Speech from Sue Ellerbusch, President, BP Biofuels North America, Louisiana Energy Conference, June 23, 2011

(BP America) ...BP began investing in biofuels in Louisiana in 2008 through what was then a joint venture with Verenium Corporation. Last year, we bought Verenium out and now have a 100% BP-owned facility in the state.
It is a 1.4 million gallon process demonstration facility in Jennings: a one-of-a-kind advanced biofuels technology demonstration unit designed and built to enable commercial-scale production of cellulosic biofuels.
Today I’d like to give you a quick overview of why BP is investing in biofuels and why we believe that biofuels could become an important component of the economic future of Louisiana and other states along the Gulf Coast.
First, since many of you are more familiar with barrels of oil than biofuels, let me walk you through some of the basics.
BIOFUELS SECTOR IS GROWING
The world of energy is changing – that much is obvious.
Demand for energy continues to grow – perhaps by 45% in the next 20 years - and new sources for energy are becoming harder and more expensive to bring on line.
Meeting this growing demand in a cost-effective and sustainable manner will be one of the key challenges of the 21st century.
At BP, we believe that what we are seeing today is the coming of age of a new energy sector that over the next 100 years will supplement traditional fossil fuels to create a more diversified energy mix. Notice that I said “supplement”, not “replace,” fossil fuels.
In the U.S., one of the critical new energy technologies is biofuels.
Today, nearly 10% of this nation’s transport fuels are supplied by first generation biofuels made largely from U.S. corn.
For us at BP, advantaged biofuels are those meeting 4 criteria. We use these to guide our investment.
First, biofuels must be low-cost. Our benchmark for success is $1 a gallon, so that the biofuels we make can compete with oil without any subsidy by 2022.
Second, biofuels must be low-carbon. We anticipate producing biofuels in the U.S. that meet the national goals of reducing the GHG levels in transport fuels by over 60% from current levels.
Third, biofuels must be scalable. There is no point in making boutique biofuels. Only mass production and mass distribution can turn the dial.
Lastly, biofuels must be sustainable. Sustainable from an environmental, social and economic perspective.
If a biofuels product can meet these four criteria, as we believe they must, then it can truly be said to be an advanced biofuel worthy of a strategic investment by an integrated energy company.
...THE CASE FOR CELLULOSIC BIOFUELS
We strongly believe that cellulosic biofuels technology sits in a sweet spot and large scale commercialization is just around the corner. This technology will deliver on the promise of low-cost, low-carbon, scalable, and sustainable transport fuel.
Simply put, no other form of biofuels has the potential to deliver the volume at the low cost of cellulosic biofuels.
The cellulosic biofuels that we will produce will be made from dedicated energy grasses, converted into fuel using proprietary technology that extracts sugars from the cellulose in the plant and converts it into liquid fuel.
The energy grasses we will use are 10-15 feet tall perennial grasses that grow in warm climates and have a very high fiber or cellulose content – so they’re very high yielding.
That means that higher volumes of fuel can be produced from each ton of feedstock, and each acre of land, in comparison with current generation biofuel feedstocks like corn. And they can be grown on lower-quality agricultural land – land that is not best suited to growing food crops economically.
Using these feedstocks and our technology to make biofuels can yields 4 to 5 times that of corn ethanol on a per acre basis.
...(E)xperience has shown us that future cellulosic biofuels facilities will take four to five years from land acquisition to production of first ethanol.
That figure in based in part on our experience in Highlands County, Florida, where our first project is expected to become the first fully integrated commercial-scale cellulosic biofuels production facility in the United States when it opens in 2013.
Total investment in the facility and agricultural feedstock operation will be in excess of $400 million.
... In many cases, the farmers in these local Southern areas will be the true beneficiaries. 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. READ MORE