The Blue-Green Revolution

March 13, 2019
The Blue-Green Revolution

Can algae deliver on the promise of a biofueled future?

Harvard Business School

By Alexander Gelfand; illustration by Eric Nyquist

Much hope and plenty of money are riding on the idea that battery-powered electric cars will help slow global warming by reducing tailpipe emissions. But when it comes to reducing the greenhouse gases produced by heavy transportation—namely, the trucks, planes, trains, and ships that move large volumes of goods and people long distances—humanity's best bet might lie with overweight algae. And staving off the climate apocalypse could be just the beginning.

That's the premise underlying a decadelong joint effort to develop algae biofuel by ExxonMobil and Synthetic Genomics Inc. (SGI), a private biotech company cofounded by genomics pioneer Craig Venter and Nobel Laureate Hamilton Smith, together with writer and life sciences investor Juan Enriquez (MBA 1986). And it may soon come to fruition: Last March, in the wake of a scientific breakthrough by SGI, the two companies committed to producing 10,000 barrels of algae biofuel a day by 2025.

According to Enriquez, who directed HBS's Life Sciences Project prior to his current role as managing director of Excel Venture Management, algae biofuels were once the darlings of the alternative energy sector. That's because the aquatic microorganisms use sunlight, water, and carbon dioxide to photosynthesize sugar, proteins, and fat—the latter in the form of an oil that can replace fossil fuels in applications where batteries either can't store enough power or are simply too heavy to lug around, like commercial aviation and maritime shipping.

In addition, algae can grow in salty or brackish water under extremely harsh conditions; so unlike other biofuel feedstocks such as corn and soy, algae don't need to compete with agricultural crops for fresh water and arable land. And the oil they produce is free from the pollutants that must be removed from fossil crude.

As a result, algae could pull fossil-fuel generated CO2 out of the atmosphere and transform it into nearly carbon-neutral diesel or jet fuel with minimal environmental impact—a handy trick when demand for transportation energy is on the rise, and the need to manage global emissions grows ever more urgent.

The prospect of a clean energy source that could serve double duty as a carbon-capture technology has proven irresistible to investors, who have sunk hundreds of millions of dollars into dozens of algae biofuel startups. Unfortunately, says HBS Senior Fellow Joseph Lassiter, whose research focuses on developing carbon-neutral energy supplies, efforts to produce algal crude cheaply and efficiently have met with nothing but failure. The reason: basic biology.

One can easily persuade algae to produce more oil by starving them of nutrients like nitrogen, prompting the single-celled organisms to bulk up on fat like bears preparing for winter. Alas, just like bears, the microscopic butterballs eventually go into hibernation. And once that happens, they stop growing, negating the gains made in oil production.

SGI solved that biological catch-22 by genetically engineering algae to get fat without going comatose. As a result, "You can take the brakes off oil formation without putting the brakes on growth," says SGI's CEO, Oliver Fetzer.

In a study published in Nature Biotechnology in 2017, SGI researchers analyzed the genome and metabolism of the marine algae Nannochloropsis gaditana and uncovered a group of genes responsible for regulating oil production. By tweaking one of those genes with the powerful editing tool known as CRISPR, the team ultimately doubled the amount of oil produced by the algae without significantly hindering their growth.

SGI's breakthrough finally provides a line of sight to a scalable algae biofuel. The company is already growing algae in outdoor ponds at a test facility near California's Salton Sea, and Fetzer envisions a day when large pools of algae will be located wherever saltwater and consistently warm temperatures are to be found. The ponds could even be parked next to heavy CO2 emitters like cement factories and power plants so that the organisms can suck up excess carbon while churning out clean, renewable biocrude.

Having cracked the problem of boosting oil production, engineering algae to make petrochemicals ranging from fertilizers to plastics ought to be relatively straightforward. What's more, the knowledge gained from the biofuels project should eventually permit researchers to turn algae into microscopic factories for the manufacture of virtually any organic compound, leading to what Enriquez describes as a full-blown algal revolution. "You can make vaccines in the stuff, you can make medicines in the stuff, you can make food in the stuff," he says.

Capitalizing on its burgeoning algal expertise, SGI has already bred one strain that can make highquality protein and healthful fatty acids, and it hopes to coax others into producing biological drugs such as the antibodies used to treat cancer and autoimmune diseases.

Right now, however, the biofuel breakthrough is generating the most buzz—and for good reason, given the looming possibility of catastrophic climate change and the desperate need for fossil-fuel substitutes.

Fetzer hopes to have a pilot facility up and running by 2025 that can meet ExxonMobil's production goals while sucking CO2 from a heavy polluter. He readily admits that challenges remain—like figuring out how best to extract the algae from their ponds and expel their oil—but the goal of producing algae biofuel that can compete with traditional diesel is finally within reach.