Norway oil giant backs seaweed-to-ethanol

By Kris Bevill | August 27, 2010
Posted Sept. 17, 2010

Norway-based Statoil, one of the world's largest oil and gas production companies, has formed a strategic partnership with California-based Bio Architecture Lab Inc. for a three-year project to produce ethanol from seaweed using BAL's consolidated bioprocessing technology. Pilot- and demonstration-scale projects will be carried out in Norway, using native seaweed acquired from coastal salmon farms. Statoil will fund research and development activities as well as the demonstration project and will be responsible for managing the seaweed aquafarming operations. BAL will develop the technology and conversion process specific to Norwegian seaweed and will consult with Statoil on aquafarming procedures. Upon successful completion of a demonstration project in Norway, the companies will explore commercial operations in Norway and other parts of Europe.

BAL CEO Daniel Trunfio called the agreement with Statoil a game-changing partnership and said it will allow his company to accelerate the commercialization of its technology. "The significant commitment of resources and funds from Statoil further validates BAL's market opportunity and pus us with an elite group of companies in our industry who have partnered with established oil and gas companies to bring technology to market," he said.

BAL is also involved in a similar seaweed-to-ethanol project in Chile. The company is partnered there with Chile's national petroleum refining company, ENAP, and received a $7.3 million grant from the Chilean Economic Development Agency to support its efforts. In the U.S., BAL and DuPont are working to commercialize BAL's seaweed conversion technology to produce butanol rather than ethanol. That project received a $9 million grant from the U.S. DOE's ARPA-E program earlier this year. Butamax Advanced Biofuels LLC, DuPont's joint venture with BP, will commercialize technology produced as a result of the BAL-DuPont collaboration.

In November 2009, Statoil's venture capital segment, Energy Capital Management, invested in BAL in order to accelerate the company's seaweed, or macroalgae, conversion technology. Following the investment, Lars Nordii, Statoil's vice president for biofuels, said BAL's technology matched Statoil's mission to provide energy to the world in a responsible manner. "Having surveyed many possible biofuel technologies, we believe that macroalgae is a low-cost, scalable, and sustainable biomass that has large potential both in Norway and internationally," he said. "Potential cooperation with Bio Architecture Lab will give us the opportunity to supply Statoil's customers with a high-end sustainable biofuel." Statoil did not release the amount it expects to invest in the strategic partnership, but said funding will follow a stepwise approach subject to BAL meeting certain milestones.

In addition to BAL's activities, Statoil has financial interests in two other European cellulosic ethanol projects. It has provided funding to Weyland BioEthanol A/S, which will use an acid hydrolysis process to convert feedstocks such as wood residues, corn stover, sawdust and switchgrass at a rate of up to 2 metric tons per day. The pilot plant in Bergen, Norway, is set to begin operations in October, according to Statoil. The company is also a partner in the Kalundborg Cellulosic Ethanol Project, which is focused on commercializing Inbicon A/S cellulosic technology. Other partners in that project include DONG Energy, Royal DSM, the German Biomass Research Center and several universities.