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

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.