BP plans to make an initial investment of some $100 million reais (US $59.8 million) in return for its 50% equity stake, assuming all required approvals are obtained, and provide additional funding that will bring the total to approximately R $1.66 billion (US $1 billion).
Brazil's President Luiz Inacio Lula da Silva and his administration have been busy countering claims that growing sugar cane to produce ethanol is a big factor in the recent surge in food prices around the world, as well as being a net contributor to greenhouse gas emissions as a result of forest clearing. Addressing the media recently he dismissed such claims as an "absurd distortion."
But some question BP's commitment to alternative forms of energy:
Greenpeace equated the BP-Husky joint venture to a crime against the environment and pledged to take action against it. Mike Hudema, a climate campaigner with Greenpeace in Edmonton said that, "not only will these developments produce 100 million tons of greenhouse gases annually by 2012 but [they will] also kill off 147,000 sq km [56,000 sq miles] of forest that is the greatest carbon sink in the world."
BP disputes these claims. According to company statistics, BP's biofuels sales accounted for some 10% of the global market in 2007, a year in which it blended and distributed 763 million US gallons of ethanol and about 1 million US gallons of biodiesel. In Europe, the multinational energy major sold 344 million liters of ethanol and 847 million liters of biodiesel in 2007.
But we are only at the beginning of the biofuels movement:
Can ethanol be an environmentally, as well as economically, feasible source of fuel? "Yes, if done correctly, but remember we are at the very beginning of the biofuels/biorefinery revolution," Prof. Blaschek maintains...
"Think of it in terms of the petroleum refinery of 100 years ago. It was pretty basic with only limited products being made. Today thousands of products are made at a petroleum refinery. Lots of efficiencies and new processing technologies need to be brought to bear to the biorefinery of the future in order to make this all truly sustainable."