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Combine the billion-dollar-balance sheet of oil giant Exxon (s XOM) and the brain power of genomics guru Craig Venter and what do you get? Algae fuel’s big breakthrough. Last year, Exxon announced a $600 million development deal with Venter’s startup Synthetic Genomics, which has been using genetic engineering to develop productive strains of algae, and today the partners have officially opened their algae test facility at Synthetic Genomic’s HQ in La Jolla, Calif.
The greenhouse facility is the first step in figuring out if Synthetic Genomic’s algae fuel can move beyond the lab environment and be produced economically at a larger scale. The next step will be an outdoor facility that the partners will build by 2011.
Given startups and large partners often times announce these types of deals to much fanfare and media attention, only to let the deals disappear into oblivion, it’s interesting to hear that there’s been some progress made on the collaboration. Over the past year, Synthetic Genomics says it has identified and isolated a large number of algae strain candidates, has been researching the best conditions under which they will grow, has started designing productive reactors, and has been closely tracking the greenhouse gas emissions, land use and water use of the different options.
Synthetic Genomics recently had a world-changing breakthrough. For those of you that don’t read the news, Venter officially became God in May when his team successfully created the first synthetic bacterial cell — in other words, the first artificial life form. A synthetic life form could be uniquely suited to help fight climate change and aid in uncovering new energy sources because a designer organism could be developed to only perform certain tasks, like converting sugar to ethanol, which would result in a very efficient process. Natural microbes have other life priorities like, say, replication, but a synthetic organism can be created to perform one function only.
Now producing these efficient algae strains economically at scale is the real challenge. As Venter has said, if algae fuel companies can’t generate billions of gallons of fuel, then they are “just playing” and “wasting investors money.” That’s where Exxon comes in: Oil companies will likely be the key to cracking the algae fuel code.
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