It isn't big, but at least it's a start.
ExxonMobil (NYSE:XOM), which has received more than its share of criticism for its refusal to involve itself meaningfully in renewable energy, announced on Tuesday that it'll become a partner in a $600 million biofuels effort. It will team up with California company Synthetic Genomics in an effort to use algae to develop transportation fuels.
According to an Exxon official involved in the project, "the real challenge to creating a viable next generation biofuel is the ability to produce it in large volumes." In addition to being suitable for such high-volume production, algae can be grown in places that are inappropriate for other crops. At the same time, it also consumes greenhouse gases, thereby reducing the likelihood of climate change. Also, algae-based oil approximates the molecular structure of conventional petroleum products, such that Exxon can create fuels from the algae at its existing refineries.
In announcing their venture, officials of the companies were careful to emphasize that the project will not come to fruition overnight. As Exxon senior vice president Michael Dolan noted, "significant work and years of research and development still must be completed." Exxon's Emil Jacobs also identified the key steps that lie ahead in the project:
- identifying suitable low-cost algae strains
- deciding upon the optimum way to grow the algae
- determining the best methods for harvesting the algae
Beyond ExxonMobil's joint venture, several other major energy and chemicals companies are active in the development of biofuels. For instance, Royal Dutch Shell (NYSE:RDS-A) (NYSE:RDS-B) has toned down its efforts in wind and solar to focus on biofuel projects. At the same time, BP (NYSE:BP), the second-largest European energy company, is preparing to join Verenium (NASDAQ:VRNM) to build a cellulosic ethanol plant in Florida.
In addition, only a couple of weeks ago Dow Chemical (NYSE:DOW) announced that it would also join a project to use algae and carbon dioxide in biofuel production. Not to be left out, Dow's rival, DuPont (NYSE:DD), is using a sophisticated process to create a high-performance biofuel called biobutanol with the help of BP.
Exxon's energy efficiency efforts don't stop with biofuels. Last month the company announced a program to foster a fleet of electric vehicles powered by Exxon’s new lithium ion battery in Baltimore. So let the critics wail. I, for one, am convinced that ExxonMobil is a tough company to beat.
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