Big oil companies touted algae as a climate solution. Now everyone has withdrawn the funding

<span>Photo: Michael Macor/AP</span>” src=”–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTU3Nw–/″ data “–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTU3Nw–/>2432”</div>
<p><figcaption class=Photo: Michael Macor/AP

One by one, big oil companies have touted their investments in algal biofuels as the future of low-carbon transportation — and one by one they’ve all backed out. Now, after the last remaining seaweed advocate, ExxonMobil, announced its withdrawal, insiders said they were disappointed but not surprised.

Algae research has been the focus of Exxon’s green marketing campaigns for years, and has often been criticized as greenwashing rather than a genuine research effort.

But several of its former research partners told the Guardian that it is serious about the potential of algae biofuels – and explains why it stayed in the field long past the point at which other oil companies pulled out – but not seriously enough.

Related: Shell’s actual spending on renewable energy is a fraction of what it claims, the group claims

According to spokesman Casey Norton, Exxon has invested $350 million in algal biofuels in its 12 years in space. (Norton says that’s more than double what the company spent promoting this research in ads.)

Even so, every algae researcher who spoke to the Guardian said that a genuine attempt to commercialize biofuels, algae or otherwise, would require billions of dollars and a long-term commitment to overcoming seemingly fundamental biological limitations of wild organisms. And no oil company was willing to go that far.

“It’s very difficult and very expensive to bring these technologies to market,” said George Huber, whose biofuels research at the University of Wisconsin at Madison was funded by Exxon for years. “It won’t happen overnight. It’s great that they’re making these commitments, but you know they need to start putting more capital into these projects.”

He added: “They are driven by Wall Street and they need to keep their stock prices up and their shareholders happy. And that usually brings in a lot of money. All the oil companies have talked about the need to do more sustainable things, but it’s hard to monetize. And most of the money comes from oil.”

The attractiveness of algae as a feedstock for biofuels was two-fold: Because they grow in large concentrations in ponds, they do not compete with food crops for arable land. And some strains produce large amounts of lipids — fatty acids that can produce an oil that’s relatively easily converted into fuel. But it hasn’t been easy to compete with the abundant and heavily subsidized fossil fuels, especially gas.

One of the biggest challenges was that wild strains of algae couldn’t provide the high lipid levels needed to produce large quantities of fuel, said Todd Peterson, former CTO of Viridos, Exxon’s longtime and now former algae research partner.

Because of this, Viridos focused on genetically engineering the organisms to maximize lipid production. And they made real progress. The magic formula for the commercial viability of algal biofuels is a strain that can produce 15 g of oil per square meter outdoors, and a viridos strain had reached 10. “It’s hard to manipulate an organism that’s hundreds of millions of years old to behave differently,” Peterson said.

Peterson, who worked for the company from 2013 to 2018, said he always felt that the scientists at Exxon that Viridos worked with were serious about the research. “I’m disappointed,” he said of Exxon’s withdrawal from Algae, “but I’m trying to keep an open mind. You never know how priorities will shift within a company.”

Viridos laid off 60% of its workforce after Exxon pulled out of the sector in December 2022, Bloomberg announced just last month. On Monday, Viridos announced a $25 million funding round led by Bill Gates’ Breakthrough Energy, which also included Chevron and United Airlines.

Related: New Report Shows Red States Leads US in Solar and Wind Energy Production

Despite tremendous progress over the past decade, most algae researchers say algal biofuels on the scale needed to meet current fuel needs are at least a decade and more likely two decades away. It’s possible that more investment could have moved the needle faster in the years when oil companies touted their investments in space. Exxon ended up investing just over half of the $600 million it promised in 2009, according to Norton.

Several former Viridos employees, who asked not to be known for signing non-disclosure agreements, said Exxon’s research funding never seemed like much, but the company would send large crews to the seaweed ponds to get video for its ads. “I would see how they do and I wish they had given us more research funding instead of spending so much on advertising,” said a former employee.

It’s not uncommon for companies to change their investment priorities over time as markets and revenues change.

The first major investments in algal biofuel research came in the 1970s, when oil supplies were constrained thanks to the Opec embargo on the United States, and all major oil companies were investing funds in alternative fuels and renewable energy technologies. At the time, Exxon was investing in everything from solar and nuclear power to lithium batteries and climate change research. When the oil market bottomed out in the 1980s, all that stopped.

Similarly, oil majors BP, Shell, Chevron and ExxonMobil have championed algae since 2008, announcing hundreds of millions of dollars in research funding. Then, in 2015, the fracking boom went bust, and one by one they failed. Some, like Shell, continued to invest heavily in biofuels, but only Exxon stuck with algae.

Today, aside from Exxon’s withdrawal, there are other reasons to question the promise of algae.

Related: Hemp: the green crop tied down by bureaucracy in the US

The algae boom came at a time in the early 2000s when it seemed like the world might still have to run on some sort of liquid fuel, said Matthew Posewitz of the Colorado School of Mines and National Renewable Energy Laboratory. Posewitz’s algae lab was funded by Exxon for eight years. “Now there’s another transition — a lot of ground transportation is going to be electrified, and you might not need liquid fuels there, which means a smaller market, basically just jets and boats.”

Posewitz praised Exxon as a very dedicated partner. “They pay attention to the data and influence research directions and educate academics about market needs,” Posewitz said. “And that’s what you want. Sometimes academics can go in a direction that doesn’t meet a market need.”

All of the researchers who spoke to the Guardian agreed that making algal fuels a success would require a longer runway and billions of dollars in funding — closer to what oil companies spend on fossil fuels.

“It was great while Exxon was interested, but in the end it’s going to take more time and investment to mature this from a fuel perspective and they have different priorities,” Posewitz said.

Leave a Reply

Your email address will not be published. Required fields are marked *