Biocatalysis

Projections of the dramatic rise in ocean levels due to global warming have always seemed exaggerated to me given that the warming over the past century has not caused a significant rise in the oceans–Venice is, after all, still there. This week brought a formal retraction of an article published by eminent UK climate scientists: their model predicting rising ocean levels was found to contain errors that undermined the conclusions, and the scientific paper was formally retracted. Are you keeping up with the literature Osama bin Laden?

Producing fuel ethanol from corn has the problem that food crops are crowded out, putting upward pressure on food prices. Producing any biofuel from cellulose alleviates this problem, using, for example, corn cobs and stalks as the feedstock instead of corn. This is surely the future of biofuel production, but it is useful to put the cost and scale required to develop this technology into perspective.

Genera Energy has opened a 250,000 gallon per year demonstration cellulosic ethanol plant in Vonore, Tennessee that uses switchgrass as the raw material at a cost of $50 million. Now, 250,000 gallons may sound like a lot of ethanol until you consider that at a price of around $1.50 per gallon, it only equates to about $375,000 in sales at market prices. The scale of operation needs to be about 1000 times bigger for this technology to be competitive. Developing technology that operates at this scale is expensive.

Ethanol, and to a lesser extent biodiesel, have been the only biofuels products of note to be offered thus far. Why? For the simple reason that the technology already existed to make these products at a cost that allowed for commercialization without too large a subsidy. But, if one thinks about the ideal biofuel process, there is a much more attractive option being pursued at a number of early-stage biofuels developers.

Imagine a process that converts carbon dioxide–a greenhouse gas!–into a biofuel while growing in a pond or in sea water. This would be biofuels nirvana, and it may not be too far from becoming a reality.

Here are a few companies to watch.

Aurora Biofuels is using a genetically modified algae developed at the University of California at Berkeley to efficiently produce biodiesel using CO2 as the feedstock. The Aurora claims the technology can create biodiesel fuel competitive with $50 per barrel oil.

Synthetic Genomics approach does not use algae, but rather, specially created micro-organisms that are built by redesigning the genome almost form scratch. The ultimate goal is the conversion of carbon dioxide into fuels or commodity chemicals using energy from the sun to drive the process. Craig Venter, of genome-sequencing fame, leads this effort with up to $300 million in funding form Exxon Mobil. That kind of financial support gives Synthetic Genomics a good shot at success.

Solazyme was named the Biofuels Digest “Company of the Year,” ranking number one on their list of the 50 Hottest Biofuels Companies. Solazyme has also announced a near-term focus on launching food products produced by algae, with a food oil similar to olive oil as a lead product. This probably stands a better chance of  near-term commercialization since the prices are about 25 times higher than for a fuel. The hope appears to be that cash flow from a large-volume food product will help fund even larger-volume fuel production.

Sapphire Energy is developing a product the company calls Green Crude. The product is green because it is produced by algae from sunlight and carbon dioxide. If successful, Sapphire’s crude product will be refineable into the three most important fuels in use today: gasoline, diesel, and jet fuel. With more than 100 employees and blue chip venture capital support, Sapphire bears watching.

Compared to bio-ethanol companies, algae companies have been lurking in the shadows, but they may be about ready to pounce.

Biofuels Digest released its 50 Hottest Biofuels Companies for this year and Solazyme is number 1, now well-established as a leader in the use of algae to produce biofuels. Read our  profile of Solazyme from March 22, 2009 here.

Shell has announced that it is creating a $21 billion joint venture (that’s billion, with a B) to produce fuel ethanol with Brazilian ethanol producer Cosan. Sugar cane will be used as the feedstock. The venture will be one of the top three ethanol producers in the world–so far.