Shell, Virent work on green gasoline alternative

Tom Bergin, Reuters 26 Mar 08;

LONDON (Reuters) - Oil company Royal Dutch Shell Plc and U.S. bioscience firm Virent Energy Systems are to research a gasoline alternative from non-food crops that would reduce CO2 emissions without driving up food prices.

Shell said in a statement that unlike ethanol, currently the main biofuel alternative to gasoline, the fuel it and Virent aim to develop will be able to run in existing vehicles without the need to modify their engines.

Today's gasoline engines can usually only run on a small amounts of ethanol blended with gasoline -- typically 5 percent. Much higher percentages can be used with modification.

The project follows a trend of major oil companies, including San Ramon, California-based Chevron and London-based BP, investing in plans to produce motor fuels from crops.

The companies are mainly focusing on second-generation biofuels, which will be produced from non-food crops which can be grown on land not suitable for wheat or sugar cane.

Environmentalists critical of the oil companies say the investments, which are at most around 1 percent of the companies' total capital expenditure, are public-relations stunts aimed detracting attention from the environmental damage caused by producing and burning hydrocarbons.

Shell and Virent did not disclose the amount they are investing in the project and gave no targets for achieving commercial production of the new fuel.

Last May, Shell and Madison, Wisconsin-based Virent announced a partnership to develop processes to manufacture hydrogen from biomass, using the same technology which the partners hope will now produce "biogasoline".

Graeme Sweeney, executive vice president, future fuels and CO2 at Shell, told reporters on a media call that the collaboration on hydrogen was still active.

(Editing by Quentin Bryar)