Synthetic Genomics Pens Multi-Year Algae to Biofuel Deal with ExxonMobil

California-based Synthetic Genomics Inc (SGI). has penned a deal with oil-giant ExxonMobil (NYSE:XOM) to develop next generation biofuels using algae.

The deal could be worth as much as $300 million for the privately held SGI which was founded in 2005 and focuses, among other things, on designing advanced biofuels with superior properties compared to ethanol and biodiesel; and harnessing photosynthetic organisms to produce value added products directly from sunlight and carbon dioxide.

"This agreement between SGI and EMRE represents a comprehensive, long-term research and development exploration into the most efficient and cost effective organisms and methods to produce next generation algal biofuel," said J. Craig Venter, Founder and CEO of SGI. "We are confident that the combination of our respective expertise in science, research, engineering and scale-up should unlock the power of algae as biological energy producers in methods and scale not previously explored."

We have written extensively here on eBoom on the potential that algae has as source for biofuel.In fact, the idea of growing and processing algae for fuel is not new.  In 1978, Jimmy Carter launched the Aquatic Species Program which began looking at ways to create bio-diesel from plants, in this case algae.

And the potential is huge.

According to the U.S. Department of Energy (DOE), algae may be able to produce 100 times more oil per acre than soybeans—currently the leading source of U.S. biodiesel—or any other terrestrial oil-producing crop.  Because of its high energy content, oil from algae can be refined into biodiesel, green gasoline, jet fuel or ethanol. Also, algae needs only water, sunlight and CO2 to grow. In theory, it could fill all of the US' fuel needs--if the technology were there, and the production viable.

According to an SGI fact sheet (PDF), algae yields greater volumes of biofuel per acre of production than other crop plant -based biofuel sources. Algae could yield more than 2000 gallons of fuel per acre of production per year. Approximate yields for other fuel sources are far lower.

Examples include:
• Palm - 650 gallons per acre / year
• Sugar cane - 450 gallons per acre / year
• Corn - 250 gallons per acre / year
• Soy - 50 gallons per acre / year

The multi-year deal between SGI and ExxonMobil will see SGI providing "a systematic approach to find, optimize, and/or engineer superior strains of algae, and to define and develop the best systems for large-scale cultivation of algae and conversion of their products into useful biofuels."