An Amyris demonstration facility in Brazil. Credit: Noah Friedman-Rudovsky.

[See update below.]

In its early years, biotech company Amyris described itself as a start-up “applying its proprietary breakthrough technologies to address major global health and energy challenges.” 

Its originally planned to make an anti-malaria drug, as well as renewable diesel and jet fuel, by feeding sugar to genetically-engineered microorganisms. Having spun off the anti-malaria technology to another company in 2008, yesterday Amyris said it’s giving up making fuels too. Instead, it will to focus on higher value products, such as moisturizers for cosmetics.  

The company learned firsthand just how difficult it is to achieve the kind of yields seen in lab tests in large-scale production. In an update call for investors, CEO John Melo said he is “humbled by the lessons we have learned.”

This is a common theme for advanced biofuels companies. Range Fuels, one of the first of the current crop of companies, recently went out of business. Others are giving up on making biofuels too, also hoping to break into markets for higher value chemicals. Although they may be able to get more money per liter of product, some experts warn that these markets are also highly competitive.

Amyris’s technology may still be used to make renewable fuels, but this will happen not at Amyris, but under joint ventures established with Total and Cosan. These ventures will need to build up their own production capacity, Melo told analysts.

On the same call, Melo told investors not to expect the company to produce as much product as it had previously promised. Amyris had said that in 2012 it would produce 40 to 50 million liters of farnesene, a fragrant oil that can be used for making various products including diesel. Melo said Amyris would stop making predictions about its production levels, turning its attention away from ramping up production and toward achieving consistent yields. He also said Amyris is indefinitely delaying plans for one of two large production facilities it was to have built this year. 

Not all biofuels companies are backing off from biofuels though. Mascoma, which has developed a process for making ethanol from cellulosic sources such as wood chips, announced in December that it had fully funded the construction of a cellulosic ethanol plant. Construction is expected to begin within a few months, to be completed by the end of 2013.

Update, 2/14/2012 :

Amyris wants to make clear that it isn’t giving up on its current, relatively small scale, biofuel production. Some of the farnesene Amyris makes is being used to make diesel fuel for buses in Brazil, and Amyris will continue to make farnesene for fuel until the joint ventures are up and running, says Joel Velasco, senior vice president for external relations. As Amyris adds more farnesene capacity this year, some of that, too, could be used for the production of fuel, he says.

While Amyris doesn’t disclose precisely how much fuel is made from its farnesene, based on the number of buses it supplies, Amyris seems to be making a few hundred thousand liters of fuel per year. Commercial fuel production, to make economic sense, typically needs to be on a much larger scale—hundreds of millions of liters per year.

Amyris had generated excitement in recent months when it announced would produce 40 to 50 million liters of farnesene in 2012, and build two plants with a total capacity of 150 million liters. Although Amyris had made clear that not all of the production would go to biofuels, the plants were some rare positive news in the advanced biofuels industry, which has been plagued by bankruptcies and delays.

But now Amyris has given up on its 40 to 50 million liter prediction, and indefinitely delayed construction on the larger of the two plants it had planned. Large scale biofuels production awaits construction of facilities by the joint venture companies. That construction seems unlikely to happen in the near term in light of the difficulties Amyris is having in achieving its announced goals this year. The promise of large scale biofuels is still some time off. 

A Fiat Multipla Bi-power car being refueled. Credit: Andreas Geick

America’s presidents can’t make up their minds about how to reduce dependence on oil imports.

President Bush was a enthusiastic support of fuel cells, until he was an enthusiastic supporter of ethanol made from switchgrass. President Obama has come out strong for biofuels and electric cars, but he didn’t mention those in his State of the Union address this week. Now he wants researchers to invent new ways to use natural gas to power vehicles.

The hope is to create a market for natural gas, which is pouring from the ground in record amounts in the United States, and in turn driving down natural gas prices to levels not seen for 10 years. 

It’s easy to use natural gas in internal combustion engines, but it’s hard to store much of it on board a car, so natural gas vehicles typically have a much shorter range than gasoline powered ones. The White House announced today that the Advanced Research Projects Agency for Energy (ARPA-E) will announce a research competition for either improving natural gas powered vehicles, or developing a cheaper way to turn the gas into an energy dense liquid fuel. (The announcement referred to ARPA-E’s previous funding rounds as “competitions,” so it’s likely this will just be another funding round, not something like the DARPA challenge competition to develop autonomous vehicles.)

The White House also announced a plan to encourage the use of natural gas in trucks: 

Reducing our dependence on oil by encouraging greater use of natural gas in transportation: The President’s plan includes: proposing new incentives for medium- and heavy-duty trucks that run on natural gas or other alternative fuels; launching a competitive grant program to support communities to overcome the barriers to natural gas vehicle deployment; developing transportation corridors that allow trucks fueled by liquefied natural gas to transport goods; and supporting programs to convert municipal buses and trucks to run on natural gas and to find new ways to convert and store natural gas.

Will natural gas transportation prove a fad? Unlike fuel cells, advanced biofuels, and electric cars, natural gas vehicles are already sold in large numbers, particularly outside of the United States. In the long term, especially if natural gas remains cheap, they will find a market in the U.S., too. But if political support for it depends on quick and widespread adoption, or on breakthroughs in turning the gas into liquid fuel, the support won't last, and we can look for some other transportation solution to be highlighted in the next State of the Union speech. 

Credit: Whitehouse.gov, Pete Souza

President Obama seems to have a newfound love of oil.

In his State of the Union Address last night, he emphasized the development of domestic energy supplies, particularly oil and natural gas, but also solar and wind power. 

Although he called on Congress to pass legislation creating a clean energy standard, as he did last year, it was clear that he's focusing on supporting clean energy by doing things within his administration that don't require Congressional support.  

Last year Obama mentioned the word "oil" twice, the first time to call for the United States to end its dependence on it, and the second time to call for funding clean energy development by decreasing tax breaks for oil companies.

This year he mentioned oil nine times (10 if you include a reference to a regulation that categorized cow milk as an oil). Gone was any sense that oil was an addiction, as his predecessor George Bush had called it, or something the United States had to reduce its dependence on. He praised the fact that the U.S. produced more oil last year than it had for eight years, and he said that he is opening more areas for offshore drilling. When he called for the development of alternatives to oil, his reason was that we just don't have enough of it in the United States. 

Although Obama sounded supportive of oil, he did call for an end to subsidies for oil companies and for Congress to "double down" incentives for clean energy. He also said he would continue efforts to make sure oil companies can contain oil spills like the one in the Gulf of Mexico. 

Last year, Obama said that U.S. oil dependency could be broken by turning to biofuels and electric vehicles. He didn't mention either this year. This is in spite of the fact that progress has been made on both fronts. 

Last year was the first full year of sales for new electric cars from GM and Nissan, and several more automakers will start selling electric vehicles this year. The first commercial cellulosic ethanol plants could also start operation this year. Sales of electric vehicles, however, have been slower than expected. And, by now, cellulosic ethanol plants were supposed to have been making hundreds of millions of gallons of ethanol, according to a federal mandate.

While Obama didn't mention electric vehicles, he did talk about high-tech batteries, saying that the U.S. is "positioned" to become the leading manufacturer of these batteries. Presumably, he's referring to electric car batteries and the large factories for making them that the government has subsized. The U.S. certainly is building a lot of battery factories. But it will be difficult for a new U.S. battery industry to compete with the established battery industry in Asia, and in any case, the success of the new factories will largely depend upon sales of electric vehicles increasing dramatically.

If Obama's biggest emphasis last year was on biofuels and electric cars, this year it was on natural gas. He praised domestic natural gas as a resource that is both clean and cheap, and he said that exploiting it could employ 600,000 jobs by 2020. He didn't say how many of those would be new jobs.

Although Obama praised natural gas, he didn't mention any specific support for the industry. Indeed, his only pledge was that he would regulate it, requiring companies to disclose the chemicals they use in the fracking process for extracting natural gas from shale.

Some support for natural gas could come from the clean energy standard—in lieu of a cap and trade system for reducing carbon dioxide emissions—that Obama asked Congress to pass last year, and again this year. The standards would have supported natural gas over coal, since burning it emits about half the carbon dioxide emissions as coal. 

Although Obama mentioned the clean energy standard, that's not really where he focused his attention last year. Instead, he's been working to push forward clean energy by means that don't require Congressional approval, such as new EPA limits on power plant pollution and tougher fuel economy standards. He spoke of working without the support of Congress in his speech, declaring that his administration would allow more construction of clean energy on federal lands, and that the U.S. Department of Defense would increase its use of clean energy sources. Expect Obama to continue this strategy, especially in an election year, when Congress is expected to get even less done.