BP invests in Cellulosic Ethanol

The Wall Street Journal reports that BP has invested in a cellulosic ethanol plant. According to the article, BP is extending an existing partnership with Verenium Corp.

With the move announced Wednesday, BP has invested $112.5 million in Verenium and received a 50% stake in licensing the smaller company's technology. The larger money lies ahead. It is estimated that the Florida facility will cost between $250 million and $300 million. The partners said they plan to build another full-scale facility in the Gulf Coast soon.

It Looks like BP is using their deep pockets at a time when small players can't get access to capital because of the double threat of low fuel prices and the credit crisis.

Many sources for Biofuels

Reuters has an article from a German Biofuels Conference held last week.

Non-food plants and crops mentioned at the conference as possibilities for use in future biofuels range from corn husks, grasses and algae to jatropha oilseeds, tree bark and twigs.

First generation green fuels aimed at reducing global warming are largely produced from foods such as corn, sugar and vegetable oils and face hot but unresolved controversy about whether biofuel production raises food prices.

The second generation of biofuels will be produced from non-food crops and the conference of global biofuels executives heard that the choices for new generation feedstocks were still wide open.