Over the past few years, there's been a raft of attention directed toward replacing a percentage of the gasoline we consume with supposedly cheaper biofuels. Unfortunately, corn-based ethanol, which has been our primary approach in this country, has proven to be expensive, has ramped up food costs, and may actually burn less efficiently than gasoline refined from crude oil.
Now, along comes BP
BP -- which is familiar with biofuels, given that it blended 1 billion gallons of ethanol in the U.S. last year and in September had a refinery come online in Brazil -- is committed to this joint venture. With this new announcement of $22.5 million, BP has now invested $112.5 million in the partnership -- in exchange for a half-interest in Verenium's technology. And beyond that, the companies have expressed a desire to build yet another commercial-scale facility along the Gulf Coast.
These efforts are being prodded by U.S. government mandates calling for sizable increases in the volume of renewable fuels that will contribute to the nation's future supplies. At this point, the mandate calls for approximately 7% of the nation’s total fuel supply -- around16 billion gallons -- to be cellulosic ethanol by 2022. Among those companies also currently working toward this objective are DuPont
But, for my money, the real compliments in the effort go to BP. Not only has the company overcome a range of adversity, including refinery mishaps, pipeline leaks, and an abrupt change in the CEO office, but it has expanded its production of late, solved problems in a partnership in Russia, and is leading the biofuels pack. Add in a better than 8% dividend yield, and you have a company well worth Foolish attention.
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