Great (Algae) Expectations, and San Diego’s Plans for Creating a Big Green Cluster

4/29/09Follow @bvbigelow

Expectations were high at UC San Diego yesterday as the city’s academic, business, and political leaders gathered to announce the formation of SD-CAB, the San Diego Center for Algae Biotechnology.

Steve Kay, UCSD’s dean of biological sciences and SD-CAB’s founding director, told the audience the single point of the center was to position San Diego as “the leader in the new algae economy.” Such hyperbole aside, the underlying idea for the consortium of academic and industry researchers was basically how Kay described it in January, when I first learned about SD-CAB. Since then, organizers have added the Salk Institute and San Diego State University to the consortium, which intends to make San Diego a nationally recognized center for the kind of innovative solutions needed to make algae biofuels production commercially viable.

One difference that was evident yesterday, though, is that expectations have soared beyond making San Diego what UCSD Chancellor Marye Anne Fox calls “a big green cluster” for algae biotechnology research. Some speakers talked about making San Diego a “green Houston” of the biofuels industry. “Maybe someday, if the history of algae is ever written, this will be remembered as the day when it all started,” Jim Waring, chairman of Cleantech San Diego, told me before the press conference began.

Joining in the exuberance, Stephen Mayfield, an expert in the genetics of algae at The Scripps Research Institute, told the audience that algae-based biofuels, which includes gasoline, jet fuel, and diesel, “will be under $2 a gallon” in the next five to 10 years. Who knows if Mayfield is right? But with his enthusiasm and scientific credentials, Mayfield had people listening raptly. In addition to serving as SD-CAB’s co-founder and associate director, Mayfield also is a scientific adviser and co-founder of Sapphire Energy, the algae biofuels startup funded in part by Bill Gates’ Cascade Investment fund.

And perhaps there is cause to celebrate. Biofuels Digest says venture capital firms invested $175.9 million in to develop algae-based biofuels throughout the United States last year, and $100-million of that went to Sapphire Energy. Panelists at the press conference also cited a San Diego regional economic study that found every $100 million of venture capital funding applied toward private sector research on algal biofuels would be expected to generate $15 million in economic activity and nearly $7.75 million in payroll—enough for 100 employees in the San Diego region.

San Diego’s algae biofuels leadership has also wisely cast a broad net for its coalition, for example, by enlisting economic development officials in Imperial County, a sparsely populated desert region to the east with 25 percent unemployment. Intense sunlight makes the Imperial Valley ideal for raising algae, and the slimy green pond scum grows rapidly—even in pools of brackish water on desert land deemed unfit for farming.

The juxtaposition of a nearby, undeveloped desert with San Diego’s biotech industry and academic research institutions “is perfect” for creating a regional algae biotechnology industry, said Tony Haymet, director of UCSD’s Scripps Institution of Oceanography.

Yet it also was apparent yesterday that SD-CAB is a “virtual” consortium because there is no there there, at least not yet. Mayfield explained that the purpose of the center is twofold: To train the next generation of scientists, technicians, and laboratory workers that the biofuels industry will need, and to collaborate on algae research efforts with other scientific institutions and companies like Sapphire Energy. Funding for SD-CAB is based on expectations that political leaders in San Diego and California can claim a portion of $800 million in economic stimulus funding to be allocated through the U.S. Department of Energy. “We’re also asking for corporate contributions,” Mayfield said.

The question, though, is whether San Diego can muster the political clout to get federal funding, which appears to be the only source of sufficient capital in this recession. Mayfield said SD-CAB intends to use San Diego’s recent campaign to win state funding for stem cell research as its model.

“What today is about is letting the world know that we are now organized to compete for federal funding and that we are collaborating in our research and development efforts,” said Mayfield.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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