ExxonMobil devotes $600M to algal biofuel project with Synthetic Genomics

Irving, Texas-based ExxonMobil (NYSE:XOM) plans to spend $600 million to develop biofuels from algae, including more than half to La Jolla, Calif.-based biotech firm Synthetic Genomics, founded by genome scientist J. Craig Venter.

The two companies plan to collaborate on research and development of algae-based fuels compatible with gasoline and diesel. If the alliance meets its technological milestones, Exxon expects to spend about $300 million on internal costs, with potentially more than $300 million going to Synthetic Genomics.

First on the agenda is to build a test facility in San Diego, officials said. Exxon noted that years of research were ahead before a commercial product could be available.

ExxonMobil has spent more than $1.5 billion in the past five years on other renewable energy and efficiency projects. Those include technology to improve the efficient use of fuel in automobiles, such as tire liners that keep tires inflated longer, advanced engine oil, and lightweight automobile plastics. In the renewable sector, ExxonMobil has sponsored research in solar, biofuels, and carbon capture and storage, and an affiliate has developed a lithium battery separator film for hybrid electric cars (see Tonen to build battery parts plant and Exxon's Tonen now producing lithium ion separator film).

Still, the company was widely criticized by shareholders last year for not doing enough in the renewables sector (see More investors join call for Exxon Mobil to go green and Rockefellers push for more renewables at Exxon Mobil).

"The real challenge to creating a viable next generation biofuel is the ability to produce it in large volumes which will require significant advances in both science and engineering," said Venter, CEO of Synthetic Genomics, in a news release. "The alliance between SGI and ExxonMobil will bring together the complementary capabilities and expertise of both companies to develop innovative solutions that could lead to the large scale production of biofuel from algae."

In 2007, Synthetic Genomics began a joint venture with the Asiatic Centre for Genome Technology to develop more high-yielding and disease-resistant plant feedstocks. The JV worked to sequence and analyze the genomes of the oil palm and jatropha (see Oil palm, jatropha genome work moves ahead).

The Asiatic Centre is a subsidiary of Malaysian conglomerate Genting Group, which in October paid $8 million to buy a small stake in Synthetic Genomics (see Cars, energy storage and windy dealmaking).

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