2007.

DuPont, not known for making bad business decisions, felt strongly enough about its new technology, that it sold its business unit, which manufactured fibers from petroleum, before the new biorefinery went online – albeit with contracts in place to buy back nylon, spandex, etc. from the new owner.

Of course when it comes to biofuel, sometimes it takes a spade and a bucket to separate the smear from the honest short comings of corn ethanol.

Does anyone really want to read another word about the food v. fuel debacle?

No? Unfortunately, up until now we haven’t had much choice.

Ethanol is the only biofuel we actually know how to produce at scale with reasonable economics and LCA.

This is about to change.

Many companies focused on advanced biofuels are employing the same systems biology tools used by Amyris and DuPont.

In this vein British Petroleum has started several ventures.

Of particular note is its Butamax JV with DuPont for isobutanol and its significant investments in Cambridge based Verenium, a biotechnology company developing advanced cellulases.

Think supply chain.

When I talked with Tony Hayward, BP’s CEO, he struck a pragmatic tone, quite different from his predecessor.

“We have to accept the harsh realities,” he said.

“Those who aren’t surrounded by energy production 24 hours a day fail to grasp the enormity of the problem, but if you’re realistic the possibilities start to emerge.”

He didn’t seem particularly keen to talk about butanol, but it was clear that with the recent branding of Butamax, BP was on the march and ready to counter moves by Gevo and ICM.

Gevo already has an operating pilot plant and is actively angling to retrofit traditional ethanol facilities to support their isobutanol producing yeast.

Meanwhile, under BP’s plan DuPont engineers the bugs, Verenium makes the enzymes which convert cellulose into fermentable sugar, ethanol producers become butanol producers, and BP plugs it all into its colossal distribution, blending and retail infrastructure.

While these initiatives will not end the reign of gasoline anytime soon, with butanol already approved for 16% blends, it may get us over the 10% blend wall despite what EPA decides to do with the E15 waiver request.

Talking with Hayward at MIT, it was the first time I’ve heard anyone connected to BP actually say, that their strategy was to “build a new value chain from lignocellulose to butanol,” which however obvious was cool to hear and maybe some kind of first.

As far as economics I couldn’t get him to venture much other than to say, “Butanol would be competitive with oil in the $60-$70/bbl range. A bit more expensive than ethanol, but not significantly.

We will see butanol from conventional ethanol plants and feedstocks.” As for time to commercialization?

BP’s CEO stuck with a safe “3 to 5 years.”

Speaking of commercialization.

The whole DuPont-BP-Butamax supply chain was in attendance for the recent Cellulosic Biofuels Summit in DC.

They looked tanned rested and ready. Expect to see the troops aggressively approaching ethanol producers with isobutanol licensing deals in 2010.

The British are coming.

I mean the bioconvergence is coming.

Sam Nejame is Founder of Promotum a management consulting firm specializing in technology commercialization and business development for fuels, chemicals and biologics. He has an MBA from the Kellogg School of Management and a BS in Chemical Engineering from Worcester Polytechnic Institute. His opinions can be read from time to time in the Biofuels Journal. Contact him at snejame@promotum.com or follow him at Promotum.blogspot.com or Twitter: @renewables.

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