Virent Energy Systems Inc., a Madison company working to produce sustainable “biogasoline” from plant sugars, has named a former Lands’ End Inc. executive as chief financial officer and added a Shell Oil Co. executive to its board of directors.

Susan Healy, most recently senior vice president and CFO at Dodgeville direct merchant Lands’ End, will be responsible for the company’s financial, accounting, and information technology operations. Healy will report to Lee Edwards, Virent president and CEO.

Joining Virent’s board is David Jacober, who is the business opportunity manager-Americas team leader at Shell Downstream Inc. At Shell, he leads the development and implementation of large, strategic capital projects for process safety, growth and energy conservation across Shell’s global “downstream manufacturing” assets. Jacober has more than 30 years of refining experience with Shell Oil Co.

Virent is working with Shell and Cargill Inc. on Virent’s BioForming process, which converts plant sugars into hydrocarbon molecules like those produced at a petroleum refinery. Shell recently acquired an undisclosed equity stake in Virent as part of a $46.4 million financing round and gained a seat on Virent’s board as part of the financing agreement.

Virent began producing biogasoline in March at a demonstration plant in Virent’s facility in Madison. The latest round of financing will be used to scale the process to commercial production volumes.

For biofuels to make a dent in the U.S. fuel supply, big oil will have to get on board. Case in point: This morning biofuel startup Virent Energy Systems announced that it has raised $46.4 million from oil giant Shell and agriculture company Cargill.

Virent has developed a technology it calls bioforming, which is a thermochemical process that catalyzes sugars into hydrocarbons, creating molecules similar to those produced in oil refineries. The company says their process, developed at the University of Wisconsin-Madison, can use a variety of feedstocks including sugars, starches and cellulose, and the technology can make bio jet fuel, gasoline and diesel, as well as produce hydrogen.

The funding is the company’s third round, and Virent previously raised at least $40 million from Stark Investments, Venture Investors, Cargill Ventures, Honda, and Shell. Virent’s former CEO Eric Apfelbach told me a couple years ago that the company would have to raise a significant amount of funding to reach commercial scale over the next several years, and was also looking at fund raising through a possible IPO.

Of course scaling up the technology to produce these fuels on a commercial scale is the tricky part. That’s been the hard part for all of the cellulosic ethanol startups including ZeaChem, which broke ground on its pilot scale plant last week, Range Fuels, and Mascoma, and the algae folks, too, including Solazyme and Sapphire Energy.

But it’s the oil companies that will help these companies eventually reach commercial scale. Solazyme has a development deal with Chevron, and Exxon has a partnership and investment in Synthetic Genomics. BP has backed algae fuel maker Martek, and Tropical BioEnergia, a Brazilian company that plans to build two ethanol refineries in Brazil.

In March Virent and Shell started up a demonstration plant at its facilities in Madison, Wisconsin, as part of the development deal that Virent and Shell started in 2008.

Virent probably looks particularly attractive to the oil and car incumbents because the startup says it can produce fuels that can be used in current systems, in both vehicles and pipelines, and can be blended with gasoline. That means if Virent’s fuel became the standard, then oil and car companies wouldn’t have to invest in new infrastructure. Yep, they would like that quite a bit.

Today, Virent Energy Systems announced that it has closed its third round of funding totaling $46.4 million. Two of the company’s largest investors, Cargill and Shell, increased their financial commitments as part of this funding round as did all other current investors. The money will be used to advance the company’s efforts to bring to market its BioForming process, a patented catalytic biorefinery platform, to commercial production volumes. Virent is a company that specializes in converting plant sugars into sustainable advanced fuels for cars, trucks, trains, and airplanes.

“Virent has a competitive advantage from our strong relationships with two premier, global companies, Shell and Cargill. Their significant capabilities and expertise across the value chain will be essential to accelerating deployment of Virent’s BioForming technology at commercial scale,” said Lee Edwards, Virent President and CEO. “I am especially gratified that our accomplishments to date have resulted in a $46.4 million funding round, which is well above our initial $25-40 million objective.”

The agreement also expands Virent’s existing research and development collaboration with Shell for the production of biogasoline to include diesel fuel and awards Shell a seat on the company’s board.

Luis Scoffone, Vice President of Alternative Energies at Shell said, “This investment demonstrates Shell’s confidence in Virent’s catalytic biofuel production processes. The expansion of our joint technology program to include research into the production of diesel from plant sugars offers considerable potential and complements Shell’s wider biofuels portfolio.’’

Earlier this year, Virent announced its successful start-up of the world’s first biogasoline production plant. The plant currently produces more than 10,000 gallons per year of biogasoline and is taking the next steps to bring its product to commercial scale production. According to the company, their BioForming platform technology catalytically transforms soluble plant sugars into gasoline, jet fuel, diesel, and chemical molecules like those refined from crude oil. Their products can readily enter the market using existing pipelines and fuels pumps to power today’s vehicles at high blends.

Scott Portney, Corporate Vice President of Cargill, said of Virent’s technology, “Over the past four years, Cargill has supported Virent’s innovative sugars-to-hydrocarbons technology as it has evolved into a true biorefinery solution with the potential to help replace petroleum as the source of fuels and many chemicals. We also see the technology’s feedstock flexibility as an important characteristic to enable replacing the sugar source used in producing biogasoline with nonfood sources, such as sugars derived from lignocellulosic feedstocks.”

Today, Virent Energy Systems announced that it has closed its third round of funding totaling $46.4 million. Two of the company’s largest investors, Cargill and Shell, increased their financial commitments as part of this funding round as did all other current investors. The money will be used to advance the company’s efforts to bring to market its BioForming process, a patented catalytic biorefinery platform, to commercial production volumes. Virent is a company that specializes in converting plant sugars into sustainable advanced fuels for cars, trucks, trains, and airplanes.

“Virent has a competitive advantage from our strong relationships with two premier, global companies, Shell and Cargill. Their significant capabilities and expertise across the value chain will be essential to accelerating deployment of Virent’s BioForming technology at commercial scale,” said Lee Edwards, Virent President and CEO. “I am especially gratified that our accomplishments to date have resulted in a $46.4 million funding round, which is well above our initial $25-40 million objective.”

The agreement also expands Virent’s existing research and development collaboration with Shell for the production of biogasoline to include diesel fuel and awards Shell a seat on the company’s board.

Luis Scoffone, Vice President of Alternative Energies at Shell said, “This investment demonstrates Shell’s confidence in Virent’s catalytic biofuel production processes. The expansion of our joint technology program to include research into the production of diesel from plant sugars offers considerable potential and complements Shell’s wider biofuels portfolio.’’
Earlier this year, Virent announced its successful start-up of the world’s first biogasoline production plant. The plant currently produces more than 10,000 gallons per year of biogasoline and is taking the next steps to bring its product to commercial scale production. According to the company, their BioForming platform technology catalytically transforms soluble plant sugars into gasoline, jet fuel, diesel, and chemical molecules like those refined from crude oil. Their products can readily enter the market using existing pipelines and fuels pumps to power today’s vehicles at high blends.

Scott Portney, Corporate Vice President of Cargill, said of Virent’s technology, “Over the past four years, Cargill has supported Virent’s innovative sugars-to-hydrocarbons technology as it has evolved into a true biorefinery solution with the potential to help replace petroleum as the source of fuels and many chemicals. We also see the technology’s feedstock flexibility as an important characteristic to enable replacing the sugar source used in producing biogasoline with nonfood sources, such as sugars derived from lignocellulosic feedstocks.”

The April 20 explosion onboard the Deepwater Horizon, which killed 11 workers and unleashed millions of gallons of crude oil into the Gulf of Mexico, has renewed public calls for fuels that aren’t as toxic to the environment. The question is whether technology and public policy are within range of meeting the nation’s demand for “green” fuels. Scientists for years have shown they can produce liquid fuels from grass, leaves, wood and much more. But the question dogging the renewable fuels industry has always been “scale.’’

Can anyone out there produce these fuels on a scale needed to power the world’s cars and trucks?

That question took center stage earlier this month at BIO International, the world’s largest gathering of the bio-science industry, where many promising biofuels technologies were on display. But how soon can that promise be met?

“We’ve had a lot of industries tell us: Don’t show tell us you have the perfect molecule. Don’t tell us you can produce it for $1.05 a gallon. Show us you can do it at scale,’’ said Jonathan Wolfson, CEO of Solazyme, a San Francisco area company that has developed a system that uses algae to convert cellulosic materials such as wood and crop waste into “in spec” jet fuel.

“Each technology faces specific challenges to commercialization – and we have a long way to go to get to fuel scale.’’

The problems are well known. Fossil fuels are still plentiful, cheap and contain more BTUs of energy than alcohol fuels. And America uses a lot of energy – about 400 million gallons of gasoline a day just to power cars and trucks.

Dozens of companies are working on different solutions. Some are focused on making fuel from cellulosic material because it is abundant and cheap. At the same time, its sugars are locked tightly within its fibrous membranes so they’re difficult to economically extract – and the alcohol-based fuels from crop “sugars” are usually blended, not used a stand-alone source of fuel.

Solazyme’s technology takes wood and crop waste that has been processed to extract its sugars, which are then fed to algae microbes. The microbes produce oil nearly identical to jet fuel, which Wolfson called a “drop-in’’ fuel because it can be used by cars and trucks that won’t have to be modified.

While the technology can produce large volumes of fuel, Solazyme is operating with a pilot plant that is producing fuel at a pre-commercial scale. And even at full scale, a microbial fuel factory would not produce the amount of fuel in a year what a commercial petroleum refinery would produce in a day.

At Virent Energy in Madison, the process of producing larger amounts of fuel – also “drop-in” fuels because they are chemically identical to gasoline and jet fuel – is more advanced. But it will be quite some time before Virent, which has investors as large as Shell Oil, Cargill and Honda, can produce biofuels by the hundreds of thousands of gallons.

There are 30 cellulosic biofuel plants built or under construction, according to a report on the biofuels industry released this year. But most are small and many are still part of a research effort to “scale” future production plants. “The solutions will likely be regional,” said Troy Runge, director of the Wisconsin Bioenergy Initiative. “You’ll see different technologies in the southeast, such as algae and solar, where they have a lot of sun. In the Midwest, where we have a lot of rain but less light and heat, you’ll see other technologies that utilize grasses and wood which we have in abundance.’’

Runge said that conversion technologies to unlock sugars from plant materials are only a part of the equation. Also needed are the businesses and marketing systems necessary to collect, store and process the tens of millions of tons of cellulose feedstock materials required to produce enough fuels for a modern economy.

Still, there are examples of success. The U.S. ethanol industry, spurred by enormous government incentives, last year produced 12 billion gallons of ethanol alcohol – and Brazil converted its enormous sugar cane industry to a system that produces almost all of its transportation fuel.

The technologies are there. What’s needed is a consistent government policy that allows investors to put money in the best ideas and to stick with them as they scale up. Make no mistake: Oil will be with us for a long time. Without investment and policies that will bring biofuels production up to scale, the migration from oil will take that much longer.

PETALING JAYA: ACGT Sdn Bhd and Chromatin Inc have signed a memorandum of understanding (MOU) to pursue a long term research agreement to develop mini-chromosome technology.

The companies signed the MOU in conjunction with the Bio International Convention in Chicago.

ACGT, a wholly-owned subsidiary of Genting Plantations Bhd, is a centre of excellence in genomic science focused on the application of genome technology to improve crop plants for sustainable food and fuel.

Chromatin is a biotech company developing and marketing innovative technologies and products that benefit the agricultural, energy, chemical, nutritional and pharmaceutical sectors.

“This collaborative relationship with ACGT strengthens Chromatin’s business links with Malaysia, which began in late 2008 with an investment from The Malaysian Life Sciences Capital Fund,” said Chromatin chief executive officer (CEO) Daphne Preuss said in a statement yesterday.

“Chromatin looks forward to a mutually beneficial partnership with ACGT to develop biotech solutions which can increase productivity and enhance value creation for multiple crops,” she added.

ACGT CEO Derrik Khoo Sin Huat said the company’s partnership with Chromatin built on its success in establishing strategic business relationships with innovative technology companies.

“By working together, we can leverage the strength of both companies to responsibly produce sustainable agricultural products,” he said.

Formerly known as Asiatic Centre for Genome Technology Sdn Bhd, ACGT is a BioNexus status company.

About Chromatin:

Chromatin, Inc. is a biotech company developing and marketing innovative technologies and products that benefit the agricultural, energy, chemical, nutritional, and pharmaceutical sectors. Since 2000, the company has successfully developed and commercialized its proprietary gene stacking technology, which can be used to simultaneously, and precisely introduce multiple genes in any plant. Now, by deploying a broad and unique intellectual property platform, Chromatin is developing specialized sorghum feedstocks for the renewables industry. These next generation, high-quality feedstocks are being designed by Chromatin’s elite team of experts to meet the precise yield and performance requirements of the bioprocessing industry.

About ACGT Sdn Bhd (“ACGT”)

(Formerly known as Asiatic Centre for Genome Technology Sdn Bhd)

ACGT is a centre of excellence in genomic science, focused on the application of genome technology to improve crop plants for sustainable food and fuel. ACGT is a wholly-owned subsidiary of Genting Plantations Berhad, the plantation unit of the Genting Group, one of Asia’s leading conglomerates (www.genting.com). ACGT specialises in DNA sequencing, biomarker discovery, metagenomics and bioinformatics. Its Gasoline Tree Experimental Research Station in Sepang, Selangor has 22 hectares of jatropha experimental plantings. ACGT is a BioNexus status company, awarded by Malaysian Biotechnology Corporation Sdn Bhd, an agency under the purview of the Ministry of Science, Technology and Innovation Malaysia (MOSTI).

About Genting Plantations Berhad (“GENP”)

(Formerly known as Asiatic Development Berhad)

GENP, a 54.7%-owned subsidiary of Genting Berhad, commenced operations in 1980. Over the years, Genting Plantations has embarked on several significant acquisitions in Malaysia, thus increasing its land bank from a mere 13,700 hectares in 1980 to nearly 66,000 hectares currently. It has expanded operations into Indonesia since 2005 and is currently developing more than 68,000 hectares in Kalimantan through joint ventures. With this expansion, the Company now has a total landbank of more than 133,000 hectares. It also owns 6 oil mills with a total milling capacity of 265 tonnes per hour. Reputed to be one of the lowest cost palm oil producers, Genting Plantations is one of the early members of the Roundtable on Sustainable Palm Oil (RSPO).