Exxon sees green gold in algae-based fuels. Skeptics see greenwashing.

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Oil giant under pressure to address climate change says it is getting closer to making biofuels viable

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Some scientists consider Exxon XOM 3.59% to turn Mobil Corp’s long-running quest algae Little more than a PR stunt in a transportation fuel. The oil giant says they are wrong.

Using genetic engineering, Exxon says it is closer to its goal of fueling jets and heavy trucks with oil distilled from tiny organisms. With government subsidies and incentives, it says it is on pace to make algae biofuels commercially viable by the end of the decade.

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Skeptics abound. Nearly every other major oil company has abandoned algae research after a flurry of investments at the beginning of the last decade, with few results. Exxon heavily touted its efforts in nearly ubiquitous commercials featuring ponds of green algae, which portray the company as a leader in the development of the fuel of the future.

Exxon claimed a breakthrough in 2017 but has yet to show results. As long as the company profitably produces commercial quantities of the biofuel, scientists familiar with algae research say skepticism will remain.

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Vijay Swarup, Exxon’s vice president of research and development, said he is aware of the notion that the company is using algae research to burnish its green credentials. Mr Swarup said, Exxon has made overly optimistic promises that have nurtured that criticism, but the project and its progress are real.

“There is always this irrational optimism and enthusiasm in the beginning,” said Mr. Swarup. “You have to have a vision. After that, it’s ‘show progress.’”

The attraction of algae is obvious. One of the most abundant organisms on Earth, algae capture carbon dioxide and when used as a fuel can reduce life cycle carbon emissions by more than 50% compared to fossil fuels, according to some research . Algae can also grow in salt water on non-arable land, meaning it will not compete with agricultural products, as corn-based ethanol does.

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Axon is following up its algae research with Viridos Inc., a San-Diego-based company co-founded by genomics pioneer Jay Craig Venter. For years, Viridos has transformed algae using the gene-editing tool CRISPR and other techniques, hoping to increase the fat content of algal cells to produce more oil, while enhancing their ability to grow. could.

But what is technically possible in a lab doesn’t always translate to the field, leaving doubt among other scientists as to whether these efforts could produce oily algae in sufficient quantities to produce biofuels on a commercial scale. Is. Axon and Viridos, formerly named Synthetic Genomics Inc., say they have replicated laboratory results in larger, outdoor growing ponds.

Viridos’ ponds in the California desert near the Salton Sea produced 5 grams of algae oil per square meter last year, less than 2 in 2018 when it began using its proprietary algae strand. The companies estimate they could reach 10 grams by the end of 2021 and are targeting 15 grams by 2022, a level some in the scientific community see as an inflection point at which algae biofuels become commercially viable. goes.

Even if Exxon and Viridos achieve the 2022 targets, algae will not be economically competitive with fossil fuels for the foreseeable future without substantial government subsidies. But according to Exxon’s calculations, a barrel of algal oil could cost as much as $350 when factoring in current low-carbon fuel standards and tax credits that add $260 to the value of each barrel. Conventional crude oil currently sells for less than $80 a barrel.

At those prices, Exxon and Viridos could make modest gains, Viridos chief executive Oliver Fetzer said. Companies aim for 25 grams per meter in the later decade, at which point the business becomes very lucrative, he said.

Once Exxon and Viridos meet those goals in the outdoor ponds, the key will be to grow the technology sustainably and find customers. Viridos says it is in discussions with potential customers and partners, including airlines and other large oil companies, to deploy the technology more widely.

Not everyone is convinced. Professor Kevin Flynn, a marine plankton ecologist at the UK’s Plymouth Marine Laboratory, said Viridos’ results need to be reviewed and that significant obstacles remain to large-scale production. Mr Flynn, who has researched algae biofuels for years, said all his and others’ work indicates the goal is misleading. Exxon and Viridos have said they will share their data with the scientific community.

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Algae researchers face myriad challenges. In addition to biological productivity limitations, large-scale algae production requires enormous amounts of land, water and fertilizer, making it extremely costly. Mr Flynn said three Belgians would need to flood more than 7 inches of water to meet just 10% of Europe’s fuel demand with unmodified algae, while 50% of the fertilizer would be used for European agriculture.

Some researchers concluded that the process required a large amount of energy to produce the algae, extract the oil, and then refine it, so that algae biofuel production would consume more energy.

“Whether they really checked all the boxes, I would be highly doubtful,” said Mr. Flynn. “There are people who have been trying to do this for decades.”

Exxon and Viridos say that their genetically altered algae are more productive, reducing the amount of resources needed, and that they recycle fertilizer and other inputs and use saltwater, making the process sustainable. She goes.

Mr Flynn and other scientists have also raised concerns about genetically modified algae making their way into the wild and heavily naturalized species. Exxon and Viridos say such concerns are overstated and note that their strands must be approved by the Environmental Protection Agency before they can be deployed outside.

The US government has been providing funding for algae research since the 1970s. The Department of Energy has awarded millions of dollars in research grants to private companies and others researching algae biofuels since 2007.

Exxon said it has spent more than $300 million on algae research since 2009, which is less than 3% of its annual research budget. In contrast, Exxon spent more than $500 million on advertising between 2009 and 2015, according to a 2019 study in the journal Climatic Change. The Massachusetts Attorney General sued Exxon in 2019 for allegedly misleading consumers about climate change, including through its advertisements. Exxon denies the allegations and the case continues.

Martin Keller, director of the Energy Department’s National Renewable Energy Laboratory, said skepticism about algae biofuels is understandable, but it appears Viridos has made significant progress.

According to Mr. Keller, algae biofuels are a potential solution to reduce carbon emissions from jet travel and heavy trucking. Areas that produce significant amounts of emissions are particularly difficult to decarbonize because electric batteries are too heavy and do not provide sufficient range for airplanes and trucks. The Energy Department earlier this year pledged an additional $100 million to fund biofuel research for aviation and other sectors.

“From a biological point of view, this is an achievement,” said Mr. Keller. “How do you measure it? That’s the next question.”

To read more from The Wall Street Journal, Click here.


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