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In July, oil-industry heavyweight ExxonMobil announced an investment of $600 million in the biofuel company Synthetic Genomics.

The company was founded by the famous American biologist and entrepreneur J. Craig Venter who was awarded the National Medal of Science by President Obama last week. The award honors Mr. Venter´s advancements in the science of genomics. He is president of the J. Craig Venter Institute conducting research in the field of synthetic biology which combines chemistry, biology and engineering to create new organisms that might prove beneficial to develop new medicaments, materials and fuels.

Synthetic biology can become vital to tackling the challenges that lie ahead. A growing world population which will be approximately 9 billion by mid century according to the U.S. Census Bureau requires more water, food, energy, accommodation and a functioning environment.

With the financial support from Exxon, Synthetic Genomics is working to develop biofuels from algae that can be brought to industrial scale in the foreseeable future. Exxon expects algae to be superior to corn, sugar cane or palm trees when it comes to fuel production.

Algae converting CO2 into fuel using energy from the sun attracted the attention of Big Oil at a time when Exxon, Chevron and the like are falling behind huge public oil companies from South America and the Middle East in terms of oil reserves. Exxon for instance has only direct access to less than one percent of the world´s oil and gas reserves. (-> http://tonto.eia.doe.gov/ftproot/presentations/hrt310/hrt310.html)

Exxon which appeared to be hesitant to get involved in alternative energies is now paying more attention to what´s going on in the energy tech sector. The partnership with Synthetic Genomics should be on a long-term basis and according to the company, billions of dollars could follow the initial investment. Unlike the venture capital industry and the government, oil companies have the financial resources to bring alternative energies to a scale that is needed to bring down costs and gain a noticeable market share.

While oil will remain a very profitable business for decades to come, oil companies feel the pressure to diversify as regimes around the world are increasing their control over oil reserves, while the negative effects of our addiction to oil for the entire economy and national security become more obvious. Therefore I expect that ExxonMobil, Chevron, ConocoPhilips and other major energy companies will become the driving force in the alternative energy business in the medium term.  Many of these companies are already involved in other area  such as the development of batteries for electric cars and hybrids. Exxon Mobil Chemical Co. is working with major battery manufacturers to advance battery technology - a future key industry given the upcoming electrification of personal mobility which demands more efficient energy storage media. (Exxon`s hybrid car battery breakthrough: http://www.chron.com/disp/story.mpl/front/5334375.html)

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This entry was posted on Sunday, October 18th, 2009 at 7:44 AM and is filed under Energy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.