Calysta’s Pivot: Another Green Energy Startup Demotes Fuel Projects

Xconomy San Francisco — 

The pioneers of synthetic biology in the early 2000s held out an enticing vision of cutting-edge technology that would churn out renewable fuels made from plant sugars rather than petroleum. They bioengineered microbes such as yeast to eat the sugar and make the chemical building blocks of gasoline or other fuels. However, those early companies found that the high cost of sugar made it hard to compete with the entrenched fossil fuel industry.

Menlo Park, CA-based Calysta Energy, founded in 2011, was part of a second wave of companies that thought they had the solution to that problem. Rather than using sugar as a raw material, they planned to tap into the newly cheap supply of natural gas. A major component of natural gas is methane, and certain naturally occurring bacteria can feed off it. Calysta re-engineered genetic pathways in those bacteria, maximizing their enzymatic pathways to convert gaseous methane into liquid hydrocarbons—raw materials for the production of liquid fuels that are easy to transport.

But Calysta, like other members of synthetic biology’s second wave, is now moving away from its fuel focus to pursue other products that sell for higher prices. In this, they’re following a strategy that their green energy forerunners evolved: developing new methods of manufacturing industrial chemicals. Biofuels pioneer Amyris of Emeryville, CA, founded in 2003, has branched out into industrial lubricants, fragrances, and cosmetic ingredients. Calysta’s major projects now focus on the production of plastics and fish food.

“What’s happening at Calysta is indicative of what’s happening across the advanced biofuels space,” says Mackinnon Lawrence, research director at Navigant Research, which tracks the energy and chemicals industries.

Investors see gas-to-liquid biofuels plants as risky projects to fund, even though a methane feedstock may turn out to be less expensive than sugar, Lawrence says. Most of these new plants are starting at a small scale, he says. In the past five years, many startups that originally intended to make biofuels, like Calysta, have shifted toward higher-priced products, Lawrence says.

In May, Calysta Energy changed its name to Calysta to reflect its changing priorities. The pivot started in earnest in June 2013, when Calysta signed a research collaboration deal with NatureWorks of Minnetonka, MN, which makes plastic resins that can be molded into products.

NatureWorks signed that deal with the goal of breaking its own dependence on sugar, which is currently the sole feedstock for production of its plastic, Ingeo. The company uses microbes engineered to eat a form of sugar from cornstarch, and then to produce lactic acid, a subunit which is joined together to form long chains of plastic polymer.

NatureWorks sells Ingeo to companies that make all manner of products, from Dannon yogurt containers to blankets, from Coca-Cola cups to prototypes cranked out by 3-D printers. NatureWorks is owned by two parent companies: Minneapolis, MN-based Cargill, an international agricultural and industrial giant, and chemical company PTT Chemical of Bangkok, Thailand.

Calysta announced recently it had accomplished its first task under the NatureWorks partnership—to create methane-eating bacteria that could manufacture lactic acid. The two companies are betting that methane will remain a less costly raw material for plastic production than sugar. “Methane is cheap and abundant in the United States,” says Josh Silverman, chief technology officer and co-founder of Calysta.

Steve Davies, communications director for NatureWorks, says Calysta beat the target date to engineer the new bacteria.

“It’s the key first step,” Davies says. “But it’s still early days.” Calysta will need to scale up production to show that the technology can work efficiently in a commercial operation, he says. Meeting all goals of the partnership could take five years, Davies says. That jibes with the estimated timeline when the collaboration was announced last year.

Calysta’s scientists are now tweaking the bioengineered bacteria to increase the yield of lactic acid, Silverman says. “We believe it’s going to be economic,” he says.

If Calysta succeeds, NatureWorks would most likely license the technology and build its own plant—or retrofit an existing one—to use methane as a feedstock, Davies says. Though NatureWorks could simply tap into a natural gas pipeline, it might pursue an early idea of Calysta’s that could bring additional cost savings: capturing the waste methane gas that now wafts out of sites such as landfills and industrial farms. The companies operating those sites might be eager to sell that captured gas at low rates, Calysta has speculated, because they might otherwise face government penalties for allowing methane, a potent greenhouse gas, to escape into the air and contribute to global warming.

One possible provider of that captured gas is … Next Page »

Single PageCurrently on Page: 1 2

By posting a comment, you agree to our terms and conditions.

One response to “Calysta’s Pivot: Another Green Energy Startup Demotes Fuel Projects”

  1. Cl1ffClav3n says:

    Amazingly, the PhDs on these projects are so narrowly specialized they don’t understand the macro view of thermodynamics and realize what they are doing has a negative energy balance. That’s an impossible position from which to create an energy source or economic fuel. Alan Shaw should have known better after wasting $375 million of Shell money at Codexis before bailing out of cellulosic biofuels and into methane biofuels at Calysta. Solazyme still claim to be working on fuel “components” even though the cheapest they ever sold their algae biofuel was $61.33 per gallon. For a thorough but readable walk through all the issues that doom biofuels, take a look at this Canadian paper by a U.S. Navy officer