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By Bob Blandeburgo
Exxon Mobil Corp. (NYSE: XOM) will dip its toes into the renewable energy pond - with a focus on the scum that resides in it.
The oil giant is looking to spend more than $600 million on the research and development (R&D) of next generation biofuels from photosynthetic algae in an alliance with privately held Synthetic Genomics Inc (SGI), which was founded by genome map pioneer J. Craig Venter.
"This investment comes after several years of planning and study and is an important addition to ExxonMobil's ongoing efforts to advance breakthrough technologies to help meet the world's energy challenges," said Emil Jacobs, vice president of research and development at ExxonMobil Research and Engineering Company. "We believe that biofuel produced by algae could be a meaningful part of the solution in the future if our efforts result in an economically viable, low net carbon emission transportation fuel."
Under the program, if research and development milestones are successfully met, ExxonMobil expects to spend more than $600 million, which includes $300 million in internal costs and potentially more than $300 million to SGI.
"While significant work and years of research and development still must be completed, if successful, algae-based fuels could help meet the world's growing demand for transportation fuel while reducing greenhouse gas emissions," said Michael Dolan, senior vice president of ExxonMobil. "Our new algae biofuels program complements ExxonMobil's ongoing efforts to reduce emissions in our operations and by consumers of our products, through both efficiency improvements and technology breakthroughs."
Exxon Mobil's collaboration with SGI will last between five and six years and will involve the creation of a new test facility in San Diego to study algae-growing methods and oil extraction techniques. After that, he said the company could invest billions of dollars more to scale up the technology and bring it to commercial production.
Neither company is making guarantees.
"We're not claiming to know all the answers," said Venter. "There are different approaches to what is truly economically scalable, so we're testing things and giving a new reality to the timelines and expectations of what it takes to have a global impact on fuel supply."
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