Big Oil Looks to Biofuels

19 Oct 09

The biofuels industry, hit hard by the global credit crunch, is getting a shot in the arm from a new source–the oil majors. Among the oil companies, BP PLC and Royal Dutch Shell PLC have been the most active investors in the sector. But it's even beginning to attract more-conservative companies like Exxon Mobil Corp., whose chief executive, Rex Tillerson, once famously dismissed corn-based ethanol as "moonshine." Exxon announced in July it was investing $600 million in an algae-to-fuel start-up, Synthetic Genomics Inc. Oil companies' profits are driven by traditional, fossil-based gasoline and diesel. Biofuels are alternatives that have a marginal market presence. So why switch to switchgrass? The answer is the low-carbon policies now being put in place across the developed world. The biofuels industry also is benefiting from a sharper investment focus among the big oil companies.
http://online.wsj.com/article/SB10001424052970204731804574386960944758516.html?mod=googlenews_wsj