Seaweed Biofuel Maker, Bio Architecture Lab, Snags Partnership With Norway’s Statoil

9/15/10Follow @xconomy

A startup with a dream of turning seaweed into renewable biofuels just got some important validation from a big oil company.

Berkeley, CA-based Bio Architecture Lab said today it has secured a partnership with the world’s biggest offshore oil and gas producer, Norway-based Statoil, to build up capabilities to turn seaweed from off the Norwegian coast into ethanol for commercial markets in Europe. Financial terms of the deal aren’t being disclosed, although it’s a 3-year agreement in which Statoil will pay all the R&D expenses while allowing Bio Architecture Lab to receive commercial royalties on all ethanol and chemical byproducts generated by the partnership.

Statoil, while it may not have the name recognition in the U.S. of a behemoth like ExxonMobil, is no slouch. It has more than 28,000 employees worldwide and generates enough revenue to be ranked No. 36 on the Fortune 500 list.

“It’s game-changing for us because we’re partnering with a major energy company, and at the end of the day, all commercialization roads lead to energy companies. This, for us, is a really platform to commercialize our technology,” says Dan Trunfio, Bio Architecture Lab CEO.

Bio Architecture Lab, founded in 2007 with technology from University of Washington biochemist David Baker, has been on a roll the past couple years. Its big idea is to convert multi-cellular “macroalgae” (aka seaweed) into renewable fuels instead of the fast-dividing “microalgae” that many other companies are pursuing as an alternative to fossil fuels. Bio Architecture Lab has secured about $33 million in venture capital, government grants, and strategic investments for this idea. The technology still hasn’t been proven to be cost-effective at big commercial scales—the goal for all biofuel companies at the moment—but Bio Architecture Lab has secured critical early support from the U.S. Department of Energy’s ARPA-E program, chemical giant Dupont, the government of Chile, and Statoil. Trunfio, a former executive at oil giant Royal Dutch/Shell Group, joined the startup as its CEO back in May.

Dan Trunfio

Dan Trunfio

Why seaweed? To hear Trunfio tell the story, Bio Architecture Lab has pursued its niche in seaweed for a variety of reasons, both economic and political. One of the big problems with biofuel is finding a cheap, scalable, environmentally conscious way to get the raw biomass needed to pump out large volumes of fuel. Corn and soybeans aren’t ideal because they take away land that could be used to grow food crops. That has the potential to irritate critics who frame the idea as a “food-versus-fuel” trade-off. Seaweed avoids that problem, and it has a high amount of sugar in it that can be converted into energy, and it doesn’t have the tough cellulosic backbone called lignin that many plants have, which scientists still don’t know how to break down in an efficient industrial process.

Bio Architecture Lab has been testing its process extensively over the past year. Importantly, the company has formed partnerships with the Chilean government and aquafarmers there to obtain necessary seaweed supplies. The Norwegian coast is another ideal place for this kind of exploration because its seaweed is particularly rich in sugar content, and Statoil has so much experience with the terrain because of its offshore oil drilling. But when asked about access to seaweed biomass supplies, and the necessary permits, Trunfio said that question will come later in the partnership and will be handled by Statoil, not the startup.

The process Bio Architecture Lab plans to test in Norway is the same one it has been honing over the past year in Chile, Trunfio says. And the partnership will enable Bio Architecture, with a little more than 30 employees today, to almost double its staff by the end of the year, Trunfio says.

Anyone serious about making renewable biofuels has to be ready to spend years of effort, and many millions of dollars on the tricky process of making fuel at large enough scales to really make a dent in an enormous market like fuels.

With his two-decade background in the oil industry, this wasn’t news to Trunfio. So he was intent on making sure Bio Architecture Lab found partners with the money and manpower to help the company make that big leap from laboratory to commercial scale. While Statoil isn’t as well known in the U.S. as, say, Exxon Mobil, it is a “perfect” partner for a seaweed biofuel company because of its experience in offshore oil drilling, Trunfio says.

“We’re a perfect fit for each other,” Trunfio says. “We are a startup, we have great technology. They like the technology, it fits with their core competency, and they have a balance sheet that we don’t. It’s a platform for us to commercialize.”

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