Biofuels Commercialization by Oil Majors

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Source: GLOBE Foundation

At 30 billion gallons in 2011, the global biofuels industry has become big business. Although conventional biofuels derived from commodity crops account for the bulk of production today, a proliferation of national blending mandates have triggered a stampede to commercialize advanced conversion pathways that rely on low cost, non-food feedstocks.

Currently valued at over $2 trillion, the global transportation fuels market is one of the world's largest industries. Pike Research projects that total revenue from global biofuels production - both the conventional and advanced segments - will reach at least $171 billion by 2020.

Today's biofuels industry accounts for nearly 30 billion gallons of production. Still in its infancy, advanced biofuels production is just a trickle today, but the industry is expected to play an increasingly important role over the next decade due in part to mandates imposed in at least 31 countries worldwide.

With a stake in future oil production and 'easy oil' increasingly difficult to source, the world's largest oil companies have each charted strategies to bring biofuels to market at scale.

A common misconception is that biofuels are generally adverse to Big Oil's interest. The companies profiled in a new Pike Research report have collectively sunk billions into developing the industry over the last 5 years.

While a handful are pursuing near-term production via proven, first generation pathways, all acknowledge that advanced biofuels must play a strategic role in the future energy mix.

To varying degrees, these companies have established strategic partnerships and invested in innovative startups in an effort to build out integrated supply chain delivery networks. With the estimated cost of meeting emerging mandates over the next decade at $336 billion, access to the oil industry's capital and expertise will be critical to scaling up biofuels production.

This Pike report evaluates ten of the leading publicly-traded international oil majors and rates them on 12 criteria for strategy and execution, including production strategy and roadmap, partnerships, geographic reach, investment portfolio, distribution network, and market impact.

Using Pike Research's proprietary Pike Pulse methodology, companies are profiled, rated, and ranked with the goal of providing industry participants with an objective assessment of these majors' relative strengths and weaknesses in the emerging biofuels marketplace.

The Top 10 Vendors include: Shell, BP, Total, Petrobras, Chevron, Statoil, PetroChina, ConocoPhillips, Eni, and ExxonMobil.

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