As competition for state and federal research grants becomes tighter, universities researching alternative energy and energy efficiency are turning to an unlikely source of financing: Big Oil.
Five of the world's largest oil companies -- BP PLC, Chevron Corp., ConocoPhillips Co., Royal Dutch Shell PLC and Total SA -- have given more than $550 million in the past two years to university research programs that are studying ways to turn biomass into gasoline, use subsurface imaging technology for geothermal and nuclear applications and convert algae into fuel.
The funding represents pocket change for the companies, which had net profits of $200 billion during the same time period and planned capital expenditures of at least $100 billion this year. And while the money raises some questions about independent research, cash-strapped universities are finding themselves more and more dependent on oil dollars for funding.
"One of the advantages of working with industry is that they are providing more resources than are available through federal grants on a large scale," said Chris Somerville, director of the Energy Biosciences Institute, a research partnership among the University of Illinois, Lawrence Berkeley National Laboratory, BP and the University of California, Berkeley. EBI began operating in late 2007 with $500 million from BP.
"From our perspective, it's within the remit of a big, public university -- whose single main purpose is to address the climate change problem -- to research and to engage with companies that actually have a significant impact on what the industry looks like," Somerville said. "We can't have academics on one side hoping that industry will do the right thing. We're much better off to engage them directly."
And while each of the companies has extensive in-house alternative energy research programs, the companies also see a benefit in partnering with universities.
"You have at the universities resources for research that we just don't have," said Bill Graham, a spokesman for ConocoPhillips, which pledged last July $5 million to the Colorado Center for Biorefining and Biofuels. The center, known as C2B2, is a joint venture of the University of Colorado, Colorado State University, the Colorado School of Mines and the National Renewable Energy Laboratory that investigates ways to create the next generation of low-carbon fuels, including fuel from pond scum. In 2007, the company also gave $22.5 million to Iowa State University for biofuels research.
"Certain universities are noted for their research in certain areas, and it's a good resource for us to capitalize on things like that," Graham said.
Capitalizing on reputation is likely what Total was aiming for when it forged a $5 million partnership with the Massachusetts Institute of Technology in December to research new subsurface imaging technologies that are crucial for geothermal energy production, carbon sequestration and, potentially, nuclear waste disposal -- as well as traditional oil and gas extraction.
And Shell's hand-picking last September of six new biofuels research partnerships with global universities -- including MIT, the University of Campinas in Brazil, the Chinese Academy of Sciences, and Manchester University and Exeter University in the United Kingdom -- likely was also an attempt to tap the research programs' expertise and resources.
"Shell's in-house biofuels R&D is longstanding, leading and globally coordinated," said Graeme Sweeney, Shell's executive vice president for future fuels and carbon dioxide, in a statement. "However, we know that adding to our knowledge through genuine and nimble partnerships with top experts worldwide will be critical to the speed and success in the fast-moving area of biofuels."
Chevron looked to its home state of California -- specifically, the University of California, Davis -- for a $25 million biofuels research collaboration to develop technology to convert non-food agricultural waste into next-generation transportation fuels.
"California has been a pacesetter in energy efficiency, so it's fitting that one of the state's leading universities and California's largest company should partner on the next generation of energy efficiency," said John McDonald, Chevron's vice president and chief technology officer, in a statement.
But partnerships between Big Oil and institutions that have long prided themselves on maintaining independent and unbiased research programs are likely to raise some eyebrows.
"There is an inherent conflict between the interests of universities and the interests of corporations," the Center for Science in the Public Interest wrote last year in a report criticizing energy companies' funding of university global warming-related research programs. "University research is supposed to work toward the common good. Corporate research is primarily aimed at maximizing profits."
Somerville said EBI at Berkeley has remained free from BP's influence in the research sector.
"When [EBI] was first announced, it triggered an outcry on [Berkeley's] campus by people ... who felt there was a danger in accepting a large amount of money supported by industry," Somerville said. "I think that's a normal concern at universities."
At EBI, BP has played virtually no role in steering the institute's research, Somerville said. After a team of 15 faculty members and one BP engineer selected 85 research proposals to compete for BP's funding, a team of scientists from outside the university and BP partnership narrowed the selections down to the 50 projects that ultimately received funding, Somerville said.
Still, BP maintains a presence at EBI. Fourteen BP engineers are stationed at Berkeley, and they collaborate daily with the Berkeley biologists and other scientists.
"BP sees itself as a big chemical engineering company, and it's very helpful for us -- not doing the process engineering ourselves -- to get feedback from them on what the engineering might look like," Somerville said. "It's a new, novel innovation to be able to see the implications of our research when it's thought through."
"BP has a strong record -- it's the second-biggest photovoltaic company, it's a big wind company, and it's now exploring whether it wants to be a big cellulosic company -- with a clear plan of moving toward renewables," said Somerville, who in addition to directing the program is a biochemist and conducts research on how cellulose is made. "Why wouldn't we want to support that? Many people have come to recognize the value of the partnership."
But other research programs may not have the same independence from their industry benefactors. At MIT, for instance, Total will have a seat on the energy institute's governing board, which "provides key input on the direction and success of the initiative's research portfolio," according to a statement released by the company.
"Basic and applied scientific research at the nation's universities has been key to many of society's greatest technological discoveries. This will undoubtedly be true as the United States and the rest of the world struggle to create and adopt an energy system that preserves the global environment," says the Center for Science in the Public Interest report. "It is crucial that universities maintain their independence from the commercial pressures of the fossil fuel and other carbon-emitting industries so their researchers can explore ideas and solutions with no obvious commercial benefit."
To do that, the report recommends prohibiting representatives of corporate donors from sitting on research programs' governing boards, keeping donors from controlling the direction of research programs, eliminating intellectual property clauses from donor agreements, barring industry scientists from using campus resources, and ensuring that company representatives cannot suppress research or delay publication of scientific studies.
Exxon Mobil's absence
Notably absent from the recent industry-university research collaboration trend is Exxon Mobil Corp., the largest of the "supermajor" oil companies. With a two-year net profit of nearly $86 billion and capital expenditures of $26 billion in 2008, the company has kept the purse strings shut -- at least when it comes to funding alternative energy research at universities in the past two years.
Just last month, Exxon Mobil CEO Rex Tillerson said the company was not investing in existing alternative energy technologies because "we think these technologies are old. If there is going to be a fundamental shift" away from fossil fuels, he said, the technology "hasn't been discovered."
The oil giant did give $100 million to Stanford University in 2002 to help fund the Global Climate and Energy Project, which is also supported by General Electric Co., Toyota Motor Corp. and Schlumberger Ltd. But that research is primarily focused on developing technologies to lower greenhouse gas emissions.
"We have that ongoing program with Stanford University, and what they're doing is looking at breakthrough technologies that could have an impact in the future," said Exxon Mobil spokesman Chris Welberry. "[Tillerson] was not talking about research; he was talking about investment in deploying existing technologies. At this point, we don't see the current generation of those technologies having an impact on energy supplies in the future."
But Exxon Mobil, as well as the other companies, was quick to note its generous support of math and science education programs -- if not specifically of alternative energy research programs at universities.
"We focus on programs that improve the capacity of the country to generate engineers and scientists that are needed not just for oil and gas but for all technology industries," Welberry said.
The overall amount of funding from the oil majors for the past two years was corrected at 2 p.m. EST.
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