Paul Beckwith: It’s my pleasure, Monica. Nice to meet you.

Monica Trauzzi: Paul, Butamax is a joint venture between BP and DuPont that’s developing and commercializing biobutanol for the transportation sector. What role does biobutanol play in helping refiners sort of push through that blend wall?

Paul Beckwith: It’s a really good solution for refiners because it basically enables them to double the amount of biofuels that they blend in their fuel mix in a way that’s compatible with the existing infrastructure and at the same time, to improve their economics for biofuel blending. So it’s a very good solution for refiners.

Monica Trauzzi: So the current environment for ethanol is quite challenging. How many ethanol facilities are actually looking at the option of retrofitting to biobutanol production?

Paul Beckwith: Well, so I think there’s a large number. Butamax has signed up eight companies which represent 11 facilities in total who have joined Butamax’s early adopters group. So these are ethanol producers who are interested in being on the first wave of conversions to repurpose their facilities from ethanol production into butanol production.

Monica Trauzzi: All right, can you give me some names and also what the expectations are for impacts on profits?

Paul Beckwith: So, dealing with the profits first, I mean butanol is a more valuable product to the market because it creates value in the refiners. So ethanol producers, if they become butanol producers, will be able to make a more valuable product and therefore, you know, sort of significantly increase the profitability of their facilities. So companies in Butamax’s early adopters group, there’s Highwater Ethanol in Minnesota. There’s Big River Resources. They own four ethanol plants, a number of others. There’s eight in total, as I say.

Monica Trauzzi: So, it may sound like sort of a miracle fuel, but there are some issues in terms of its effectiveness as compared to ethanol. How do you address those issues? Isn’t ethanol a much more efficient fuel?

Paul Beckwith: That’s not correct, actually. So butanol offers higher fuel efficiency than ethanol and it also has more favorable properties for blending into gasoline. So actually, overall, the properties of butanol are better from the point of view of both the refiner and from the consumer’s perspective.

Monica Trauzzi: But how much research has actually been done to that end? I mean, what are you basing these facts on?

Paul Beckwith: A huge amount. Yeah, we have run very, very extensive tests both for our own purposes. We’ve done work jointly with the auto industry. We’ve done work for the EPA associated with the approvals. We’ve actually run a million and a half miles of vehicle tests on butanol and we actually supplied butanol to BP, who were the official supplier for fuels for the London 2012 Olympics and so a portion of the Olympic fleet was running on butanol produced by Butamax.

Monica Trauzzi: How much do we know about the toxicity of biobutanol and how much more testing is required to understand the impacts on people and the environment? How much do we know?

Paul Beckwith: We know a lot. So, butanol has been around as an industrial chemical for many years, so it’s been thoroughly researched. There’s full toxicology data available on butanol, and it basically has very similar properties to ethanol in terms of its environmental properties. So there’s huge amounts of data, and the EPA actually have a full dossier from Butamax that we prepared and they’re currently assessing that.

Monica Trauzzi: So then why don’t we see ethanol companies jumping on the biobutanol bandwagon?

Paul Beckwith: Well, we think they will. It’s a great opportunity for ethanol producers to expand their business and when the time is right, so we’re currently converting or just about to start the conversion of a facility to butanol, so we want to prove the technology at commercial scale first and then once we’ve proven it at commercial scale in one facility, we’ll then be ready to make it available broadly across the industry.

Monica Trauzzi: So you mentioned what DOE and EPA have done here. They’ve funded some butanol research and development. How would you qualify the level of support coming from the government towards this fuel?

Paul Beckwith: So Butamax is a private company. We’re funded by our investors, which are DuPont and BP, fully funded. So this effort has been private sector investment and we’ve actually invested large amounts in bringing this technology to market.

Monica Trauzzi: So let’s talk politics. What is butanol’s role in the current discussion we see happening in Washington right now on the renewable fuel standard?

Paul Beckwith: Well, so firstly, let me say, you know, I think it’s good to review the renewable fuel standard to ensure that it’s achieving what it set out to achieve. I mean, our view is that when it’s assessed, that everyone will conclude that it’s actually doing what was intended. We see it’s actually working well at the moment. It’s creating an environment that actually encourage biofuels into the market. It has stimulated a huge amount of investment both government and private sector investment and, you know, we can see that it’s creating an environment where there’s increased demand for more biofuels and better quality biofuels.

Monica Trauzzi: So the House Energy and Commerce Committee is releasing a series of white papers on the renewable fuels standard, and in the latest one, Chairman Upton and ranking member Waxman wrote, “The assumptions that were made back in 2007 when the RFS was first put into place of falling domestic supply and rising demand have given way to the reality that is precisely the converse,” and they’re talking about oil demand versus our need for renewable fuels. Because the playing field has changed, shouldn’t the rules also be taken a look at and perhaps revised?

Paul Beckwith: Well, as I say, I think it’s entirely appropriate to review it. But I don’t think the fundamental driver between the renewable fuels standard has changed. So the fundamental driver was energy security in the USA to create a market that has energy independence, and biofuels and increased levels of biofuels are, in our view, the best way of supporting that objective. So even though total demand has reduced, I mean, that’s obviously beneficial to energy security as well, biofuels and biobutanol in particular can still play a very big role in contributing to reducing energy, sort of foreign oil demand.

Monica Trauzzi: So if there is a revision to the RFS, do you anticipate any specific impacts on your business operations or investments that you’re seeing?

Paul Beckwith: So, I think that there is an issue around confidence in policy support in general in the industry. Butanol as a molecule actually creates value in its own right, so it’s not dependent on regulation or the RFS in order to have an economic case for using it. But nevertheless, I mean, we are supportive of the RFS because we think it creates a good policy framework within which to, you know, for companies to invest and repurpose their facilities to produce the products that help deliver that policy.

Monica Trauzzi: All right, an interesting discussion. Paul, thank you for coming on the show.

Paul Beckwith: My pleasure, thank you.

Monica Trauzzi: And thanks for watching, we’ll see you back here tomorrow.