Exxon Mobil teams up with San Diego Company

A San Diego biotechnology company led by genomics pioneer J. Craig Venter has landed a deal with Exxon Mobil that could include more than $300 million in funding to develop biofuels from algae.

Venter, best known for his role in sequencing the human genome, said yesterday that his company Synthetic Genomics is planning a local greenhouse and test facility to study thousands of strains of algae from around the globe.

The eventual aim is to engineer algae that would use energy from the sun to convert carbon dioxide into oils and hydrocarbons in large quantities – a feat that would be prohibitively expensive with naturally occurring algae.

“The biggest source of energy on the planet is sunlight,” Venter said. “This is an attempt to intelligently capture that energy, convert it to hydrocarbons and put it to modern use in society.”

The program, which includes another $300 million in in-house spending at Exxon Mobil, is the biggest push so far into biofuels for an oil company that has been criticized for not spending enough on renewable fuels.

Emil Jacobs, a vice president at Exxon Mobil's research unit, said the company has had a team at work for two years looking at various biofuel options the company could pursue.

He said biofuels from algae rose to the top as the team looked at criteria that included the potential to produce large quantities of fuel, the likelihood of overcoming technical challenges, the environmental effect and economic feasibility.

Still, the companies emphasized that the work is very much at an experimental stage. They said it could take five to 10 years to get production facilities running, with billions of dollars in additional investment necessary beyond that to reach large-scale operation.

“This is first and foremost a research and development program,” Venter said. “We're not claiming we know the answers here.”

The reason algae represent a potential fuel source is that as they grow, drawing on sunlight and carbon dioxide, they accumulate fats and bio-oils that have molecular structures similar to traditional crude oil.

This bio-oil is then extracted or harvested from the algae and processed further in existing refineries, just as crude oil is refined today to produce gasoline, diesel and other fuels.

Jacobs said in a conference call with reporters that finding an algae strain that is particularly productive would be just one of the key areas to study.

A second will be identifying the best production system, either a pond or a device known as a bioreactor. It will also be challenging to develop systems for large-scale production.

Among the advantages of algae the companies claimed over competing biofuel methods is that they don't require using agricultural land. Algae also consume carbon dioxide, thus mitigating greenhouse gases.

Stephen Mayfield, an algae scientist at The Scripps Research Institute in La Jolla, said the deal represented a strong validation of the algae approach. Some critics, including proponents of alternate biofuels such as cellulosic or corn-based ethanol, have said large-scale algae-based fuel production will take years to perfect, if it ever happens at all.

“This is a watershed day for algae biofuels,” Mayfield said, “because one of the most sophisticated companies in the world has surveyed the entire field, and this is where they placed their bet.”

Mayfield said Exxon Mobil's decision to work with Synthetic Genomics would also go a long way toward establishing San Diego as the top global center for research in algae biofuels.

Mayfield was part of a group that recently started the San Diego Center for Algae Biotechnology, together with the University of California San Diego and other research institutes and companies. Synthetic Genomics is not part of that effort.

The growing number of biofuel companies in the region includes commercial algae farms in the Imperial Valley. San Diego's Sapphire Energy last year produced algae-based diesel for a test flight of a commercial jet.

Environmentalists who have questioned Exxon Mobil's interest in new fuel sources also said the deal with Venter's company could be a big step forward.

Research director Kert Davies of Greenpeace, which has run a campaign to urge Exxon to focus on renewable fuels, said that if Exxon Mobil pursues the work in earnest it could have large effects.

“This money is enormous compared with other money that has been spent on algae,” Davies said. “So it's a game-changer as far as algae.”

Synthetic Genomics employs about 100 people, and the company anticipates hiring as many as 100 more for the Exxon Mobil work. Venter said his company received hundreds of résumés as word of the project spread yesterday.

The $300 million in funding is not guaranteed, but Exxon Mobil said it hopes to pay Synthetic Genomics at least that much “if research and development milestones are successfully met.” The companies did not disclose how much of the funding is contingent on that progress.

Before getting into biofuels, Venter was the founder of Celera Genomics, a company that became famous for competing with the government-sponsored Human Genome Project to sequence all the genes found in the human species.

He has long ties to San Diego, having received his doctorate in physiology and pharmacology from UCSD. He set up Synthetic Genomics in Torrey Pines in 2005.

The privately held company has previously announced research collaborations with energy giant BP and the Asiatic Centre for Genome Technology in Malaysia.

Venter said he first got involved with biofuels in the 1990s when his team made related discoveries in the course of its genomics work. Then, after sequencing the human genome, he said he identified renewable energy and climate change as an area where he could apply his expertise to benefit society.

“This is a unique opportunity,” Venter said, “to see if our science can literally help save the planet.”

Source: Sign on San Diego