ExxonMobil takes a gamble on algae biofuel

Substantial investment in money and time is needed for algae biofuel to become viable, even on an extended timeline out to mid-century. While big players like Shell and Chevron have abandoned the effort, ExxonMobil continues work.

algae biofuel
In the midst of algal growth tanks, researcher Brian Dwyer views a sample prior to a turbidity measurement. Image: Sandia National Laboratories via Flickr. CC BY-NC-ND 2.0

Algae biofuel research had an early surge in the 1970s-90s. Then, during a brief window of time, from roughly 2009 to around 2017, this alternative fuel technology became the darling of the renewable alternative energy industry. It was hailed as a solution to many of the world’s climate woes due to algae’s ability to capture carbon without significantly raising food prices, as was potentially the case with other biomass fuels sourced from corn, soy and sugarcane.

Predicted to be a big winner, algae biofuel was fast-tracked into research and development by biotech companies in league with major corporations, including Shell, Chevron and Exxon.

But, after numerous setbacks, failed tests and enormous unanticipated production costs, algae biofuel today is no longer a firm favorite, with many companies dropping out of the race, including both Chevron and Shell.

Still, even with its initial shine dulled, it remains today a tantalizing nature-based climate change solution, with some companies — including ExxonMobil — still actively pursuing it.

What are algae and algae biofuels?

“What are algae?” proves to be a surprisingly complex question. They are among the simplest organic producers in the world, using light and carbon dioxide to make biomass. Green algae, for example, use photosynthesis to grow. But algae aren’t only classed as plants. Rather, they’re a highly varied and genetically diverse group of organisms hailing from across four biological kingdoms: Bacteria, Chromista, Plantae, and Protozoa.

Latest research estimates that there are anywhere between 30,000 and 1 million algae species on Earth, with diversity that astounds, ranging from microscopic diatoms (single-celled marine organisms that produce more than 20 per cent of the world’s oxygen), to giant sea kelp (reaching heights of 100 feet, or 30 metres). Algae contain the building blocks of all organic life: proteins, lipids, carbohydrates and nucleic acids — with lipids especially and potentially useful in energy production.

Making algae into biofuel starts in a lab, where each strain is tested and then modified genetically to grow faster and be richer in lipids, the non-water-soluble fatty acids that produce algae oil, the essential ingredient of the hoped-for liquid biofuel. According to recent research by the Indian Institute of Technology, microalgae can contain 15 to 77 per cent oil, making it an attractive candidate for biodiesel.

Finding, testing and finessing algae strains to grow stronger and faster — turning them into biofuel superstars — is what’s called bioprospecting. And doing so is both expensive and time-consuming.

Over the years, achieving a revolutionary algae biofuel technology breakthrough (rapidly growing and developing lipid-rich algae in the lab) was seen by the industry as the equivalent of being dealt a royal straight flush in poker: something to be worked and hoped for, but very hard to achieve in the alternative fuels game, and always a long shot.

But creating the perfect microalgae would be just the first step. Then researchers needed to harvest the algae, break down the cell walls with chemical solvents, then extract the inner lipids, proteins and carbs, which undergo a final processing step to convert them into biofuel. Then, of course, there was the need to scale up the entire process, growing the microalgae at an industrial scale in vast outdoor pools requiring huge amounts of land and tremendous quantities of fresh or salt water.

This daunting complexity explains why the algae biofuel industry today continues to be a specialised and very expensive game, only played by those who can afford and tolerate high risk. Whether it’s scientists playing against time; venture capitalists betting for big short-term gains over distant long-term profits; or biotech firms trying to make a fast buck, without spending two, to achieve a viable product — most are ultimately losing against the house.

Some major players stymied by the science

Most innovation in algae biofuel technology is funded and pursued by private companies such as Algenol in Florida, or Synthetic Genomics in Southern California. However, the U.S. government has also played a major part in funding projects and partnering with private organisations in the quest to find the ultimate algae strain (or several together) that will compete successfully on a cost-effective level with fossil fuels.

Historically, for most companies, that winning hand never came, or may be still decades away. Companies including Algenol and TerraVia Holdings (formerly Solazyme) that initially invested heavily in algae biofuel in the first decade of the aughts pivoted away from the search several years ago, instead producing algae-based consumer goods. Some, like Sapphire Energy, despite the pivot, folded. As already noted, both Shell and Chevron, which originally invested heavily in the technology, have abandoned the effort.

Why the frenzy, then decline? What has been learned across companies and organisations, in labs and government offices, is that the science is a lot tougher than initially thought.

While other renewable energy alternatives, namely solar, wind and geothermal, have made big strides over the last 15 years in terms of innovation, cost reduction and implementation, algae biofuel still languishes in the research and development phase.

Even with advancements in gene editing such as CRISPR technology, it will likely take a lot more investment — many millions of dollars — to make the algae biofuel science work, say experts. And most companies, initially backed by venture capitalists, don’t have the second- and third-round funding needed to stay in the game.

Biofuels are one of our most promising paths to zero-carbon aviation and shipping.

Jennifer M. Granholm, secretary of energy, United States

Government support critical

In the early Wild West days of alternative energy investment, algae biotechnology looked so promising that the US government ponied up in a major way.

Biotech firm Solazyme, for example, was awarded approximately $22 million to construct an algae biorefinery project by the US Department of Energy (DOE). During its meteoric rise, Solazyme also received a Department of Defense contract to provide the US Navy with algae-based fuel, while also collecting numerous national renewable energy accolades. Then, in 2017, TerraVia Holdings, formerly Solazyme, filed for Chapter 11 bankruptcy.

Today, after the pullout of many private companies, and a number of costly failed attempts at producing a working liquid fuel out of algae at scale, it’s a lot harder to create lasting partnerships, or to acquire federal funds.

US government officials, such as Dan Fishman, the technology manager at the DOE’s Bioenergy Technology Office (BETO), remain pensive but hopeful for algae’s future. “We are really excited about the decarbonisation products coming into the economy and are driving our efforts,” he says, referring to US President Joe Biden’s goal to greatly reduce greenhouse gas emissions via a massive overhaul in climate change policy.

In fact, the administration is turning again to biofuels to help answer some of the nation’s more head-scratching energy problems. “Alternatives that might make sense for cars don’t really work with the aviation industry,” notes Fishman.

As recently as April, the DOE had committed $61.4 million to new biofuel research, and is currently taking proposals. “Biofuels are one of our most promising paths to zero-carbon aviation and shipping,” said Secretary of Energy Jennifer M. Granholm.

Still, Fishman says he is hesitant to make any precise algae biofuel forecasts, but says the DOE and its partners are on track to meet a commitment to demonstrate significant algae growth on a specified amount of land, and to scaling up production in outdoor ponds by 2025.

A 2050 goal, reached via public and private partnerships, is to discover, finesse and produce an algae strain that proves itself to be cost-competitive with fossil fuels on the energy market.

How the science works

Amanda Barry is the research and development manager at Sandia National Labs in Albuquerque, New Mexico. She is also the primary investigator for the DOE’s BETO. Her specialty is “leveraging algae traits for fuels.”

For her, a good day in the lab is when the algae stay green, because many, she explains, die overnight while in the genetic-testing phase.

Once a good strain is found in one lab, it is shared and tested nationally with DISCOVR, a consortium of laboratories dedicated to testing algae for fuel.

Along with tailoring algae cultivation systems, researchers at Sandia are also trying out methods to make algae grow faster, and capable of being grown outdoors in large raceway ponds, where a paddle keeps the water in constant motion.

The royal straight flush Sandia Labs is seeking is a strain of algae with precisely the right lipid chain to ultimately be used as a jet fuel.

Synthetic Genomics teams up with ExxonMobil

Synthetic Genomics, a biotech company founded 15 years ago, is headquartered in La Jolla, California, a locale rich in both sun and saltwater, making it ideal for algae research.

The company has another big biofuel industry edge, however. Synthetic Genomics is one of the last major biotech labs to have an invaluable partnership with a large corporation that can throw millions of dollars into research and development. That partner is ExxonMobil, the world’s largest publicly traded oil and gas company.

In 2017, ExxonMobil announced that it, along with Synthetic Genomics, had used CRISPR gene-editing technology to produce an algal strain that the oil company said could pave the way to a low-carbon fuel and a sustainable future that would “reduce the risk of climate change.”

But after years of research, and so many other high-tech industry failures, some environmentalists question the motives of ExxonMobil’s ongoing funding of research to find the Holy Grail: the ultimate energy-producing microalgae strain.

Critics particularly wonder whether the fossil fuel giant (known for its long-running climate disinformation campaigns) may be more interested in the PR and greenwashing opportunities offered by being associated with the alternative biofuel technology.

Ever since the 2017 CRISPR announcement, ExxonMobil has used social media — including FacebookInstagram and Twitter — to share its “Miniature Science” campaign, claiming that microalgae could “fuel the trucks, ships and planes of tomorrow,” while taking CO2 out of the environment, according to a critique by Joseph Winters, published in the Harvard Political Review.

We don’t think [algae biofuel] will ever compete, it’s just not going to happen. Oil and petroleum have a 150 years head start.

Michele Rubino, business development, Synthetic Genomics

Analysts point out that algae biomass, whether used as fuel, a food or drink supplement — all algae, everywhere, in fact — will indeed take CO2 out of the environment. But critically, everything depends on scale.

Current algae biofuel cultivation capabilities cannot even remotely offset the massive amounts of carbon that ExxonMobil’s nonrenewable fuels pump into the atmosphere annually — the company’s net greenhouse gas releases totaled approximately 120 million metric tonnes of carbon dioxide equivalent emissions in 2019.

Regardless of ExxonMobil’s motives, Synthetic Genomics seems secure in its partnership, and even continued its research during the pandemic. Michele Rubino, a Synthetic Genomics representative, said the company has doubled down on its algae research in the last three or four years, divesting from other programs to commit solely to finding a solution to the algae problem.

However, he is straightforward and realistic about algae’s potential to replace nonrenewable fuel. “We don’t think it will ever compete, it’s just not going to happen,” Rubino says. “Oil and petroleum have a 150 years head start.”

So why keep at it? Rubino explains that while the work is slow and steady, progress is being made. The company went outdoors two years ago, and its pond-grown strains are showing promise of keeping the company’s and ExxonMobil’s goal of producing 10,000 barrels per day of algae fuel by 2025. According to its latest report, ExxonMobil’s current daily output includes 4 million barrels of oil and natural gas.

The long road ahead

Whatever happens with the ExxonMobil-Synthetic Genomics collaboration, their path to fruition is fraught with troublesome stumbling blocks.

Contamination is one concern: What happens, ask environmentalists, if and when gene-altered algae find their way into the natural world? Could a robust microalgae, genetically modified to grow super-fast, disrupt ecosystems, wreaking havoc on native algae and other aquatic organisms?

Rubino assured Mongabay that the algae developed in the Synthetic Genomics labs are more threatened by the natural world than the opposite. “Because they are grown in a lab, it makes them remarkably disadvantaged in the real world,” he says.

The US Environmental Protection Agency seems to agree with that assessment. It recently approved one of Synthetic Genomics’ strains for outdoor use. To obtain that approval, the algae needed to be tested in air, soil and water.

Other questions: water, land, fertiliser and energy consumption. When biotech companies began experimenting with large outdoor algae ponds, freshwater usage was a major concern, though most research today, including that by Synthetic Genomics, is using plentiful saltwater to grow algae.

The use of large amounts of synthetic nitrogen and phosphorus fertiliser for cultivation is another worry, as global overuse has already drastically destabilised Earth’s biogeochemical natural cycles of nitrogen and phosphorus, causing vast ocean dead zones. Another large issue is the amount of energy and land area needed to bring algae biofuel production up to scale.

That question of scale may be the ultimate sticking point: even if ExxonMobil and Synthetic Genomics achieve their 10,000 barrels per day production goal by 2025, that is just a drop in the bucket compared to the 97,103,871 barrels of oil used planetwide every day. Upscaling algae biofuel to compete against the oil produced worldwide is clearly a long time away.

Which begs the question again: why keep investing? Why continue down this long, hard road, when payout may be minimal, falling far short of the grand dream of a world-saving renewable fuel empowered by human ingenuity — a royal straight flush for the ages?

Just like algae’s potential, the end game remains to be seen.

This story was published with permission from Mongabay.com.

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