Company Profile: Blue Marble Energy

A couple of months ago I met the founders of Blue Marble Energy at a party for the Apollo Alliance.  Following up, I sat down with the CEO, Kelly Ogilvie, to learn about Blue Marble, which is the only "algal biofuel" company I have come across that really makes sense to me.  (While at the party, I also chatted with Congressman Jay Inslee for quite a while.  Smart fellow.  Anyone interested in energy policy should have a look at his book, Apollo's Fire: Igniting America's Clean Energy Economy.)

Full disclosure: Blue Marble and Biodesic may begin collaborating soon, so I am not an entirely disinterested observer.

Blue Marble Energy is built around the idea of "recombining" existing biological processes to turn biomass into valuable products.  From the website: "[Blue Marble Energy] uses anaerobic digestion to generate natural gas and other valuable bio-chemical streams."  The company is distinguished from its competitors by its focus on using micro- and macro-algae harvested from natural blooms, including those caused or enhanced by human activity, as feedstock for artificial digestion systems modeled on those of ruminants.  Blue Marble combines different sets of microbes in a series of bioreactors to produce particular products. 

In other words, Blue Marble is using industrialized, artificial cow stomachs to produce fuel and industrial products.

The company's general strategy is to first digest cellulose into synthesis gas (carbon dioxide and hydrogen) using one set of organisms, and then feed the synthesis gas to organisms that generate methane or higher margin chemicals and solvents.  The company expects to produce 200-300 cubic meters of methane per wet ton of algal feedstock.  While biofuels are an obvious target for technology like this, the company also recognizes that fuels are a low margin commodity business.  Thus Blue Marble also plans to produce higher margin industrial products, including solvents such as various esters that sell for $400-800 per gallon.

While other companies are attempting to directly produce fuels from cultured algae, Blue Marble believes these efforts will be hampered by growth limitations in most circumstances.  Biofuel production from algal lipids synthesized during photosynthetic growth requires conditions that cause metabolic stress, resulting in lipid production, but that also limit total biomass yield to ~2-5 grams per liter.  In contrast, Blue Marble "respects the complex ecology", in the words of Mr. Ogilvie, and relies on photoheterotrophic growth of whatever happens to grow in open water.

Blue Marble has already obtained contracts to clean up algal growth caused by human activity around Puget Sound.  The company typically harvests ~100 grams per liter from these "natural" algal blooms.  Future plans include expanding these clean up operations around the U.S. and overseas, and growing algae in wastewater, which would provide a high-energy resource base for both closed and open system growth.  In principle, because the technology is modeled on ruminant digestion, many different sources of biomass should be usable as feedstock.  Experience thus far indicates that feedstocks with higher cellulose content result in higher yield production of fuels and solvents.

Compared with other algal biofuel companies, Blue Marble does not presently require high capital physical infrastructure for growing algae.  However, the company will rely on marine harvesting operations, which bring along a different set of complexities and costs.  I wonder if the company might be best served if it outsourced harvesting activities and focused on the core technology of turning biomass into higher value products.

While the Blue Marble is not now genetically modifying their production organisms, this will likely prove a beneficial move in the long term.  Tailoring both the production ecosystem and the metabolisms of component organisms will certainly be a goal of competitors, as is already the case with companies spanning a wide range of developmental stages, including DuPont, Amyris, and Synthetic Genomics.  Yet whereas modified production organisms grown in closed vats are likely to face little opposition on any front, genetically modified feedstocks grown in open waters are another matter.  For the time being, Blue Marble has an advantage over plant genomics companies because in the company's plans to use unmodified biomass as feedstock, whether algae or grasses, it will avoid many regulatory and market risks facing companies that hope to grow genetically modified feedstocks in large volumes. 

They have a long way to go, but in my judgement Blue Marble appears to have a better grasp than most on the economic and technical challenges of using algae as feedstock for fuels and materials.

Further reading:

"It came from the West Seattle swamp - to fill your tank", Eric Engleman, Puget Sound Business Journal, August 8, 2008

"Swamp fever", Peter Huck, The Guardian, January 9 2008
http://www.guardian.co.uk/environment/2008/jan/09/biofuels.alternativeenergy

"New wave in energy: Turning algae into oil", Erica Gies, International Herald Tribune, June 29, 2008

"Coskata Due Diligence"

Oliver Morton at Nature pointed me to a bunch of excellent posts on Coskata by Robert Rapier at R-Squared.  Recall that Coskata wants to gasify cellulose and feed the resulting synthesis gas to bugs that make ethanol.  Here are Rapier's "Coskata"-tagged posts.

Among other points, Rapier makes some nice back of the envelope estimates of the technical and economic feasibility of Coskata's process.  In short, Coskata's claims appear to be consistent with the laws of thermodynamics, but perhaps not so much with the law of supply and demand, and their logistics challenges might border on being inconsistent with the consevation of matter.

Basically, it all, err, "boils down" to the fact that Coskata is probably going to get tripped up by their focus on ethanol and the consequent energy cost of separating ethanol from water.  Even if you have a nifty process for turning cellulose into ethanol, it takes a large fraction of the energy in the cellulose to purify the ethanol.  And it really doesn't matter whether you distill or use a membrane -- the entropy of mixing still hoses you even if you somehow escape the specific heat of water and its enthalpy of vaporization.

Now if you hacked the metabolic pathway that consumes synthesis gas so that the bug made something more interesting like butanol, or a gasoline analog, that either had lower miscibility or even phase separated, that would really be something because it would minimize the energy cost of purification.

Great work, Mr. Rapier.  And many thanks, Oliver.

"The Big Squeeze: New Fundmantals for Food and Fuel Markets"

Bio-era recently released a new report describing our latest thinking about the future of food and fuel markets.  In the short term, we could be in for an even bumpier ride than we have seen so far.  Over the longer term, new technologies (biological and otherwise) will profoundly alter our ability to produce non-fossil fuels and will thus alter the structure of the economy.  But the sheer size of the petroleum and gasoline markets will continue dominate energy markets, and our economy, for many years to come.

Click on the image to  obtain the report -- as with previous releases you can purchase a copy from a print on demand service or download a PDF after registering.

Here is the Introduction:

In recent years, rising prices for agricultural and energy commodities have heightened interest in the economic fundamentals governing these markets. This report presents bio-era’s latest thinking on some of these fundamentals, and how they may be changing in unanticipated ways. Part of what we explore here concerns the interactions between the principal “long forces” affecting these markets, including the forces of climate change, the limits of conventional crude oil supply expansion, and the impacts of continued underlying growth in global populations and economies. Not surprisingly, we foresee these long forces acting in combination to place additional upward pressure on fuel and food prices, and we present a model for thinking about the dynamics at work in what we hope is a simple, but useful, way.

In addition, we also consider the growing linkages between agricultural and energy commodities, and how these linkages might affect current and future pricing dynamics within and between these markets. Under one, very specific set of conditions, we believe that price signaling between these markets could lead to a self-reinforcing feedback loop — which if left unchecked — could result in steadily escalating clearing prices.  The theoretical effect we describe is akin to an “evolutionary arms race” or a “red queen effect.” Should market circumstances ever give rise to the price dynamic described here, the implications could be far-reaching. Energy and food prices could rise steadily as a result, at great cost to the global economy. Continuing globalization might even be placed at risk. For these reasons, and because these theoretical possibilities have gone largely unnoticed to date, we felt it worth calling special attention to them here.

Here are the "Key Findings":

• Despite seven years of rising real prices for crude oil and a doubling of prices over the past year, global crude oil production has been nearly flat since 2005.
• The production of biofuels--in the form of ethanol fermented from sugars and starches, and biodiesel derived from vegetable oils and animal fats - has increased significantly and is now an important source of supply satisfying year over year increases in global liquid transportation fuel consumption.
• There are two principal connections between the crude oil and petroleum product markets and many of the so-called "soft" agricultural commodities such as grains, sugar, and vegetable oils:

1. an input-cost effect on agricultural commodity prices because oil and energy-intensive fertilizers account for a significant share of total production costs for most major crops;
2. an output-price effect prices of petroleum products such as gasoline or diesel oil set a floor price for agricultural commodities that can be converted into fuel substitutes.

• The first of these connections--the input-cost effect--is "one-way." The cost of petroleum will influence agricultural commodity prices over time, but the reverse is not true--the cost of agricultural commodities will have little or no effect on the costs of producing, transporting, and refining petroleum.
•  The second of these connections--the output-price effect--is increasingly "two-way." As volumes of agriculturally-derived fuels grow, expanding or withholding these volumes from the petroleum product markets directly influences both the price of petroleum products and the price of agricultural commodities.
• The result is competition between food and fuel end-use markets to price at a level sufficient to attract (and/or preserve access to) marginal supplies. Attempting to hold down food prices by restricting or redirecting feedstocks used to produce fuel, may cause fuel prices to rise. Similarly, attempting to hold down or lower fuel prices by increasing conventional biofuels production may increase food prices.

In the absence of a supply response from conventional crude oil, looking ahead, this dynamic is expected to continue until either global economic growth slows substantially, or additional supplies of non-conventional fuel substitutes - such as gas-to-liquids, coal-to-liquids, or biomass-to-liquids -- become available at meaningful scale. The necessary lead time on the latter option is at least 3-5 years.

"The Big Squeeze: New Fundamentals for Food and Fuel Markets",  A Special Bio-era Report, June 2008, By Stephen C. Aldrich, James Newcomb, Dr. Robert Carlson

More Pieces in the Distributed Biofuel Production Puzzle

Here are some additional musings on distributed production of biofuels and economies of scale:

Following on last month's launch of the efuel100 Microfueler, which seems to be a step toward distributed biofuel production, comes word of a couple of high school students who built a "Personal Automated Ethanol Fermenter and Distiller" (via Wired) for the 2008 Intel International Science and Engineering Fair.

In the video, Eric Hodenfield and Devin Bezdicek don't give a great deal of detail about their project, but I think it is fascinating that a couple of high school students decided to build a widget intended to facilitate personal fuel production.  Kudos to those two.  The device, like the Microfueler, is supposed to produce ethanol on a small scale, but both would be useful to produce Butanol instead if the appropriate microbe were handy, as I have written about before.

But why stop there?  What about home production of petroleum?  The TimesOnline this week has a short story about LS9, featuring Greg Pal, who suggests the company has a microbe with the capability to produce petroleum at $50 per barrel using Brazilian sugar as a feedstock.  (See my earlier post LS9 - "The Renewable Petroleum Company" - in the News.)  That number is interesting, because when I met Mr. Pal last fall at a retreat organized by Bio-era, he was more reticent about proposing a target price.  It would seem that the company is making decent progress, with Mr. Pal suggesting to the Times that LS9 hopes to be producing fuel on a commercial scale by 2011.

The Times article goes on to list some rather large sounding figures for the land that might be required to supply the US fuel weekly demand of ~140 million barrels using microbes; "205 square miles, an area roughly the size of Chicago".  Skipping the issue of whether there is enough sugar produced around the world to use as feedstock, the choice of paving Chicago over to crank out a weekly supply of renewable petroleum is a little odd.  Simplifying the calculation makes the whole problem seem quite reasonable.

First, consider that US daily oil consumption is something like 20 million barrels, according to the DOE.  So, if in practice biofuel production is no more efficient than LS9 projects, we will only require a little over 29 square miles of infrastructure or a plot about 5.4 miles on a side.

Spreading that out over all 50 states (ignoring the fact that population is not evenly distributed), we would need only ~.6 square miles per state.  Every city of decent size in this country has industrial parks bigger than that.  No problem there.

Taking the this approximation to the extreme -- say, to the "personal fermenter and distiller" high school science project -- dividing the 29 square milles by the 2008 US population of about 300,000,000 gives a silly figure of 10^-7 square miles per person; that's about a foot and a half on a side.  Switching to more rational units, it is ~40 cm on a side.  A family of four (on average) would therefore require roughly a square meter to produce a daily supply of fuel at present consumption levels.  Coincidentally, photos of the efuel100 Microfueler suggest it has a footprint of about a meter square.

Of course, only about two-thirds of total oil consumption goes to transportation, with much of that used by commercial operations, so that family of four would be overproducing even at a meter square (in the present ridiculous units of [production/day/person/area]).  Realistically, larger facilities would probably be employed to produce fuel or "renewable petroleum" for industrial purpposes.

How much the capital costs would be for the square meter of production capacity is up in the air.  The Microfueler lists at ~$10K.  I'll bet the high school students can beat that.

efuel100 Web Site Goes Live -- Buy Yours NOW!

I just received a tip that the web site is now up for the small-scale fermentation and distillation machine I mentioned last week (see "A Step Toward Distributed Biofuel Production?").  The efuel100 Microfueler supposedly takes a mixture of sugar, yeast, and nutrients and returns pure ethanol in a few days.  According to the site, you can also distill waste alcoholic beverages -- this ought to catch the attention of the guys at Gizmodo.

If anybody reading this plunks down the ~$10K for a Microfueler, followed by paying for all the razorblades proprietary feedstock, let me know how it works out.  I am definitely curious to see if the electricity costs to run the fermenter/distiller are as low as claimed.

A Step Toward Distributed Biofuel Production?

Sunday's New York Times caries an article by Michael Fitzgerald, "Home Brew for the Car, Not the Beer Cup", that describes a potential step toward garage production of biofuels, specifically ethanol.

(Update: I wrote to Mr. Fitzgerald in the hopes of getting more information, and he responded with this:

The company currently has only this placeholder site with a form on it:  www.efuel100.com.

It intends to announce its product May 8th, at which time it says it will have more information available.

So we will just have to wait to find out more.)

I have speculated for the last year or so about the feasibility and utility of distributed microbial production of biofuels.  Petroleum refineries and shipping infrastructure are big for a reason; due to both physics and economics it only makes sense to build big, expensive projects.  In contrast, once you have a bug that turns sugar or cellulose into fuel, the production process could in principle look a lot more like brewing beer.

Companies like Amyris are working on building bugs that can churn out a variety of fuels, and they are aiming for production capacity on a scale that is smaller than Big Oil.  Thus far, however, most of these companies seem to be aiming for hundreds of millions of liters rather than a few liters of production capacity (see my previous post "Amyris Launches Cane-to-Biofuels Partnership").  New technology may lead to rethinking this approach.

To give some context, here is a short excerpt from my recent article in Systems and Synthetic Biology, "Laying the foundations for a bio-economy" (see the original for references):

The economic considerations of scaling up direct microbial production of biofuels are fundamentally and radically different than those of traditional petroleum production and refining. The costs associated with finding a new oil field and bringing it into full production are considerable, but are so variable, depending on location, quality, and local government stability, that they are a poor metric of the average required investment. A very straightforward measure of the cost of increasing supplies of gasoline and diesel is the fractional cost of adding refining capacity, presently somewhere between US$ 1 and 10 billion for a new petro-cracking plant, plus the five or so years it takes for construction and tuning the facility for maximum throughput. Even increasing the capacity of working facility is expensive. Shell recently announced a US$ 7 billion investment to roughly double the capacity of a single, existing refinery.          

In contrast, the incremental cost of doubling direct microbial production of a biofuel is more akin to that incurred in setting up a brewery, or at worst case a pharmaceutical grade cell culture facility. This puts the cost between US$ 10,000 and 100,000,000, depending on size and ultimate complexity. Facilities designed to produce ethanol by traditional fermentation and distillation can cost as much as US$ 400 million.

Pinning down the exact future cost of a microbial biofuel production facility is presently an exercise in educated speculation. But, for both physical and economic reasons, costs are more likely to be on the low end of the range suggested above.

This is particularly true for a fuel like butanol. While distilling or filtering alcohol from the fermented mix would reduce the palatability of beer, it is absolutely required to produce fuel grade ethanol. However, unlike ethanol, butanol has only a limited miscibility in water and therefore does not require as much energy to separate. If an organism can be built to withstand the ∼8% concentration at which butanol begins to phase-separate, the fuel could simply be pumped or skimmed off the top of the tank in a continuous process. Costs will fall even further as production eventually moves from alcohols to hydrocarbon biofuels that are completely immiscible in water. Moreover, beer brewing presently occurs at scales from garages bottling of a few liters at a time to commercial operations running fermenters processing thousands to many millions of liters per year. Thus, once in possession of the relevant strain of microbe, increasing production of a biofuel may well be feasible at many scales, thereby potentially matched closely to changes in demand. Because of this flexibility, there is no obvious lower bound on the scale at which bio-production is economically and technically viable.

The scalability of microbial production of biofuels depends in part on which materials are used as feedstocks, where those materials come from, and how they are delivered to the site of production. Petroleum products are a primary feedstock of today's economy, both as a raw material for fabrication and for the energy they contain. Bio-production could provide fuel and materials from a very broad range of feedstocks. There is no obvious fundamental barrier to connecting the metabolic pathways that Amyris and other companies have built to produce fuels to the metabolic pathways constructed to digest cellulose for ethanol production, or to the pathways from organisms that digest sewage. Eventually, these biological components will inevitably be enhanced by the addition of photosynthetic pathways. Conversion of municipal waste to liquid biofuels would provide a valuable and important commodity in areas of dense human population, exactly where it is needed most. Thus microbial production of biofuels could very well be the first recognizable implementation of distributed biological manufacturing.    

The NYT reports that a company called E-Fuel has developed a refrigerator-sized box that turns yeast and sugar into ethanol.  This home fermentation and distillation unit is described as having a variety of technological improvements, such as semi-permeable membrane filters, that reduce the cost of separating ethanol from water.  The price point for the E-Fuel 100 Microfueler is suggested to be $9995, though few other details are given.

Regular readers will recall that I am not particularly enthusiastic about ethanol, but -- assuming it is real -- the Mircrofueler might be an interesting step forward because it ought to work for higher chain alcohols such as butanol.  The physics is fairly straightforward: there is an increase in enthalpy from mixing alcohol and water, which is in principle the only energy you have to add back to the system to separate them.  In practice, however, the only way to achieve this separation is to heat up the mixture, which requires considerably more energy because water has such a large specific heat.  Any technology that helps reduce the energy cost of separating alcohol from water could substantially lower production costs.

E-Fuel might therefore have a way to help Amyris, or LS9, or even BP lower the costs of separating fuels from aqueous production mixtures, and to do so with a box that could sit in consumers' garages.  This raises all sorts of questions about where the bug comes from, whether for the purposes of cost those bugs are consumables, and where the revenue stream comes from in the long term.  I suspect the answer, long term, is that the feedstock and the hardware are the only way to make money.

For example, let's say the University of Alberta 2007 iGEM team (the "Butanerds"), who continue to work on their project, are successful in building a bug that can crank out butanol from sugar.  That bug will be full of Biobrick parts, which at present sit in the public domain.  Acquiring a working circuit made of Biobrick parts will always be substantially less expensive than building a proprietary circuit.  In other words, if a bunch of (talented) undergraduates manage to get their "open source" biofuel production bug working, then it isn't clear that anybody else will be able to charge for a bug that does the same thing -- unless, of course, a proprietary bug is much more efficient or has other advantages.  But how long would the relevant genetic circuits even stay proprietary?  DNA sequencing is cheap, and DNA synthesis is cheap, so reproducing those circuits is going to be easy.  Nobody is going to get anywhere with "biosecurity through obscurity".

Either way, you then still need some sort of box that houses the bugs during fermentation or synthesis of fuels, and also serves to separate the fuel from the soup in which the bugs grow; enter the Microfueler.

So on the one hand we have a new piece of hardware that supposedly will allow the user to produce fuel at home from sugar (or, perhaps, starch, cellulose, and waste), and on the other hand we are starting to see efforts to build organisms that produce a variety of fuels that might be processed by that hardware.

Here is what I really want to know: How long will it be before we see a partnership between E-Fuel and a company (or an iGEM team) to put butanol (or other fuel molecule) "biorefinery" in your garage?  It could even be a company other than E-Fuel, because they are unlikely to have a corner on the technology necessary to build the relevant hardware.  Or perhaps there will even be an open-source "microbiofueler/biomicrofueler" emerging from a garage or university project?

Distributed biological manufacturing, here we come.

Amyris Launches Cane-to-Biofuels Partnership

I just received word that Amyris has now officially announced a partnership to use Brazilian sugar cane to produce biofuels.  Amyris and Crystalsev are aiming to hit the market with cane-derived biodiesel in 2010.  This deal has been in the works for a while; the press release is here.

Amyris now has access to large amounts of sugar, as well as substantial fermentation capacity, and they need to get their bugs up to snuff for producing large volumes of fuel.  Based on what I have seen in my travels, I expect they will get there.  In principle, the market will be the ultimate judge of the accomplishment, with consumers in the role of jury.  But the market, at present, is also skewed by subsidies and tariffs that place Brazilian products at a disadvantage compared to less efficient domestic production.  It is yet unclear whether the new biofuel will be subject to the same uneven playing field facing Brazilian ethanol.

(Update:  Since this post seems to be getting lots of traffic, I will point those interested to a couple of my earlier posts on the role of Amyris and synthetic biology in producing biofuels: "The Intersection of Biofuels and Synthetic Biology", and "The Need for Fuels Produced Using Synthetic Biology".)

"Laying the foundations for a bio-economy"

My new commentary, "Laying the foundations for a bio-economy", will be appearing in a upcoming issue of Systems and Synthetic Biology.  The piece is freely available online as both text and PDF.  Thanks to Springer for supporting the Open Access option.  Here are the abstract, the first two paragraphs, and the last two paragraphs:

Abstract  Biologicaltechnologies are becoming an important part of the economy. Biotechnology already contributes at least 1% of US GDP, with revenues growing as much as 20% annually. The introduction of composable biological parts will enable an engineering discipline similar to the ones that resulted in modern aviation and information technology. As the sophistication of biological engineering increases, it will provide new goods and services at lower costs and higher efficiencies. Broad access to foundational engineering technologies is seen by some as a threat to physical and economic security. However, regulation of access will serve to suppress the innovation required to produce new vaccines and other countermeasures as well as limiting general economic growth.          

---

Welcome to the Paleobiotic Age. Just as today we look back somewhat wistfully on our quaint Paleolithic--literally "old stone"--ancestors, so will our descendants see the present age as that of "old biology", inhabited by Paleobiotic Man. The technologies we use to manipulate biological systems are experiencing dramatic improvement, and as a result are driving change throughout human economies.       

In order to understand the impact of our growing economic dependence on biological technologies it is worth taking a moment to consider the meaning of economy. "Economy" is variously thought of as, "the management of the resources of a country, especially with a view to its productivity" and "the disposition or regulation of the parts or functions of any organic whole; an organized system or method"  Amid a constantly increasing demand for resources, we look to technology to improve the productivity of labor, to improve the efficiency of industrial process and energy production, and to improve the yield of agriculture. Very tritely, we look to technological innovation within our economy to provide more stuff at lower cost. Biological technologies are increasingly playing that role.

...

In this, the Paleobiotic Age, our society is only just beginning to struggle with all the social and technical questions that arise from a fundamental transformation of the economy. History holds many lessons for those of us involved in creating new tools and new organisms and in trying to safely integrate these new technologies into an already complex socio-economic system. Alas, history also fails to provide examples of any technological system as powerful as rational engineering of biology. We have precious little guidance concerning how our socio-economic system might be changed in the Neobiotic Age to come. We can only attempt to minimize our mistakes and rapidly correct those we and others do make.

The coming bio-economy will be based on fundamentally less expensive and more distributed technologies than those that shaped the course of the 20th Century. Our choices about how to structure the system around biological technologies will determine the pace and effectiveness of innovation. As with the rest of the natural and human built world, the development of this system is decidedly in human hands. To paraphrase Stewart Brand: We are as engineers, and we'd better get good at it in a hurry.          

The Intersection of Biofuels and Synthetic Biology

New players are appearing every day in the rush to production biofuels using synthetic biology.  I just noticed an announcement that Codon Devices has signed an agreement with Agrivida for:

The discovery, development, and commercialization of engineeredproteins for use in so-called 'third generation' biofuel applications. Under the terms of this agreement, Codon Devices will deliver to Agrivida optimized enzymes to be embedded in crops for biofuels production.

...Agrivida, an agricultural biotechnology company, is developing such third generation biofuels by creating corn varieties optimized for producing ethanol. First generation methods for manufacturing ethanol make use of the corn grain only, leaving the remaining plant material, such as the corn leaves, stalks, and husks in the field. Central to Agrivida’s ethanol-optimized corn technology are engineered cellulase enzymes that are incorporated into the corn plants themselves. These enzymes will efficiently degrage the entire mass of plant material into small sugars that can then be readily converted to ethanol.

The step of putting some of the biofuel processing into crops was inevitable, but I can't say I am particularly thrilled about it.  I am not opposed to the principle of open planting of GM crops, but, because many GM plants do not behave as predicted once placed in a complex ecosystem (i.e., nature), I wonder if  we shouldn't be more circumspect about this particular engineering advance.

In other interesting developments at Codon, they also recently announced a deal with Open Biosystems wherein the latter will:

Sell and distribute Codon Devices’ gene synthesis offering to researchers with needs that fall below Codon’s minimum order threshold.  The partnership will enable a wide range of new customers to utilize high-quality, low-cost gene synthesis in their research, and will greatly strengthen Codon Devices’ presence within academic, government and other non-profit institutions.

I also notice Codon is now advertising gene synthesis for $.69 per base for constructs between 50 and 2000 bases in length, with "typical delivery" in 10-15 days.  2001-5000 bases will cost you $.84 per base and 15-20 days.  Last year at SB 2.0, Brian Baynes suggested they would be at about $.50 per base within a year, so costs continue to fall pretty much apace.  But delivery times are staying above two weeks, and this is now becoming a problem for some of Codon's customers.  I am not at liberty to divulge names, but some synthetic biology companies that rely on outside gene synthesis are starting to chafe at having to wait two weeks before trying out new designs.  This is something we predicted would happen in the "Genome Synthesis and Design Futures" report from Bio-era, though I am a bit surprised it is happening so soon.  This may be another indication of how quickly SB is becoming an important technology in the economy.  Engineers trying to turn around products aren't satisfied with the NIH/academic model of trading off time for money -- the market, to first order, only cares about products that are actually for sale, which means those that make it through R&D quickly and generate revenues in what will become an increasingly crowded field.

Concerns about delays in the R&D cycle due to outsourced gene delivery are also becoming confounded by IP issues.  Personally, I am certainly not thrilled about sending my protein designs around via email, and I know of another SB company (which again I am not at liberty to name) that is becoming less and less comfortable with sending sequences for new genetic circuits out the door in electronic form.  This can only be exacerbated by the deal Codon Devices has just signed with Agrivida, an explicit competitor to anybody trying to produce anything in hacked/engineered organisms.  A couple of months ago, I had a conversation with Brian Baynes (which I will post here sometime soon) in which he outlined Codon's plans for participating in markets beyond gene synthesis.  I suspect Codon Devices will have to start paying more and more attention to conflict of interest issues generated by its simultaneous role as a fabrication house and provider of design services.

I'll argue again that the two trends of IP concerns and R&D time scales will drive the emergence of a market in desktop gene synthesis machines, whether you call them "desktop gene printers" or  something else.  This weekend at SciFoo, Drew Endy suggested such instruments are a long ways off.  Drew has been paying more attention to the specific engineering details of this than I have, if for no other reason that his involvement in Codon, but, in addition to my own work, I think that there are enough technological bits and pieces already demonstrated in the literature that we could see a desktop instrument sooner rather than later; that is, if a market truly exists. 

The Need for Fuels Produced Using Synthetic Biology

Among the most promising short term applications of Synthetic Biology is biological production of liquid fuels.  But beyond the technical and economic attraction of the project, the reasons we require progress in this area are manifest; diversification of fuel sources thereby reducing dependency on imports, improving air quality, reducing greenhouse gas and particulate emissions that contribute to climate change, eliminating the present coupling between biofuels and food crops, and carbon sequestration.

Bio-era is in the middle of scheduled briefings in Asia, the U.S., and Europe describing the present state of biofuels markets and associated technologies, and these trips, along with recent headlines concerning commodities prices and future fuel demands, have helped clarify the story in my mind.  Below I outline some of the factors in play:

Carbon and other Greenhouse Gas Emissions: The amount of water coming off Antarctica and Greenland scares the crap out of me.  It's true that this isn't my professional specialty, but I have been following the literature on polar ice mass and movement for a decade.  The news is just getting worse.

The present coupling between biofuels and food crops creates upward pressure on food price inflation and reduces (or eliminates) the economic incentive to produce biofuels: Ethanol demand has pushed up the price of corn, and in the U.S. politically motivated trade barriers to Brazilian ethanol derived from sugar cane threaten to keep corn prices high.  Palm oil is presently trading at historic highs, and at a ~30-40% premium to finished diesel, but this is actually driven by food demand, primarily from India and China.  I am a simple physicist by training, rather than a sophisticated economist, but given the increase in food demand I don't see the price coming down even with increased supply.  This puts anybody planning to refine palm oil into biodiesel completely underwater for the foreseeable future. 

China (and India) will require increasing resources over the coming decades: More on this in posts to come.  The numbers are mind boggling.

Ethanol is by no means an advanced biofuel; from both a technical and an economic perspective ethanol is a backwards biofuel: The future is all about producing biofuels that are high energy content (not ethanol), are not water soluble (not ethanol), can be easily integrated into the existing gasoline and diesel distribution infrastructure (not ethanol), and require minimal, if any, initial changes in engine technology (not ethanol).  The average age of an automobile in the U.S. is now at least 10 years (depending on who is counting, and how), which means engine technology turns over very slowly here.  It is faster in other countries (2-3 years in Japan, if memory serves), but this dramatically influences the speed with which new fuels can enter the market.

You don't want to be long on petroleum in ten years:

First, despite a greater than 10% annual growth in auto sales in China, petroleum demand has evidently plateaued due to increased biofuel blending.  I'm not sure I completely believe this yet, but it is an interesting assertion.

Second, three companies are already out in front with funding to use both traditional metabolic engineering and synthetic biology to produce microbes that churn out biofuels:

LS9 is "Developing Renewable Petroleum biofuels: new, clean, and sustainable fuels that fulfill our long and short term energy needs. Derived from diverse agricultural feedstocks, these high energy liquid fuels are renewable and compatible with current distribution and consumer infrastructure."

Synthetic Genomics, Craig Venter's shop, just announced a partnership with BP aimed at using organisms and genes found in subsurface hydrocarbon deposits to develop "cleaner energy production and improved recovery rates".

Amyris Biotechnologies recently received $20 million to develop direct microbial production of liquid biofuels.  Amyris, in particular, is well positioned to make some serious headway.  The company website suggests they are well on their way to making both butanol and biodiesel  (or more likely a precursor to diesel?) in microbes.  In an article in Technology Review, the new CEO, John Melo, says the company has already developed a metabolic pathway to produce a fuel equivalent to Jet-A.  This is particularly interesting given the recent announcement by the U.S. Air Force that it will replace at least 50% of its petroleum use with synthetic fuels by 2010.  In an article by Don Phillips, The New York Times is reporting that, "The United States Air Force has decided to push development of a new type of fuel to power its bombers and fighters, mixing conventional jet fuel with fuels from nonpetroleum sources that could eventually limit military dependence on imported oil."  At the moment, the immediate plan appears to utilize a synthetic fuel produced using natural gas, but anybody who can crack the aviation biofuel nut has immediate access to a 3.2 billion gallon per year market in the Air Force alone.

So how long is this all going to take?  Amyris CEO Melo mentions they hope, "To make a Jet-A equivalent with better properties on energy and freezing point with a $40 barrel cost equivalent by 2010 or 2011".  That's faster than I was expecting, but I find the time scale highly credible.  Below is a figure with data drawn from Jay Keasling's recent presentation to the UC Berkeley faculty senate on BP's investment in the Energy  Biosciences Institute.

The data represents a roughly billion-fold improvement in yield over 6 years.  (I've called this "pre-synthetic biology improvements" because the data is the result of applying fairly traditional metabolic engineering techniques, rather than the combination of Biobricks.  This is by no means a critique of Jay Keasling or his teams at UC Berkeley or Amyris, but rather a simple contrast of methodology.)

You would be hard pressed to find examples of that magnitude of improvement in any human industrial process over any 6 year period, but that is exactly what is possible when you turn to biology.  Moreover, the complexity of the isoprenoid pathway is probably about the same as you would expect for producing biobutanol or a Jet-A equivalent.  This is why John Melo is bullish about making progress on biofuels.  Given that Amyris is evidently already on the path towards butanol, diesel, and aviation fuel, five years is by no means an overly optimistic estimate of reaching commercial viability.  Note that this doesn't mean Amyris takes over the liquid fuels market overnight.  It can take decades for new technologies to make progress against existing infrastructure and investment.

But assuming Amyris, or any other company, is successful in these projects, it is worth considering first the resulting impact on the liquid fuels market, then more generally the effects on structure of the economy as a whole.

The economic considerations of scaling up direct microbial producing of biofuels are fundamentally and radically different than those of traditional petroleum production and refining.  The costs associated with finding a new oil field and bringing it into full production are considerable, but are also so variable, depending on location, quality, and local government stability, that they are a poor metric.  But a very clean measure of increasing gasoline and diesel supplies is the fractional cost of adding refining capacity, presently somewhere between US$ 1 and 10 billion dollars for a new petro-cracking plant, plus the five or so years it takes for construction and tuning the facility for maximum throughput.

In contrast, the incremental cost of doubling direct microbial production of a biofuel is more akin to setting up a brewery, or at worst case a pharmaceutical grade cell culture facility, which puts the cost between about US$ 10,000 and 100,000,000.  Pinning down the cost of a biofuel production facility is presently an exercise in educated speculation, but it is more likely to be on the low end of the scale suggested above, particularly for a fuel like butanol, which, unlike, ethanol, is not soluble in water and therefore does not require distillation; it can simply be pumped or skimmed off the top of the tank in a continuous process.  Beer brewing presently occurs at scales from garage operations bottling a few liters at a time to commercial operations running fermenters processing thousands to many millions of liters per year.  Thus, once in possession of the relevant strain of microbe, increasing production of a biofuel may well be feasible at the local level, thereby matched to fluctuations in demand.  Microbial biofuels could therefore be an excellent initial demonstration of distributed biological production (PDF warning).

In the end, the scalability of microbial production of biofuels depends in part on what materials are used as feedstocks, where those feedstocks come from, and how they are delivered to the site of production.  Whereas petroleum products are a primary feedstock of today’s economy, both as a raw material for fabrication and for the energy they deliver, it may eventually be possible to treat biomass or waste material as feedstocks for microbes producing more than just fuels.  But as I observed above, any biological production process  for biofuels that relies on a sugar or starch crop also used in food production will be subject to the same skewed market dynamics now playing out between food and conventional biofuels.

There are clear challenges to overcome in the years ahead, but given the progress already demonstrated I am comfortable we will find solutions with continued effort.