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Craig Venter: Without Scale, Algae Fuel Companies "Playing"

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Craig Venter, considered to be the father of genomics and the founder of synthetic biology startup Synthetic Genomics, said there’s a fundamental problem with algae fuel at the Wall Street Journal’s Eco:nomics conference on Thursday: in his view if algae fuel companies can’t generate billions of gallons of fuel then people are “just playing” and “wasting investors money.”

In other words the algae companies need to be able to reach the scale at which the oil companies currently operate to be competitive. “That’s the real bugaboo for everybody,” said Venter. To address that hurdle, last July Synthetic Genomics announced that it was partnering with ExxonMobil on a $600 million algae biofuels program.

Synthetic Genomics is different than many of the algae fuel companies out there — Venter estimated there are 200 or so — because Synthetic Genomics is looking to use its synthetic genetic processes to tweak algae and other microorganisms to create synthetic super bugs that can crank out as much fuel as possible. Such genetically-altered bugs could consume CO2 and create synthetic hydro-carbons that could be a fuel replacement.

Venter said the synthetic genomic process could one day fundamentally change not just fuel and transportation, but food supply, medicine, and clean water. Venter and his crew at the J. Craig Venter Institute have already created a completely synthetic bacterial genome, which they claimed back in 2008 was the largest man-made DNA structure ever. Now Venter and the researchers are “extremely close” to activating the synthetic bacteria chromosome in a new cell which would make “the first synthetic species,” and will be their “proof of concept,” as Venter put it at the conference. That’s some crazy stuff.

In the algae fuel world Venter said he didn’t think the process had much competition. But there are other startups working on synthetic biology including Amyris Biotechnologies, and LS9.

Biofuel firms are well aware of their “scaling issue” and, like Synthetic Genomics, are turning to the big oil and gas giants for partnerships. The CEO of algae fuel startup Solazyme, Jonathan Wolfson, told me last year that “We will likely commercialize our technology with a big oil partner. It’s delusional to think that companies with that amount of scale and trillions of dollars of infrastructure won’t play a key role.” Solazyme has a development deal with oil giant Chevron (s CVX). Amyris has formed a joint venture called Crystalsev, in conjunction with Santelisa Vale, Brazil’s second-largest sugar grower, and the jv aims to produce 200 million gallons of fuel a year by 2011 at several of its existing ethanol plants at a price of less than $2 a gallon.

Algae fuel player Sapphire Energy has said that it is ramping up its production estimates to 1 million gallons of algae-based diesel and jet fuel per year by 2011, 100 million gallons per year by 2018, and 1 billion gallons per year by 2025.

Image courtesy of NREL.

16 Responses to “Craig Venter: Without Scale, Algae Fuel Companies "Playing"”

  1. SteveK9

    Biofuels of whatever type are nonsense. In 20 years it will be obvious that mankind’s energy will come from nuclear in this century and for many after. This will not be led by the US or the Europe but by Asia.

  2. Hey great article! I have recently wrote an article that discusses the progress made by two algae bio fuel companies. Check it out! New Technology goes through three stages:
    First it is ridiculed by those ignorant of its potential
    Next, it is subverted by those threatened by its potential
    Finally, it is considered self-evident.
    This article is in response to an Oil Drum article linked below.
    Take a look at the article to get a good understanding on how I shaped my response.
    The Oil Drum article may have been relevant when published back in may of 2009 but many of these limitations have and will be overcome by advances in technology, along with increases in private and public investments.  With global investment in carbon capturing in the billions, the race has been set to see which companies can emerge as technology leaders.  The companies that do succeed will only realize success when they integrate their technologies with one another to create a superior technology.  These integrations will help push the industry forward and eventually will create a paradigm shift in carbon capturing. 
    The scenario for success I just explained, closely resembles Origin Oil and MBD Energy’s current relationship.  Many are ignorant and threatened by the potential of capturing carbon to produce biofuel, they simply say “It can not be done.”   Step one and two regarding phases of new technology complete.  The oil drum article vaguely communicated to readers the failure of Green Fuel and with Green Fuel’s failure tried to subvert their audience into believing if one fails, they all fail!  This notion that if one fails all fails holds very little weight.  Present day knowledge and opportunities to turn carbon into a viable fuel source has become self evident.  
    When a technology becomes self evident it has reached it’s final stage, commercialization.  This stage has been evolving the past year with major R&D projects being funded by the largest publicly traded oil companies in the world.  Bp, Shell, Royal Dutch and the biggest investor of them all Exxon Mobil are all in the race.  The big boys now consider these technologies self evident and see the need to invest in order to secure their competitive advantage amongst one another.  It is only a matter of time before we see the first industrial scale carbon capturing plant that can produce algae as a biofuel.  In my opinion MBD Energy and Origin Oil, through the integration of their technologies, will be the first to achieve this amazing feat.
    Origin Oil’s market strategy is unique because they look to integrate their technologies with other thriving companies to establish a competitive advantage.  They were voted by top 30 most transformative technologies in 2010. Their  portfolio consisting of 10 patent pending technologies are crucial to their success and are regarded to as industry game changers. CEO Riggs Eckleberry and CTO Dr. Brian Goodall combine for over 50 years of networking and industry experience. Origin Oil’s ability to create synergy between them selves and existing biofuel companies by integrating technologies will serve them well in the long run. This unique market entry strategy will drive their industry growth and will enable them to become industry leaders in technology innovation and integration.

  3. anonymous

    Algae researchers have spent over $2.5 billion dollars in grants (taxpayer money) and have not commercialized anything. All ponds have contamination issues and will never be used for industrial scale up. We are wasting money on ponds that will never work.

    The commercial scale vertical PBR’s will be used for industrial growing of algae. They have very little contamination if any and are currently generating almost 500,000 gallons per acre per year in algae biomass.

  4. Algaenon

    Aglae is a pipe dream. Direct production of ethanol or diesel antecedents will be the only game in town in five years. With synthetic bacteria, here are no obvious barriers to scale production, even all the way up to billions of gallons a year.

  5. Rich Hilt

    Venter’s right about scale.

    But raising algae is more than just about the fuel. Whether open pond, photobioreactors, or closed systems, along with “oil” you also produce lots of dead algae. Even for the best systems the margins are tight.

    A full scale open pond algae farm should be at least 1,000 acres. The “diesel” produced could cost slightly under $2.00/gal delivered to the “rack” (the place where petroleum products are stuffed into their tankers for delivery). This compares to about $2.00/gal that is the current cost for the refiners to produced diesel (from the most recent EIA figures). The cost (allocated) of the left over dead algae is about $600/metric ton, and as either animal feed (protein) or as an organic fertilizer you can get over $1,000/metric ton. The amount of oil versus “dead algae” will vary depending on the kind of algae you grow (or in Synthetic Genomics’ case the algae you build).

    And just one more thing…

    I’m glad that Venter and company have finally moved from being agnostic to being believers in algae. Thanks Exxon!

    • Brad Bartilson

      Note that what EIA provides is a % breakdown of the PRICE at the pump. The $2/gallon is what’s left for the refiners to make money on, so that includes their profit as well as their cost to produce.

      Cows and chickens don’t like algae meal…many have tried. Better to avert byproducts.

    • Alex from Ukraine

      Youa rigt. I hav inspired to produse aglae “spirulina platensis” in photobioreactors (closed sistems). This is a Great idea, batch is it stupped idea.