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BP could become the first major energy company to start commercial scale production of cellulosic ethanol in 2010 if all goes according to plan. BP has been partnering with Verenium Corporation to commercialize the latter company's process for breaking down cellulose into sugars.

BP goes on the offensive and plays defense in two news stories yesterday. First, we learn that BP Products North America Inc. has agreed to pay $161 million for "pollution controls, enhanced maintenance and monitoring, and improved internal management practices" because of Clean Air Act violations committed at a Texas refinery. The EPA's Catherine McCabe said that, "BP failed to fulfill its obligations under the law, putting air quality and public health at risk."

Verenium Corporation has been awarded a $7 million grant from the state of Florida and it will use the money to build its first commercial-scale cellulosic ethanol plant. The money comes through the state's Farm to Fuel initiative, something sure to enrage ethanol opponents. The plant, to be constructed beginning later this year in Highlands County, Florida, is expected to start generating fuel in 2011.

A demonstration plant in Louisiana is the latest entry in the cellulosic ethanol race. Verenium announced yesterday that the company is starting up a 1.4 million gallon-per-year plant in Jennings, La with the intended non-food feedstocks being stems and leaves. Verenium will use "specialty enzymes and Verenium's proprietary technology," the AP reports. By mid-2009, Verenium hopes to have a production plant up and running that can make 30 mgpy once the test plant proves that Verenium's cellulosic