Oil majors – big brothers with the deep pockets, or Big Bother?

As reported last week in the Digest, Verenium’s Bill Baum, addressing the San Diego-based BioCom group, told participants that, to reach true scale,  “You’re going to have to raise capital on the order of $1 billion. So this is not a trivial type of thing. … If you don’t have a big brother with deep pockets, like a BP, like an Exxon or Shell, it’s going to be very difficult.”

Biologist Greg Mitchell, of the Scripps Institution of Oceanography, added that pilot projects, not just bench testing in labs, are required to understand the engineering required for economically viable production. “We can’t just be doing it in a laboratory,” Mitchell told the BioCom group, “We’ve got to get the first 10 acres, first hundred acres.
“It’s going to cost money. We need the government. We need collaborations. We need big businesses.”

As reported in the Digest all throughout 2009, oil majors are moving steadily into the biofuels arena, as well as an increasing number of companies looking at renewable chemicals and plastics — such as Dow and Dupont. In the 2008-09 50 Hottest Companies in Bioenergy rankings, only one oil company, Petrobras, made the rankings — in 2009-10, look for four to make the Hot 50 and as many as eight, if their investments are considered.

So where are the oil majors today?

Shell. Incoming CEO Peter Voser – whose company recently focused all its renewable energy activity on biofuels – is invested in Cellana, an algae JV with HR Biopetroleum, but confirmed that, since taking over on July 1st, he has not undertaken a visit to the JV’s operations in Hawaii. Shell is also an investor in enzyme pioneer Codexis, cellulosic ethanol producer Iogen, and drop-in renewable fuels developer Virent Energy Systems.

Petrobras. Seeking Alpha reports that “Petrobras has also been aggressively expanding its renewable energy programs in wind, solar and biofuel. Petrobras’ total biofuel production, particularly important for Brazil’s energy needs, is set to increase at a 17.9 percent annual rate through 2013.” The company has announced entries into first-fgeneration soy biodiesel and sugarcane ethanol, as well as an R&D effort aimed at producing cellulosic ethanol.

BP Biofuels. The company, which looks certain to enter the 50 Hottest Companies in Boenergy for 2009-10 and may lock down a high position, has a series of investments with Verenium, plus a JV with Dupont in Butamax, the biobutanol fuel developer; a joint venture with Martek to explore algal fuels development, and is co-venturing with British Sugar in a wheat ethanol plant in the UK. The company is also funding a $500 million grant to the Energy Bioscience Institute in Califonia which is researching advanced biofuels.

Marathon. Invested in cellulosic ethanol pioneer Mascoma.

Chevron. Is invested with Mascoma in a venture to produce ethanol and lignin. Also has a JV, Catchlight nrgy, with Weyerhaueser, to pursue biofuels made from forest waste. Also supports NREL in algal fuels research, and  is investing in Solazyme.

Valero. The company now owns seven ethanol plants acquired from the VeraSun bankruptcy. Has a JV with Waste Management and Terrabon for renewable fuel development from waste; also is developing a 135 Mgy renewable diesel venture in Louisiana with Darling, using animal residues among other feedstocks.

Total. Invested in biobutanol pioneer Gevo.

ExxonMobil. Invested in a $600 million R&D partnership with Synthetic Genomics focused on the development of algal fuels.

China National Petroleum. China’s largest state-owned oil company has established a broad venture agreement with UOP to develop renewable, drop-in fuels.

ConocoPhillips. Its venture to produce biofuels from animal waste with Tyson is shuttered due to tax credit expiration, but it has a $5 million research investment with the Colorado Center for Biorefining and Biofuels.

Indian Oil. Signed an MOU to develop a microcrop-based biofuels platform in cooperation with PetroAlgae.

PetroVietnam. Developing significant ethanol infrastructure using sugarcane and cassava as feedstocks.

More on oil company investments, and oil company executives in the biofuels industry, here.

More on specific investments by oil companies in “Who’s Your Daddy?“

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