Matrix Genetics Emerges from Algae Biofuel Wilderness With a Partner
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gotten out of the business or switched priorities, daunted by the scientific, financial, engineering, and market-based challenges in turning algae into a realistic alternative source of fuel. South San Francisco-based Solazyme (NASDAQ: SZYM), its neighbor LS9, and Berkeley, CA-based Amyris (NASDAQ: AMRS) have all offered tantalizing visions of making biofuels at scale, but all of them fundamentally depend on finding cheap and abundant sources of sugar to run their processes, and none have disrupted the fossil fuel industry.
Matrix Genetics, in contrast, is focusing strictly on the biology of engineering cyanobacteria strains that can efficiently produce oil in open ponds, with no need for sugar feedstocks. Algae has long been attractive to fuel researchers because it grows and divides far faster than traditional root crops like corn, meaning its oils can be harvested far faster. It also shouldn’t take up nearly the amount of acreage that’s required to grow root crops like corn and soybeans, and doesn’t need to live in prime agricultural land that is currently used for growing food.
The two main ingredients are energy from the sun, and carbon dioxide from the atmosphere, which the cyanobacteria should use to convert into oils. Matrix has no aspiration to become a vertically integrated energy company, Roberts says. It only wants to focus on the biological part of the problem, while its partner will focus on engineering problems like how you develop open ponds that don’t get overrun by opportunistic species; how you efficiently harvest the oils; and how the oils get refined, distributed, marketed, and sold in a cost-competitive way with fossil fuels.
“Our strategic partner is totally committed to developing an algal biofuel industry,” Roberts says. “The nature of the relationship is ideal for us. They are engineers. They understand about digging ponds, and harvesting and refining. They understand the engineering problems, which we’re not capable of addressing, and we don’t have the money to address. We’re good at the biology, which they desperately need. It’s a natural partnership, which we hope will for the first time provide what the algal biofuel industry is missing—an actual demonstration that biofuels can be grown and produced at scale in a commercially competitive way.”
Matrix’s biology-only strategy distinguishes it from a competitor like San Diego-based Sapphire Energy, which has raised big sums of money from Arch Venture Partners and Bill Gates and others, in a quest to hold onto a larger piece of the biofuel value chain. San Diego-based Synthetic Genomics struck a heralded $600 million partnership in 2009 with energy giant Exxon Mobil, but that collaboration didn’t last long, and Exxon CEO Rex Tillerson recently told Bloomberg News that he thinks Exxon is still 25 years away from making fuel from algae.
A few other companies have made progress in algae engineering over the past couple of years, including Bonita Springs, FL-based Algenol Biofuels, Omaha, NB-based Bioprocess Algae, and San Diego-based General Atomics, McCormick says.
Here are the basics of what Matrix is setting out to do, based on my conversations with McCormick and Roberts:
First, Matrix Genetics will seek to … Next Page »