Sunday, June 15, 2008

Microbes Eat Plant Waste and Excrete $50-a-Barrel Crude Oil

Diesel fuel produced by genetically-engineered bugs.

Several Silicon Valley companies are already genetically altering microbes and small organisms--bugs, so to speak--so that they produce something for nothing.

The something? How about petroleum products.

The nothing? How about agricultural waste--wood chips or straw or other biomass.

The organisms eat the waste products and excrete crude oil.
“Ten years ago I could never have imagined I’d be doing this,” says Greg Pal, 33, a former software executive, as he squints into the late afternoon Californian sun. “I mean, this is essentially agriculture, right? But the people I talk to – especially the ones coming out of business school – this is the one hot area everyone wants to get into.”

This sounds far-fetched, but the bugs are producing crude right now. In about a month, the experimental microbes will have produced enough oil to fill the first gas tank with something engineers call "renewable petroleum".
Mr Pal is a senior director of LS9, one of several companies in or near Silicon Valley that have spurned traditional high-tech activities such as software and networking and embarked instead on an extraordinary race to make $140-a-barrel oil (£70) from Saudi Arabia obsolete. “All of us here – everyone in this company and in this industry, are aware of the urgency,” Mr Pal says.

What is most remarkable about what they are doing is that instead of trying to reengineer the global economy – as is required, for example, for the use of hydrogen fuel – they are trying to make a product that is interchangeable with oil. The company claims that this “Oil 2.0” will not only be renewable but also carbon negative – meaning that the carbon it emits will be less than that sucked from the atmosphere by the raw materials from which it is made.

Besides making Saudi oil a thing of the past, it will also render Al Gore's dreams of taxing the world back into the Stone Age obsolete.

Also made obsolete will be the need for heavily-subsidized ethanol, which has created food shortages in some countries and raised the price of foodstuffs in the USA, due to corn being bought up by subsidized ethanol makers. The "energy-intensive final process of distillation" used in the manufacture of ethanol is "virtually eliminated because the bugs excrete a substance that is almost pump-ready."

Crude oil is only a "few molecular stages removed from the fatty acids normally excreted by yeast or E. coli during fermentation." The microbes can feed on just about anything, "as long as it can be broken down into sugars.

LS9 has already convinced one oil industry veteran of its plan: Bob Walsh, 50, who now serves as the firm’s president after a 26-year career at Shell, most recently running European supply operations in London. “How many times in your life do you get the opportunity to grow a multi-billion-dollar company?” he asks. It is a bold statement from a man who works in a glorified cubicle in a San Francisco industrial estate for a company that describes itself as being “prerevenue”.

Inside LS9’s cluttered laboratory – funded by $20 million of start-up capital from investors including Vinod Khosla, the Indian-American entrepreneur who co-founded Sun Micro-systems – Mr Pal explains that LS9’s bugs are single-cell organisms, each a fraction of a billionth the size of an ant. They start out as industrial yeast or nonpathogenic strains of E. coli, but LS9 modifies them by custom-de-signing their DNA. “Five to seven years ago, that process would have taken months and cost hundreds of thousands of dollars,” he says. “Now it can take weeks and cost maybe $20,000.”

The company is not interested in using corn as feedstock, given the much-publicised problems created by using food crops for fuel, such as the tortilla inflation that recently caused food riots in Mexico City. Instead, different types of agricultural waste will be used according to whatever makes sense for the local climate and economy: wheat straw in California, for example, or woodchips in the South.

When will the microbe-produced oil be ready to fuel cars? Or rather, when will companies, such as LS9, be ready to mass produce "renewable petroleum"?

Right now, it looks like the start of anything resembling a large-scale project is about three years down the road.

The closest that LS9 has come to mass production is a 1,000-litre fermenting machine, which looks like a large stainless-steel jar, next to a wardrobe-sized computer connected by a tangle of cables and tubes. It has not yet been plugged in. The machine produces the equivalent of one barrel a week and takes up 40 sq ft of floor space.

However, to substitute America’s weekly oil consumption of 143 million barrels, you would need a facility that covered about 205 square miles, an area roughly the size of Chicago.

That is the main problem: although LS9 can produce its bug fuel in laboratory beakers, it has no idea whether it will be able produce the same results on a nationwide or even global scale.

“Our plan is to have a demonstration-scale plant operational by 2010 and, in parallel, we’ll be working on the design and construction of a commercial-scale facility to open in 2011,” says Mr Pal, adding that if LS9 used Brazilian sugar cane as its feedstock, its fuel would probably cost about $50 a barrel.

When oil is $50 a barrel, it isn't attractive to work on alternatives. When oil hovers around the $140-a-barrel price, alternatives suddenly become attractive.

The ultimate end result may not be exactly something for nothing--companies, such as LS9, and their investors need to be compensated for their efforts and risk--but it's close.

As long as PETA doesn't get involved, the well-fed bugs will just be happy to be there.

by Mondoreb
hat tip: Mike Renzulli, Freedom's Phoenix
* Silicon Valley is experimenting with bacteria that have been genetically altered to provide 'renewable petroleum'

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