ExxonMobil invests $600m into fuel-from-algae

www.bioenergy-business.com
15 July, 2009

Oil and gas giant Exxon-Mobil is to spend up to $600m over five to six years on research and development of biofuels made from algae and potentially more than $1bn over the next 10–15 years. The investment is the first major commitment to renewable fuels by Exxon-Mobil, which has angered environmental activists with its refusal until now to follow rivals Shell and BP in exploring energy from wind, solar and biofuels.

It will spend half of the initial $600m itself and the rest with the biotechnology company Synthetic Genomics Inc (SGI) "if research and development milestones are successfully met". The aim is to produce fuels, made from the oil in algae, that are compatible with today's petrol and diesel, said Exxon-Mobil.

Its move comes as the mainstream oil and gas sector has shown mixed feelings about biofuels. Valero in the US, for example, has bought biofuel production plants to meet future mandatory blending targets, while BP has pulled back from its earlier commitment to biofuels and other renewables. Exxon-Mobil's investment comes "after several years of planning and study", according to Emil Jacobs, vice-president of research and development at Exxon-Mobil Research and Engineering, which will manage the algae-to-biofuel project.

"Meeting the world's growing energy demands will require a multitude of technologies and energy sources," said Jacobs. "We believe that biofuel produced by algae could be a meaningful part of the solution in the future if our efforts result in an economically viable, low net carbon emission transportation fuel."

In the past, Exxon-Mobil has dismissed renewables as not cost-effective and has argued that pursuing the technologies too early would erode shareholder value. Its former chief executive, Lee Raymond, was also sceptical about climate change. SGI was founded by its chief executive Craig Venter, who is most famous for decoding the human genome in the 1990s.

"The real challenge to creating a viable next generation biofuel is the ability to produce it in large volumes which will require significant advances in both science and engineering," said Venter. "The alliance between SGI and Exxon-Mobil will bring together the complementary capabilities and expertise of both companies to develop innovative solutions that could lead to the large-scale production of biofuel from algae."

The programme will include the identification or development of algal strains that can yield large volumes of oil cheaply and development of algae production systems. It will also consider how to supply large amounts of the greenhouse gas carbon dioxide needed to grow algae.