Genomatica Clears Way for ‘Sustainable Chemical’ Demo Plant

6/2/09Follow @bvbigelow

San Diego’s Genomatica says it has checked off another technical accomplishment in its quest to take the “petroleum” out of the petrochemical industry.

After showing last year that it had engineered bacteria to make butanediol, a key industrial chemical also known as BDO, Genomatica says it now can make BDO in commercial grade batches. In an announcement today, Genomatica says its latest technical feat clears the way for construction of a small-scale industrial demonstration facility. The startup got $20 million in venture funding two years ago from Silicon Valley’s Mohr Davidow Ventures, Draper Fisher Jurvetson, and Alloy Ventures, so Genomatica may require another venture round before it embarks on construction.

Christophe Schilling

Christophe Schilling

“The recent achievement allows us to know that every step in our process works” and “fully validates” the technology, Genomatica’s Christophe Schilling told me last week. He estimates that construction of a BDO demonstration plant could begin early next year and would cost between $10 million and $15 million. Schilling, who co-founded the company in 2000, was named as Genomatica’s CEO last month, replacing former CEO Chris Gann.

Like most hydrocarbon products, BDO is currently produced from crude oil under tremendous heat and pressure in oil refinery “cracking” units. So Genomatica’s approach represents a potential revolution for the chemical industry, one that would replace an industrial process based on fossil fuel with a biotech-based process that uses sustainable technology.

Another amazing factoid in this is that BDO is normally toxic to E coli. Yet Genomatica has engineered the bacteria’s genes to churn out BDO while consuming sugar, oxygen, and other nutrients in fermentation tanks.

The global petrochemical industry makes about 3 billion pounds of BDO a year for a worldwide market estimated at almost $3 trillion a year.

The colorless, viscous liquid is what Schilling calls an “intermediate chemical.” As I reported in October, the pharmaceutical industry uses BDO to make certain drugs and the antiseptic Betadine, and chemical manufacturers use it to make solvents, spandex, lycra, and a resilient plastic material used in skateboard wheels and automotive parts.

Since Genomatica adjusted its strategy in 2006 to exploit opportunities in the chemical industry, the company has methodically identified each step in a complex process of bacteria-based BDO production. The startup then worked to eliminate each obstacle along the way. Schilling says the most recent hurdle was entirely a chemical engineering problem.

While the company showed last year it could genetically engineer bacteria to make BDO, Schilling says the E. coli is producing BDO in concentrations of 10 percent or less. The BDO also is in the same fermentation broth as the bacterial cells, along with salts and other unwanted contaminants. “We ultimately needed to produce BDO in concentrations of 99 percent,” Schilling says. “Our process engineers did a fantastic job of designing a process that works in a way that scales up.”

genomatica-lab1Schilling says Genomatica’s technique operates at lower cost than traditional BDO manufacturing processes, which could free existing BDO producers from relying on volatile commodity markets for crude oil. Meanwhile, Genomatica says its researchers also have demonstrated “20,000-fold increases in the concentrations of BDO that its microbes can produce,” which represents additional potential cost reductions.

Schilling also assures me that Genomatica’s process won’t impact the cost of sugar—or trigger a “food or fuel” debate comparable to the corn ethanol industry—because the amount of sugar consumed by its genetically engineered bacteria is relatively small. In any case, sugar’s role in the food supply is less significant than corn’s, which is especially important for livestock feed, Schilling says.

A Genomatica spokeswoman says that federal ethanol mandates require about one third of the U.S. corn production to go toward fuel, which can have an impact on commodity prices for corn. In contrast, the spokeswoman says four world-scale BDO plants would use only about 1 percent of the world’s sugar supply.

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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