Spurred by the long-term prospects of cheap and abundant supplies of natural gas, Siluria, an early-stage San Francisco startup, has received $20 million in new funding to invent technology to convert methane—the main component of natural gas—into ethylene, a feedstock that is used in much of the world’s chemical production. If Siluria is successful—the technology is still confined to laboratory testing—it could transform the economics of producing various chemicals and plastics, and even fuels.

The new investment, led by Wellcome Trust, reflects hopes that the company, which previously had raised $13.3 million from a number of leading venture capital firms, can solve a problem that has outwitted researchers and chemical companies for decades: finding catalysts that will selectively get methane to react with oxygen to make ethylene. Using recently developed nanotechnology tools and rapidly screening techniques, Siluria says it has invented several groups of catalysts that seem to work, at least in the lab, and is optimizing those catalysts while it continues to search for additional ones. It plans to begin testing the catalysts in a pilot system next year.

The commercial logic of the plan is simple. The United States is awash with cheap gas. Meanwhile, ethylene, the world’s highest volume commodity chemical with a value of some $160 billion a year, is made from petroleum using “steam cracking” in which the long-chain hydrocarbons are thermally broken down—or cracked. Natural gas is far cheaper than oil, and, especially with the recent exploitation of shale deposits in the United States and elsewhere, the supplies of it are projected to last for decades. Thus, making ethylene from natural gas would not only provide a far cheaper route to various petrochemicals and even fuels, it could provide natural gas producers with a valuable outlet for their products, while reducing dependence on petroleum.

It is possible to use a catalytic process developed by German researchers nearly a century ago called Fischer Tropsch to turn methane into carbon monoxide and water, and then convert the so-called syngas to liquid chemicals. The process, however, requires high temperature and pressures, making it expensive to build and operate—and it produces a wide variety of compounds, including ones far less valuable than ethylene. Using a modified version of the Fischer Tropsch technology, Shell is building a roughly $20 billion gas-to-liquids facility in Qatar that will make various compounds from that country’s vast supplies of natural gas.

The chemistry for directly making ethylene from methane has eluded researchers in part because of the difficulty of getting the reaction to stop at ethylene, and not produce carbon dioxide. Siluria believes it can overcome the challenge because of the availability of new chemical discovery-and-synthesis tools. Top among these is the use of virus-based templates, a technology developed by Angela Belcher, a professor at MIT and member of Siluria’s board of directors, that guides the growth of nanowire catalysts made of inorganic crystals. After the template is burned away, the researchers are left with structure of the inorganic material with a high surface area—perfect candidates for high catalytic activity. They then use high-throughput screening methods to rapidly try and find any of the nanowire structures with the desirable catalytic activities.

Siluria says it has received the additional investment because it now has multiple catalysts that work in a “commercially viable realm” of relatively low temperatures and pressures. Erik Scher, Siluria’s vice president of R&D, says the company’s candidate catalysts will work with conventional types of reactors and reactor designs, providing manufacturers “with a minimal risk of scale-up. They won’t have to invent new types of reactors.”