Fueling The Future
The oil well of tomorrow may be in a California lab full of genetically modified, diesel-
spewing bacteria.
From: Issue 122 | February 2008 | Page 45 | By: Elizabeth Svoboda
LS9's world headquarters looks like a dorm room on move-out day. The reception area at
the biotech company's San Carlos, California, digs is stark white, unashamedly bare. No
one has bothered to spring for prints or posters for the walls, not even from Ikea.
Haphazard stacks of boxes line every corridor. It's no surprise LS9 doesn't put much of a
premium on appearances--after all, its most important employees are patented microbes
too small to be seen. "This is where we grow the bacteria," says Steve del Cardayré, the
company's vice president for research and development, leading me to a lab space no
bigger than your typical college double. He points to a vat containing an oatmeal-like
slurry--carbohydrates derived from plant matter that feed the microbes. "After they're
finished growing, all we have to do is take the mixture out and spin it, and density makes
it separate into its components."
The most important of those components is 21st-century black gold: a compound
chemically identical to the diesel fuel that powers millions of U.S. cars and trucks. LS9
leads the newly emerging pack of companies that, with DNA-engineering technology, are
custom-creating potentially lucrative species of bacteria that can manufacture fuel on
command. LS9's biggest competitor, Emeryville, California-based Amyris
Biotechnologies, recently started making bacteria-based diesel in addition to its longtime
focus on developing a bioengineered malaria drug. And biotech's big daddy, Craig Venter,
a champion of modifying microorganisms to make fuel, has entered the fray; his latest
brainchild, Synthetic Genomics, plans to create bugs that excrete hydrogen and ethanol--
though, due to the complexity of engineering completely new organisms, the company
likely won't produce any fuel for years. But LS9, founded in 2005, has a head start on its
rivals--and is closest to putting bacterial gas in your tank.
As crude-oil prices have risen toward the $100-per-barrel mark, the arguments for
alternative fuel sources have grown stronger. "What intrigued me was the strong
economic case for bacteria fuel," says LS9 president Robert Walsh, who joined the
startup after 26 years at Royal Dutch Shell. Because the fuel produced by LS9's microbes
is virtually pump-ready--requiring only a simple cleaning step to filter out impurities--
making bacteria fuel uses 65% less energy than making ethanol, which needs extensive
chemical processing that drives up its price and damages its good-for-the-planet cred.
LS9's finished product also has 50% more energy content--a gallon of bacteria fuel would
last your car about 50% longer than a gallon of ethanol. "LS9's fuel has a number of
advantages in terms of cost, security of supply, and impact on the environment," says
Noubar Afeyan, CEO of Flagship Ventures, one of the VC firms that contributed to the
startup's $20 million of funding in 2007. "It offers a commercially attractive path to
sustainability."
That path began unexpectedly at Codon Devices, Harvard geneticist George Church's
rapid-DNA-synthesis company. Church and his lab staff had regular brainstorming
sessions in which they liked to muse on out-of-the-box applications for the technology
they'd developed, which allowed them to redesign the genomes of existing organisms
with a few mouse clicks. One day, someone suggested engineering a bacterium that could
make fuel, since the lab had just been awarded a Department of Energy grant. "We're
dependent on petroleum, so we don't need some alternative to petroleum. We need a way
to make petroleum itself," del Cardayré says. "Biology can do it. Over the course of
billions of years, cells have figured out that hydrocarbons are a good way to store
energy."
Accordingly, LS9 is staking its prospects not on inventing an entirely new biological
pathway, but on exploiting an existing one. Bacteria naturally turn the sugars they
consume into fatty acids, which are later converted to lipids for storage. By a stroke of
genetic serendipity, fatty acids are only a few molecular linkages removed from diesel
fuel, so it has been fairly simple for LS9 scientists to tweak existing bacteria--including
familiar varieties such as E. coli--to yield new, diesel-producing strains. "We divert those
fatty acid pathways," del Cardayré says. "It's like a detour."
The strategy has already met with small-scale success; an assortment of odd-shaped
beakers lines the San Carlos lab's shelves, each holding a few teaspoons of amber-colored
diesel. Walsh estimates large quantities of the finished fuel will be market-ready in three
to five years. The company is also perfecting a bacterium that produces crude oil, which
could be sent to refineries and turned into any imaginable petroleum product, from
gasoline to Vaseline.
Still, a host of practical problems must be solved before this industry can take off, and
some may prove to be deal breakers. For one thing, public skepticism about all things
genetically modified, from food to pet goldfish, may make it difficult for these companies
to gain regulatory approval for their products. In a 2006 Pew Initiative study, almost a
third of respondents said they viewed genetically modified products as unsafe. "The cry
right now is for anything to replace petroleum, but $95 crude is masking a lot of the
issues," says Martin Tobias, a biodiesel expert and venture capitalist at Ignition Partners.
"It's going to be 10 times harder to get something like this available and accepted than if
you were using a naturally occurring organism. Think how difficult it is to get genetically
engineered drugs approved."
Then there's the multimillion-dollar question of how to translate a beaker of success to
global scale. No one has ever made genetically engineered fuel in industrial quantities, so
no one knows what's going to happen when companies try to grow their bacteria in vats
the size of trailers. Startups producing biodiesel from algae--which are closely related to
bacteria--have encountered difficulties when trying to scale up; in large numbers, the
organisms sometimes crowd one another out and emit toxic waste that halts the
production process. "Even if you can do this in a test tube, getting the same kind of
quality on a large scale could be an issue," says Tom Todaro, CEO of Targeted Growth, a
company that's aiming to increase the efficiency of biodiesel production. "People fail to
understand how big the oil and gas industry is--just how much fuel you have to be able to
produce in a day to compete."
Church admits the challenges are daunting; he isn't picturing bacteria-fuel pumps at every
Mobil station just yet. "We know we'll be competing with hydrogen, ethanol, and electric
cars," he says. But in unguarded moments, he dares to dream: "If this works out, much of
the current motivation for switching away from hydrocarbons might vanish." Why seek
an alternative to petroleum, he figures, when a microscopic army of trillions can churn it
out for you 24-7?
