Exxon鈥檚 $100 million algae biofuel investment comes up short
Exxon Mobil Corp. (NYSE: XOM) is cutting its losses on algae biofuels after investing over $100 million only to find that it couldn鈥檛 achieve commercial viability.
Earlier this week, Exxon announced that while it wasn鈥檛 throwing in the towel, it would be forced to restructure its algae research with partner California-based Synthetic Genomics Inc (SGI).
When the two launched their algae-derived biofuels program in 2009, Exxon planned to invest around听听with the goal of developing algae fuels within 10 years.听(Related article:听)
But it鈥檚 been more complicated than expected, and after $100 million down the drain, it has become clear that much more research鈥攁nd at least another decade and half鈥攁re needed.听
Exxon spokesman Charles Englemann told听听that the partners had 鈥済ained significant understanding of the challenges that must be overcome to deliver scalable algae-based biofuels.鈥�
What they were hoping to achieve on a commercially viable scale was the exploitation of algae as a source of oil that could be converted in existing refineries into transportation fuels.听
According to Synthetic Genomics鈥� Chief Technology Officer James Flatt, the research has demonstrated that simple modifications of natural algae are not sufficient for commercial scale production. Research will now be shifted to focus on developing new strains of algae that can reproduce quicker. Or simply put, they will need to change the metabolism of algae. (Related article:听)
For SGI, it means a听that allows it to get rid of the market pressure and focus on real research, getting back to the basic science. Exxon and SGI announced a new co-funding agreement that will bring their relationship into the above-mentioned phase II.
What does it mean for algae? It鈥檚 still growing on everyone, but there鈥檚 no commercial quick fix.
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