Shell Invests in Virent, Producer of 'Biogasoline' That Outperforms Corn Ethanol

Shell Invests in Virent, Producer of 'Biogasoline' That Outperforms Corn Ethanol

By Scott Doggett June 8, 2010

Virent Energy Systems said today that it has secured $46.4 million from Royal Dutch Shell and more than a dozen other investors to scale up production of transportation fuels from plant sugars.

The investment round, Virent's third, expands a research and development collaboration with Shell and gives the Anglo-Dutch oil major an undisclosed equity stake in the biofuels startup and a seat on its board of directors alongside agribusiness giant Cargill Inc.

"This gives us the opportunity to continue and extend our research and development and commercialization efforts," Virent President and CEO Lee Edwards said in a statement. "We will work in collaboration with Shell in both of those areas."

The financing round comes two months after Virent started up a 10,000-gallon-a-year demonstration biorefinery, its first, in Madison, Wisconsin. Virent is using what it calls "BioForming" technology to turn beet sugars, provided by Cargill, into hydrocarbons with the same molecular composition and performance as petroleum fuels.

The resultant "biogasoline" is packed with up to 50 percent more energy per gallon than corn ethanol and may be brewed from a wide range of plants, including wheat straw, corn stover, sorghum and switch grass, Virent officials claim. The fuel may also be blended with petroleum at up to 50 percent and used in existing pipelines and vehicle engines.

Corn ethanol, which the United States produced a record 10.8 billion gallons of last year, is generally blended with gasoline at concentrations of 10 percent of less and is widely regarded as an environmentally atrocious biofuel. E85 - a blend of 85 percent ethanol and 15 percent petroleum - requires specially made fuel pumps and engines.

Scott Doggett:  is an AutoObserver.com Associate Editor.