ExxonMobil and Synthetic Genomics Open Greenhouse for Algae Biofuels Development

San Diego's Synthetic Genomics and Texas-based ExxonMobil (NYSE: XOM  ) celebrated the first anniversary of their strategic alliance today with the official opening of a greenhouse for growing and testing algae that could someday replace crude oil in the production of diesel and other fuels.

On this day last year, ExxonMobil announced plans to spend at least $600 million to develop next-generation transportation fuels from algae -- a renewable resource -- with $300 million directed to Synthetic Genomics, a five-year-old start-up that has assembled an all-star roster of biologists. The founders include CEO J. Craig Venter, the human genome pioneer, Nobel Laureate Hamilton O. Smith, and Juan Enriquez of Boston's Excel Venture Management.

The greenhouse, near Synthetic Genomics' headquarters atop San Diego's Torrey Pines Mesa represents the next step in a 1,000-mile journey to algae-based fuel production, figuratively speaking. The greenhouse is intended to serve as a facility bathed in real sunlight (instead of indoor laboratory lighting), where scientists can work to identify -- or genetically engineer -- the particular algae that is best-suited to serve as a biological feedstock in the existing fuel production infrastructure. The next major milestone in the program would be establishing an outdoor test facility, a step the partners would likely announce about this time next year.

"I like to think of this greenhouse as sort of a halfway house," Venter told a small crowd of dignitaries and journalists who gathered for the event under an intense Southern California sun. "Most of what you hear in algae research happens in the research laboratory. But things don't always translate well out from the laboratory bench to the scale that we need here, of literally billions of gallons of fuel if this is going to have any impact at all on shifting the CO2 levels or coming up with alternate sources of energy."

Growing algae in the greenhouse requires only sunlight, "which we have in abundance here today," and carbon dioxide, Venter said. Synthetic Genomics scientists are working with various types of both cyanobacteria (also known as blue-green algae) and eukaryotes. Promising batches begin in small glass flasks and are transferred in steps to larger containers, including 8-liter and 100-liter plastic bags (also known as photobioreactors) that hang on racks in the greenhouse. Algae also are grown in oval, raceway-like ponds stirred by paddlewheels.

One surprising detail that Venter disclosed: All the algae under cultivation in Synthetic Genomics' greenhouse are grown in saltwater taken from the Pacific Ocean, off the end of a pier near La Jolla. Algae thrives in both fresh water and saltwater, but Venter says he does not want to develop a process that takes agricultural resources by using fresh water. "Fuel cannot compete with agriculture if this is going to be successful," he said.

Another detail that stood out: Both Venter and Emil Jacobs, ExxonMobil's vice president of research and development, emphasized the safety and containment characteristics of the greenhouse unveiled today. Venter acknowledges that Synthetic Genomics plans to grow some genetically engineered strains of algae in the greenhouse.

During his talk, Venter told San Diego Mayor Jerry Sanders, who was in the audience, "Nothing will go into the drains, Mr. Mayor. San Diego is safe." A few minutes later, Jacobs raised the subject again, saying he wanted to reemphasize the safety and containment issue. "This is an important priority for us," Jacobs said. "We've got well-established procedures, and everyone on the team understands that this is important and we will follow the procedures."

Both men also emphasized the time and capital still required to develop algae-based biofuels. "We plan to spend $600 million on this program over the next decade," Jacobs said, "and it will require billions more to put this into commercial-scale production."

Algae normally produce "storage oils" that essentially consist of long hydrocarbon chains, which Jacobs said is comparable at a molecular level to so-called intermediate streams produced in refineries from petroleum-based crude oil. The goal is to discover or create a specific type of algae that optimizes the production of storage oils, and to develop economical methods for extracting and producing those oils.

At Synthetic Genomics, scientists are screening "thousands to tens of thousands" of different types of algae, according to Venter. While maximizing the production of storage oil is obviously a key criterion, Venter said there are "literally hundreds of parameters" that Synthetic Genomics scientists are tracking in their quest to find the right species.

"They are little biological machines, but they are complicated machines," Venter said.

At the ExxonMobil Research and Energy Co. in Fairfax, VA, scientists and engineers are working to identify the preferred design characteristics for optimizing algal production, Jacobs said. The options include growing and harvesting algae in open ponds, closed ponds, and "photo-bioreactors" that are like transparent bags or tanks.

"Part of the challenge of this program is that you can't do the biology and the engineering processes in isolation. They are intimately linked. So as we make advances on the algae strain side, we test that versus several production systems to see what is the best match. It's that integrated system that needs to be successful," Jacobs said.

"What we don't know yet is whether we can find the right combination of algae strains, growth systems, growing conditions, and production processes to make affordable, large-scale quantities of algae biofuels," Jacobs said. "This program will help us answer those questions."

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Bruce V. Bigelow is the editor of Xconomy San Diego. You can email him at bbigelow@xconomy.com or call 858-202-0492

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