Exxon’s algae to join biofuel push

ExxonMobil and Craig Venter, the pioneer of human genome research, have set up a $600m partnership to research the potential for making biofuels from algae.

Mr Venter told the Financial Times that the joint venture was “critical for the whole world” but warned that commercial deployment could be 10 years away.

“There has been so much hype and hope about the potential for algae that this announcement should act as a reality check for everyone,” said Mr Venter.

“We are not saying we are going to have millions of tonnes of algae next year.”

The move is a break with Exxon’s general lack of enthusiasm for alternative energy.

Rex Tillerson, the company’s chairman and chief executive, has generally been sceptical of biofuels, including advanced “second generation” fuels such as cellulosic ethanol.

Mr Venter said he was “surprised and very pleased” that Exxon had stepped up its efforts on biofuels. Exxon plans to spend $300m on its internal costs for the venture, and up to $300m more with Synthetic Genomics, Mr Venter’s company.

Emil Jacobs, Exxon’s vice-president of research and development, said the company had spent two years evaluating options for investing in alternative energy, assessing their growth potential, technical challenges, environmental impact and chance of commercial viability. “Taking those parameters, biofuel from algae seemed to have the best potential,” he said.

The venture will research the use of algae to produce biofuels resembling petrol and diesel, or a form of crude oil that could be processed in Exxon’s existing refinery network.

Algae scores over other biofuel crops in that it does not require agricultural land and drinkable water in order to grow; just sunlight, water in ponds or tanks, and carbon dioxide.

Exxon will look at siting growing tanks next to fossil fuel power stations or oil refineries to take advantage of their carbon dioxide emissions.

But while Mr Venter, like other biotech entrepreneurs and big oil companies including Royal Dutch Shell and Chevron, has been able to produce small amounts of oil from algae, no-one has yet managed to demonstrate the process at a large enough scale or a low enough cost.

One recent estimate suggested that biofuels currently produced from algae cost about $33 per gallon.

Mr Venter said he expected that the algae used would have to be genetically modified.

Over time, engineered products will be essential to this project, said Mr Venter. “It’s the only way we can change the yield far beyond nature, and make the algae resistant to virus attacks and so on.”

Algae can already produce almost 2,000 gallons of fuel per acre of land used, compared with just 250 gallons per acre for corn-based ethanol, but Exxon hopes to raise this yield.