The Road Not Taken and Genomatica’s Renewable Chemicals Strategy

Genomatica, Versalis, Novamont, Industrial Biotech, Renewable Chemicals,

A few weeks ago, BP cancelled a $350 million project in Highlands County, FL, that was supposed to produce 36 million gallons of ethanol a year from “energy grasses” and other high-cellulose plants. In a statement at the time, the global energy conglomerate said it was refocusing its U.S. biofuels strategy on research and development—and on licensing its advanced biofuels technology.

Thus ended an ambitious effort that began with much optimism five years ago when BP disclosed a strategic partnership with Verenium (Nasdaq: [[ticker:VRNM]]), the industrial biotechnology company now based in San Diego.

“Everybody was doing advanced biofuels back then,” recalls Christophe Schilling, the CEO and co-founder of Genomatica, another San Diego industrial biotech. Crude oil prices soared to record highs in 2008, and rampant oil speculation dominated futures trading on the New York Mercantile Exchange. “There was high interest in biofuels in terms of energy security,” Schilling says. “We had this major issue.”

It was about that same time that Genomatica developed the strategy it has been following for the past five years—using the tools of biotechnology to genetically engineer bacteria to manufacture intermediate chemicals like 1,4-butanediol (BDO) in fermentation-based manufacturing processes. BDO is a high-value chemical, usually produced from crude oil, and an essential ingredient needed to make polyesters, polyurethanes, spandex, and biodegradable plastics.

For Genomatica, biofuels represents the road not taken, and that has made all the difference.

I recently met with Schilling and Genomatica CFO Michael Keane, and the outlook they describe sounds decidedly more upbeat than the anguished laments coming out of

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.