VentureBeat

Hayward, Calif.’s Mendel Biotechnology, an agricultural biotech, raised an undisclosed sum in a fourth round of funding, VentureWire reports (subscription required). The funding accompanied a development deal with the U.K. energy giant BP; Monsanto, a major developer of genetically modified seeds and a longtime Mendel partner, also participated.

The BP deal centers on the development of new genetically modified strains of grass that could be used to produce cellulosic ethanol. The production of ethanol from grasses and similar cellulosic sources should theoretically be more efficient than existing corn-based derivations, since the process utilizes the entire plant and not just its grains.

There’s a notable story in the SF Chron about miscanthus, a tropical “superweed” so tough and prolific that it looks to be a promising source for cellulosic ethanol — good for the environment and potentially translating into bundles of cash for farmers.

This is ironic, because the efforts to grow it — see story — are part of a $500 million effort by UC Berkeley’s partnership with the University of Illinois at Urbana-Champaign, funded by British oil giant BP.

Critics says the funding is a way for big oil to meddle with the research agenda of top universities, and protests have sought to stop the funding. But the program will support “hundreds of scientists in a push to create cheap, abundant vehicle fuels from sources of renewable carbon including farmed trees, manure, garbage and customized energy crops,” the Chron’s piece reports.

Fears of nefarious corporate influence on academic freedom prompted howls of protest at UC Berkeley when oil giant BP announced five months ago that it had selected the campus to host its $500 million biofuels research project. But in the Midwest, where UC Berkeley’s research partners at the University of Illinois at Urbana-Champaign will work on the agricultural side of the problem, there was little if any ruminating over the power dynamics of such a large industry partnership with a public university.

Here’s our original piece about the UC-Berkeley-BP partnership.

(Photo above is courtesy of UIUC. The woman standing next to the giant plant is 5′4”, demonstrating the plant’s size.)

Range Fuels, the Broomfield Colo., company racing to build the first commercial plant for producing a more efficient form of ethanol, got closer to that goal after being awarded a $76 million grant by the U.S. Department of Energy.

This is significant because cellulosic ethanol, made from crop waste, switchgrass, woodchips, and other bio refuse, is much more efficient and cleaner than regular corn ethanol, and could help the nation in its quest for alternative energy sources (click on image above for more info about cellulosic ethanol).

The grant was part of $385 million awarded by the DOE for biorefinery projects over the next four years. Details of the DOE’s grants are here, and it includes six companies, including Range, and a description of what they do.

Range’s chief executive Mitch Mandich told VentureBeat Wednesday morning that he still thinks Range will be first to build a commercial plant to make cellulosic ethanol. That’s because he’s using a “thermal conversion” method, which he says is more efficient than the “enzyme” methods being used by his competitors, such as Iogen and Broin.

Enzymes are tricker and more expensive to make, he said, and those other companies are giving a range of about 2009 or 2010 before they become available. Range hasn’t given a firm date, but plans to beat those timeline comfortably, he said. He was previously backed with $3.3 million from Silicon Valley’s Khosla Ventures

Range’s plant will be located in Soperton, Georgia, and will use pine tree waste and other material.

Other companies receiving grants were BlueFire Ethanol, Alico and Abengoa Bioenergy Biomass.

Iogen, of Ottawa, is also venture-backed, having received about $67 million from Goldman Sachs, Royal Dutch Shell and the Canadian government. It is building an 18 million gallon per year plant in Shelley, Idaho. The definition of a commercial facility is one that produces 10 million gallons per year.

Tortilla prices are going up, causing hardship for the poor in Mexico, apparently because of all the use of ethanol in the U.S.

The U.S. is making lots of ethanol out of corn, to use as an alternative to gasoline — creating a shortage of corn for people wanting to make tortillas. Indeed, there some 100 more ethanol plants being planned, which will eat up even more corn — and this comes despite doubts about whether using corn ethanol for environmental reasons is really worth it. It has marginal benefits.

Besides, UC Berkeley’s Tad Patzek has long warned there isn’t enough land to grow all the needed corn, and that continued production could lead to grotesque and obscene environmental destruction.

At the same time, as we’ve discussed before, the infrastructure corn ethanol production creates may be helpful, because it paves the way for the efficient distribution of the different cellulosic ethanol, which can be made from waste, residue and plant parts other than the corn kernel itself — and is much more beneficial to the environment. In other words, the corn ethanol boom is a stop-gap measure which, while costly in the short-run, could lead to huge paybacks in a few years. (See the argument of Vinod Khosla here). Although, even here, Patzek appears to disagree; there’s not enough land to produce these alternative plant sources, either, he says.

Other notes on the “global warming” front:

–Oil and gas industries are still getting subsidized, too, which helps make those fuels cheaper, and so provides less incentive to find alternatives. House Democrats are locked in a fight to change that.

–Meanwhile, a promising bipartisan climate change bill has just been introduced by Senators John McCain (Rep.) and Barack Obama (Dem.). This is significant because they’re both strong candidates for the U.S. presidential elections next year. It calls for mandatory caps on greenhouse gas emissions from power plants, industry and oil refineries.

The legislation would require that US greenhouse gas emissions be cut by 2% every year. The senators say that as a result of these cuts, emissions would drop back to 2004 levels by 2012, and to 1990 levels by 2020.

By 2050, the equivalent of 2100 metric tonnes of carbon dioxide would be emitted each year, down from 6100 metric tonnes in 2004, they say. In contrast, the United Nations’ Kyoto Protocol, which the US has not ratified, requires that parties return their emissions to 5% below 1990 levels. Whether or not this Kyoto target will be sufficient to avoid a global temperature rise of 2°C • often used as a threshold beyond which the world would face “dangerous climate change” • is cause for debate.

Mascoma, a Cambridge, Mass. start-up that is trying to become the first commercial developer of cellulosic ethanol — something some environmentalists see as the most promising prospect for alternative, anti-global warming fuel — has won $14.8 million more in financing.

This comes after the company raised $30 million in fresh funding last month from Silicon Valley venture firm Kleiner Perkins and others.

The latest award, given by New York State Department of Agriculture and Markets and the New York State Energy Research and Development Authority, is for Mascoma to build a $20 million cellulosic ethanol plant in Rochester, New York. The plant will be the first commercial cellulosic ethanol plant in the U.S. to produce ethanol from wood-based biomass.

We wrote previously about the company here.