A couple of years ago Exxon Mobil CEO Rex Tillerson told a crowd in Houston not to expect him to get into biofuels anytime soon.
“Well, I’m not an expert in biofuels. I’m not an expert in farming,” Tillerson said, generating a few twitters of laughter. “I don’t have much technology to add to moonshine.”
This week the company said it is taking a small swig of the brew with the announcement it is investing $600 million in a new biofuels venture. (It probobly helps that Craig Venter , the guy behind the firm , is pretty well-known).
“Exxon Mobil is kind of the last one to jump on this bandwagon,” Divya Reddy, a biofuels analyst with Eurasia Group told the Chronicle’s Kristen Hays, referring to a broader trend of oil companies taking stakes in biofuels ventures. “But this sort of solidifies that trend — even if companies are heavily focused on oil, they are aiming to diversify.”
Fadel Gheit, an analyst with Oppenheimer & Co., said that public pressure may have pushed Exxon Mobil to examine biofuels, but he doubts the investment will affect its bottom line. $600 million isn’t much for a firm with $45 billion in profits last year, but “it’s very prudent, and one should not close any door.”
Venter spoke at CERAWeek last year about his company’s work, where he made a few cryptic comments about pending deals. A small sample of his conversation with Daniel Yergin from the our blog at the time:
After Venter and his colleagues finished sequencing the human genome “we asked what areas of science were the most important,” he said. The human genome project is helping with medicine, but he and his colleagues felt the use of fossil fuels and its environmental impacts were key.
“It can work on scale, but whether it can be done on manufacturing scale has yet to be proven,” Venter said.
“If this is a nine-inning game, what inning are we in now?” CERA Chairman Daniel Yergin asked.
“I think we’re still designing the field,” Venter said.