A few weeks ago, Exxon announced a $600 million dollar research collaboration investment with Synthetic Genomics, a leader in genetic engineering founded by J. Craig Venter, Ph.D., who, along with rival scientist Francis Collins of the National Institute of Health, first decoded the human genome.
The partnership is aimed at developing strains of algae, which can produce oil at high volumes and low cost so that they can be suitable for use as a feedstock for biofuels.
The funding announcement is notable for two reasons: it marks Exxon’s first major move into biofuels, and it is the strongest signal yet of algal oil’s promise as a petroleum replacement. At the same time, according to the Wall Street Journal’s Environmental Capital blog, the EPA announced its intent to “measure the greenhouse gas impacts of algae-based biofuels in its final rule to implement the renewable fuels standard.”
The EPA action is notable in that, previously, the EPA’s much discussed revised Renewable Fuels Standard (RFSII) would have lumped algae based biodiesel in the same category of fuels as biodiesel from edible oil’s like soybean oil and ethanol from corn. Given that the stated mandate of RFS II is to create a market for advanced biofuels beyond corn ethanol and soy biodiesel, having algal fuels in the same category would have put them at a significant disadvantage.
As Sen. Jeff Bingaman, who chairs the Energy and Natural Resources Committee, pointed out in a July 13 piece for Politico “some exciting new technologies and feedstocks that could ultimately be better solutions for land use, climate change and our transportation sector are not included in any of the carve-out mandates. Algae-based fuels are the most obvious example, which, despite having characteristics superior to any renewable fuels in commercial production today, have no home in the RFS.”
Many words have already been penned (actually, I suppose they’ve been typed) about the history of the interest in algae as a potential biofuels feedstock, which began most significantly with the US Department of Energy’s Aquatic Species Program, which was launched as a response to the high oil prices caused oil embargo of the 1970’s. A link to the study is here.
At Elevance, we have been interested in algae oil for a while now because of algae’s twin abilities to (a) grow at prolific rates (b) in areas like deserts and oceans, which are unsuitable for agriculture or industry. (As an aside, algal oil is also highly prized for its “nutriceutical” uses, although these are applications for which there is a limited market. I mention it mostly because I really like the word “nutriceutical”).
And though Elevance is interested in algae, conversely, we think that “algae” should be interested in us. As I mentioned in this post, our process can make high value specialty chemicals like functional oils, antimicrobials, high performance waxes, lubricants, additives and others, along with making advanced biofuels (sometimes called second generation biofuels because they are drop in replacements for petroleum derived diesel and jet fuel). The combination of specialty chemicals and advanced fuels makes our process more profitable than fuels-only processes like transesterification (which is used to make biodiesel from natural oils).
Moreover, should the EPS implementation of RFSII insufficiently reward algal fuels as an advanced feedstock, Elevance’s ability to make qualifying advanced fuels from algae, like hydrocarbon diesel and jet fuel (rather than just biodiesel or ethanol) will make Elevance an attractive partner. As algae companies work to “domesticate” different strains of algae, they will seek applications and partners which help them get to scale while making profitable products, and Elevance, with its Noble Prize winning technology, its strong competence in working with different natural oils, and its unique biorefining process, fits the bill.
By Omar Abou-Sayed
Last week, Newsweek published an interesting article in which psychologist Daniel Goleman, author of Ecological Intelligence: How Knowing the Hidden Impacts of What We Buy Can Change Everything, gave his opinion of Wal-Mart’s new initiative to rate the environmental impact of the items they sell. Wal-Mart announced that it intends to provide this information right on the tag, next to the price.
This concept brings many things to mind as Elevance continues to provide more companies with green chemical ingredients for everyday consumer products such as candles, haircare, and skincare products. While seen by many as a radical move on Wal-Mart’s part, this idea adds a new layer to the competition for consumers’ buying power. In addition to price and quality, there may now be a gauge of “environmental impact.”
Wal-Mart’s announcement is another indication that the trend toward incorporating a product’s sustainability into the equation continues to increase in importance, and as Goleman points out, may someday become a “standard.” But, performance, cost and value are the “standards” that consumers already demand. They must remain top of mind.
For us at Elevance, one of our primary initiatives is to give the marketplace more options when it comes to green products. But, we still believe that performance and economics weigh most heavily in consumers’ choices. You cannot have a successful, sustainable product if it isn’t affordable or doesn’t perform well. All three elements go hand-in-hand. I applaud Wal-Mart’s leadership in helping to make the topic of environmental footprint and sustainability consistent and more meaningful for the consumer.
As this story unfolds, we look forward to seeing how mainstream companies will continue to build these green concepts into their overall business plans, and what sort of opportunities and partnerships it will bring to Elevance. We believe performance,, cost and sustainability are mutually compatible and look forward to working with others to make it happen for all of us.
By Andy Shafer, Executive VP Sales and Market Development