So that’s what happened to the Synthetic Genomics, Exxon algae fuel deal

One of the most exciting announcements back in the Summer of 2009 for the biofuel folks, was the much-discussed potentially $600 million deal between upstart startup Synthetic Genomics, led by genome guru Craig Venter, and oil giant Exxon to make algae fuel at commercial scale. While that partnership seemed to strain a bit in late 2011, I’ve never been quite clear on what actually happened to the plans.

But in a detailed Bloomberg article on Chevron’s move away from biofuels, Venter and Synthetic Genomics have finally confirmed that the Exxon-funded research didn’t produce the desired results and was subsequently down graded. The article says that in late 2011 an algae strain that proved promising in the testing greenhouse, didn’t hit its performance milestones in an Exxon pond in Texas.

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As a result, Bloomberg says that Exxon changed the contract to focus on long term research instead of commercial production, and Synthetic Genomics was forced to lay off more than half its staff that were working on biofuel development. Venter also clarified back in late 2011, that the Exxon deal was to research naturally occurring algae cells only (not synthetic ones), and Venter hoped that Exxon would come around to funding the research based on synthetic algae cells.

Venter says that biofuels made from algae that will be able to scale, and compete with oil, will have to be synthesized and will not come from nature. In the Spring of 2010, Venter and his team successfully created the first synthetic bacterial cell, which was controlled completely by a synthetic genome. Alas, perhaps algae fuel won’t be the first application for that ground breaking research.