BP to fund biofuel research institute

California and Illinois schools beat out competitors for a $500 million grant from the oil giant that will fund a new, huge energy lab.

Petroleum giant BP announced Thursday that it's setting up an institute with the University of California, Berkeley, and the University of Illinois dedicated to creating renewable energy.

The Energy Biosciences Institute will be funded by a $500 million grant from BP over a 10-year period as well as smaller matching grants from California. Scientists at EBI will explore such issues as carbon dioxide sequestration, transportation fuels produced out of or by microbes and crops that can be turned into transportation fuel.

Several universities sought to participate in program, which BP announced last June. MIT, Stanford University, and other universities have been expanding their energy and environmental engineering programs in recent years, and large, well-funded labs like the EBI can serve as a magnet for talented researchers worldwide. (Energy conglomerates, particularly petroleum companies, meanwhile, have complained about a lack of graduates in the field.)

The company selected the University of Illinois in part because of the school's strength in agronomy and biofuels. Berkeley, meanwhile, has become one of the centers for synthetic biology, a relatively new branch of genetics that involves exploiting natural processes for medical industrial use. Synthetic biologists combine genes from different animals to create a synthetic creature that secretes a desired chemical. They also try to reproduce naturally occurring chemicals inside a lab.

Jay Keasling, a Berkeley professor who runs the school's synthetic biology lab, for instance, has developed an antimalarial drug that can be made in a lab that is chemically identical to a naturally occurring, but hard to harvest, version of the same drug. Amyris Biotechnologies, a company founded on Keasling's research, is also working on developing synthetic microbes that can process sugars into transportation fuel. (John Melo, Amyris' CEO, also used to run BP's U.S. fuel operations and advised the worldwide CEO.)

Scientists from the Lawrence Berkeley National Labs will also participate in the EBI. Both universities and the Lawrence Lab have also been principal players in some of the biggest technological breakthroughs in the U.S. in the past 50 years.

Some of the areas of research at the EBI will overlap with the Helios project, a $250 million alternative energy research program sponsored by the Department of Energy. Helios grants are being awarded nationwide.

Partly because BP is from Europe, where governments and citizens more actively pursue green policies, it has been one of the more aggressive oil companies when it comes to embracing alternative fuels.

"This program will further both basic and applied biological research relevant to energy. In short, it will create the discipline of energy biosciences. The institute will be unique in both its scale and its partnership between BP, academia and others in the private sector," BP Group Chief Executive John Browne said in a statement.

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