Posted July 14, 2009

ExxonMobil Corp. is making the largest investment to date in algae biofuel research and development with a $600 million commitment over the next five to six years. Emil Jacobs, vice president of research and development at ExxonMobil, said in a news conference following the announcement July 14 if the research proceeds as expected there will be continued investments in the billions of dollars to commercialize algae as an alternative energy feedstock.

The major oil company will be devoting half that investment to internal efforts, with potentially more than $300 million going to the privately held California research firm Synthetic Genomics Inc. "This agreement between SGI and ExxonMobil represents a comprehensive, long-term research and development exploration into the most efficient and cost effective organisms and methods to produce next generation algal biofuel," said Craig Venter, founder and CEO of SGI. "We are confident that the combination of our respective expertise in science, research, engineering and scale-up should unlock the power of algae as biological energy producers in methods and scale not previously explored."

Under the terms of the agreement, SGI will work in a systematic approach to find, optimize, and/or engineer superior strains of algae, and to define and develop the best systems for large-scale cultivation of algae and conversion of their products into useful biofuels. ExxonMobil's engineering and scientific expertise will be utilized throughout the program, from the development of systems to increase the scale of algae production through to the manufacturing of finished fuels. A new research facility is being planned in the San Diego area as part of the project.

ExxonMobil has looked at all biofuel options over the past couple of years, Jacobs said, examining the scalability, technical challenges, environmental performance and economics. "Algae biofuels rose to the top," he said. The company identified three research areas, one of which is the algae strain development SGI has been working with. The second area will be looking at the three major production systems now being considered in the emerging industry- open ponds, closed ponds and photo bioreactors. The third piece will be to develop the large, integrated systems that pull it all together. "We need improvements in all three areas," he added. The goal will be to produce lipids as a biocrude that can be processed in existing refinery systems and distributed as a green hydrocarbon fuel in the existing transportation fuel infrastructure.

Scientists at SGI have been working internally for several years to develop more efficient means to harvest the oils that photosynthetic algae produce. Traditionally, algae have been treated like a crop to be grown and harvested in a process that can be expensive and time consuming. One of SGI's achievements has been in engineering algal strains that produce lipids in a continuous process and even secreting hydrocarbons directly. However, such engineered algae may ultimately not be cost effective, he said. "It may cost more to build bioreactors that would contain the engineered algae." As part of the project, SGI will investigate thousands of strains, looking for desirable properties such as tolerance for high sunlight levels and concentrations as well as viral resistance. "There's a wide range of algae in the environment and we're finding a lot of exciting varieties," he added.

The size of the ExxonMobil investment in algae development is seen as encouraging for the budding algae industry. "Algae is now being validated as a legitimate feedstock," said Riggs Eckelberry, president and CEO of the algae technology firm OriginOil Inc."Algae is going to have a long-term outlook with an investment like this."