Tom Bergin and Anna Driver, Reuters 14 Jul 09;
LONDON/HOUSTON (Reuters) - Exxon Mobil Corp will invest $600 million over the next five to six years on trying to developing biofuel from algae, even though the oil major has said renewables will be only a small part of global energy supply.
Exxon, placing its largest financial bet on renewable fuels, is forming a research and development alliance with Synthetic Genomics Inc, a privately held company that focuses on gene-based research, the company said on Tuesday.
The project, which would cost billions to fully develop, is in its initial stages, so commercially viable biofuel made from algae would be many years away, Exxon told reporters on a conference call.
"We need to be realistic," said Emil Jacobs, vice president of research at Exxon. "This is not going to be easy, and there are no guarantees of success."
Spending on the algae fuels project will require only a fraction of Exxon's annual capital budget of $25 billion to $30 billion, but it will be the world's largest biofuels development project of its kind, said Craig Venter, genome pioneer and founder of Synthetic Genomics.
Exxon's algae research will not likely silence critics who have argued that the oil major needs to sharpen its focus on renewable and cleaner-burning fuels, but it is a step in the right direction, said Fred Burke, president of Johnston Lemon Asset Management.
"I think it's terrific," Burke said. "It indicates to me that they are reaching out and trying some alternative ideas when frankly I didn't have the idea that they were doing that before."
Even though renewable energy sources are forecast to show rapid growth, crude oil, gas and coal will meet nearly 80 percent of global energy needs through 2030, Exxon said in its latest energy outlook.
BUILDING IN CALIFORNIA
As one of its first steps, the Exxon and Synthetic Genomics plan to build a research facility in San Diego, the companies said.
Other companies, including Europe's largest oil company by market value, Royal Dutch Shell Plc, are also researching the possibility of generating motor fuel from algae, but all parties agree a commercial solution is years off.
Exxon said it reviewed the viability of all other types of biofuels and determined the algae project was best after considering factors including environmental performance and economies, Jacobs told reporters.
Biofuel from algae would have a key advantage over existing biofuels in that it would not compete with food crops for land, thereby meeting energy needs without pushing up food costs.
To make biofuel from algae, sunlight and a large source of carbon dioxide would be needed. Exxon said it could source its carbon dioxide for the research product from power plants, natural production or refineries.
In the past, Exxon has been skeptical about green energy such as wind, biofuels and solar power and has supported research that questioned the scientific basis of man-made climate change.
The company also fended off proposals that it invest in renewable fuels at an investors' meeting in May.
Shares of Exxon rose 25 cents, or less than one percent, to $65.95 in afternoon trading on the New York Stock Exchange.
(Additional reporting by Ajay Kamalakaran in Bangalore; Editing by Gerald E. McCormick and Steve Orlofsky)
ExxonMobil invests in algae biofuel project
Yahoo News 14 Jul 09;
WASHINGTON (AFP) – Oil giant ExxonMobil announced an alliance Tuesday with biotech firm Synthetic Genomics to make a new biofuel from photosynthetic algae.
The biggest US energy firm said it was partnering with the firm headed by Craig Venter, a researcher who founded Human Genome Sciences and Celera Genomics and has worked on projects to sequence the genomes of humans, fruit flies and other organisms.
ExxonMobil said it expects to spend more than 600 million dollars if certain milestones are reached to produce the fuel, which does not contribute to greenhouse emissions.
"This investment comes after several years of planning and study and is an important addition to ExxonMobil's ongoing efforts to advance breakthrough technologies to help meet the world's energy challenges," said Emil Jacobs, vice president at ExxonMobil Research and Engineering.
"While significant work and years of research and development still must be completed, if successful, algae-based fuels could help meet the world's growing demand for transportation fuel while reducing greenhouse gas emissions," said Michael Dolan, senior vice president of ExxonMobil.
"Our new algae biofuels program complements ExxonMobil's ongoing efforts to reduce emissions in our operations and by consumers of our products, through both efficiency improvements and technology breakthroughs."
Last month, Dow Chemical announced plans to join Algenol Biofuels in a pilot-scale project to use algae and carbon dioxide to produce ethanol fuel.
Gene scientist to create algae biofuel with Exxon Mobil
• New biofuel requires no car or plane engine modification
• Carbon Trust says production will take 'many years'
Alok Jha, guardian.co.uk 14 Jul 09;
Gene scientist Craig Venter has announced plans to develop next-generation biofuels from algae in a $600m (£370m) partnership with oil giant Exxon Mobil.
His company, Synthetic Genomics Incorporated (SGI), will develop fuels that can be used by cars or aeroplanes without the need for any modification of their engines. Exxon Mobil will provide $600m over five years with half going to SGI.
"Meeting the world's growing energy demands will require a multitude of technologies and energy sources," said Emil Jacobs, vice president of research and development at ExxonMobil. "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."
Transport accounts for one-quarter of the UK's carbon emissions and is the fastest growing sector. Finding carbon-neutral fuels will be crucial to the government meeting its target to reduce overall emissions by 80% by 2050.
Algae are an attractive way to harvest solar energy because they reproduce themselves, they can live in areas not useful for producing food and they do not need clean or even fresh water. In addition, they use far less space to grow than traditional biofuel crops such as corn or palm oil.
"Algae consumes carbon dioxide and sunlight in the presence of water, to make a kind of oil that has similar molecular structures to petroleum products we produce today," said Jacobs. "That means it could be possible to convert it into gasoline and diesel in existing refineries, transport it through existing pipelines, and sell it to consumers from existing service stations."
The Carbon Trust, a government-backed agency that promotes low-carbon technologies, has forecast that algae-based biofuels could replace more than 70bn litres of fossil fuels used every year around the world in road transport and aviation by 2030, equivalent to 12% of annual global jet fuel consumption or 6% of road transport diesel. In carbon terms, this equates to an annual saving of more than 160m tonnes of CO2 globally with a market value of more than £15bn.
Ben Graziano, research and development manager at the Carbon Trust, said that alge-based biofuels offered the potential for "major carbon savings". "Exxon Mobil is estimating that algae could yield just over 20,000
litres of fuel per hectare each year, which is in line with our own forecasts. However, producing biofuel from algae on such a massive commercial scale is a major challenge, which will require many years of research and development."
Venter, who is best known for his role in sequencing the human genome, said the new partnership was the largest single investment in trying to produce biofuels from algae but said the challenge to creating a viable next-generation fuel was the ability to produce it in large volumes. "This would not happen without the oil industry stepping up and taking part," he said. "The challenges are not minor for any of us but we have the combined teams and scientific and engineering talents to give this the best chance of success."
The research programme will begin with the construction of a new test facility in San Diego, where Venter says different techniques to grow and optimise algae will be tested. These will include open ponds as well as bioreactors, where the algae are grown in sealed tubes. "We will be trying out these different approaches … using newly-discovered natural algae to test the best approaches we can come up with to go into a scale-up mode."
Venter has spent several years trawling the world's oceans in search of environmentally-friendly microbes that could be used, in one way or another, to bring down the world's carbon emissions. The organisms he has found include those that can turn CO2 into methane, which could be used to make fuels from the exhaust gases of power stations, and another that turns coal into natural gas, speeding up a natural process and reducing both the energy needed to extract the fossil fuel and the amount of pollution caused when it is burned.
Oil giant Exxon sees the future – and it is green algae
Stephen Foley, The Independent 15 Jul 09;
The oil giant that environmentalists love to hate, ExxonMobil, which for years denied the existence of man-made climate change, is sensationally "going green" in a very literal sense – investing $600m (£369m) in algae.
The company says it believes it can make a new kind of fuel for cars and aircraft, one that can be produced in its existing refineries and will not require modification of vehicles' engines.
At the heart of the project is Craig Venter, the scientist best known for his private-sector effort to sequence the human genome, and his latest company, Synthetic Genomics.
Exxon is putting $300m into its own research and at least as much again into Synthetic Genomic's efforts to build a lab and, ultimately, large-scale production facilities. Both sides were enthusiastic but cautious announcing the partnership yesterday. "We need to be realistic," said Emil Jacobs, vice-president of research at Exxon. "This is not going to be easy, and there are no guarantees of success."
Spending on the algae fuels project will require only a fraction of Exxon's annual capital budgets of $25bn to $30bn, but it will be the world's largest biofuels development project of its kind, Mr Venter said.
Environmentalists are keen on algae as a fuel source because, unlike many ethanol products, it is not taking up land, water and crops that might otherwise be given over to the production of food.
ExxonMobil has come under pressure from shareholders – including descendants of its founder, John D Rockefeller – to diversify from fossil fuels, though management insists oil and gas will continue to be the dominant sources of fuel for decades to come.
BP already has a partnership with Synthetic Genomics. Royal Dutch Shell, which is second to ExxonMobil in global refining capacity, announced plans in December for an algae project in Hawaii.
