Algae derived biofuel is a potential game-changer, but most players are years away from competing with conventional fuel on price. Viral Genetics [VRAL] and their subsidiary VG Energy believe they may have found a way to dramatically reduce production costs using proprietary technology developed through their novel research on cancer.
Dr. M. Karen Newell
at Texas A&M Health Sciences Center is an expert on metabolic disruption, a way of controlling the behavior of a cell by altering how it stores or uses energy. Her cancer research has been supported by Viral Genetics, which has optioned several of her patents under a licence agreement. “Cancer cells grow very quickly and are very greedy for fuel”, says Newell. “By interfering with their energy needs and by blocking fatty acid oxidation, we found we can make these tumors more susceptible to radiation and chemotherapy.”
Newell also found something else following a chance encounter with a colleague researching algae. The same inhibitor molecules she discovered that block tumors from burning fat also cause algae to increase lipid production by up to 300%.
This eureka moment may solve two of the big problems with scaling up algae biofuel: How do you “trigger” algae to store energy as fat rather than carbohydrates? And how do you get algae to secrete fats outside their cells so you can access the oil without destroying your feedstock?
Newell’s inhibitor molecules are active in minute amounts and trick the algae into storing rather than consuming their oil. This not only vastly increases lipid production, but also encourages these algae cells to excrete stored lipids outside their membranes where it can be harvested without killing the algae. Since this technique does not involve genetically altering algae like competing technologies, it also avoids numerous regulatory hurdles as it moves towards commercialization.
Efficiencies around their algae biofuel techniques are reportedly up to twelve times higher than conventional technologies. This breakthrough is now supported by a $750,000 grant
through the Texas Emerging Technology Fund.
Newell’s research findings have been confirmed by Dr. Joshua S. Yuan
, Assistant Professor at the Institute for Plant Genomics and Biotechnology at Texas A&M. He believes Dr. Newell’s research is exciting with potentially big implications for bioenergy. “One of the biggest problems with algal biofuels is how to get the lipids out of the cell,” said Yuan. By altering metabolic pathways, Newell and her team have greatly increased the amount of fatty acids retained by algae. “Some species will retain up to 70% of their body weight as fatty acids and then begin to extrude the lipids outside the cell membrane.”
Early experiments have produced predominantly unsaturated omega 3 oil instead of the more energy rich saturated fats. Their research targeting specific metabolic pathways may solve this problem around fuel production, however there are worse problems to have. The annual market for omega 3 fats as nutritional supplements is about $1.4 billion
, and growing at 10%
The potential breakthrough by Newell has caught the attention of some prominent experts in the algae biofuel field. John Sheehan
is currently the Biofuels Coordinator in the Institute on the Environment at the University of Minnesota. He has over twenty years experience in the field, was the former Manager for the Department of Energy’s algal biodiesel research program and the lead author of the program’s final report
in 1996, which is widely considered to be the one of the most comprehensive documents in algae fuel research.
Sheehan currently sits on the technical advisory board of Viral Genetics because he feels the company may have found the elusive “lipid trigger” that was the focus of much of the research before the government decided to halt research on algae biofuels.
“What they have stumbled on indirectly through a fairly unrelated field of research is the possibility that you really can turn on lipid production in algae,” said Sheehan. “For the last five years of the research at the National Renewable Energy Lab, we were entirely focused on exactly this question.”
Algae is attractive for biofuels due to their ability to grow much more quickly than terrestrial crops because they are very simple organisms. The problem is that algae tend to only want to produce the oil when they are stressed or believe they are in a scarce environment.
According to Sheehan, “algal biofuel researchers have been looking for the so-called ‘lipid trigger’ for over a decade. Our goal was to find a way to prevent algae from storing energy as anything but oil and that is what Karen Newell has appeared to have stumbled on.”
Does Sheehan believe that this research is a game-changer? “Whoever manages to break the trade-off between high growth of algae and high lipid content in the algae will be bringing a game changer to the table. That’s what everybody is after…and this might be it.”
Sheehan cautions that there remain several technical hurdles to overcome. “They are still researching how this is really going to play out in a practical scaled up engineered production system and they still need to figure that out.”
He also warns that competing with conventional fuels on price will remain a challenge in coming years and that breakthroughs like this will not bring back the days of cheap fossil fuels. “My own broad calculations are that real success in the R&D could make algal biofuels competitive at about oil prices at $100 per barrel. That’s an important perspective for people to keep in mind.”
If these challenges can be overcome, Sheehan believes we may soon see the day when algae biofuel is scaled up in places not typically known for agriculture. “Algae can be grown in areas where you could not grow traditional crops such as the desert southwest. It has the sunlight you want, it has the climate you want but it doesn’t have fresh water. But it does have large amounts of brackish groundwater. Because many of these algae strains are salt tolerant and in fact need the salt they are going to grow in environments that do not compete with the land fresh water resources that we need for food production.”
With such an exciting technology, why is Viral Genetics still trading around $0.03 per share? According to Sheehan: “This is all pretty new, they are moving ahead carefully and they are up against some really big players. I think as soon as they cross some of these thresholds of practical demonstration, I think you will see a big jump in interest.”
Viral Genetics recently launched wholly owned VG Energy
to house their accidental biofuel breakthrough. "The new brand will help open doors with energy companies," said Viral Genetics' CEO Haig Keledjian, who will serve as CEO of the new subsidiary. "We also believe it will help us attract partnerships.”