By the end of 2018, Intrexon is guiding the market that it will have successfully commercialized a technology to convert methane, or the primary component of natural gas, into isobutanol, a liquid fuel with a density far closer to gasoline than ethanol.<\/p>\n
There has been substantial doubt raised, especially in The Motley Fool, regarding Intrexon\u2019s chances of overcoming the technical hurdles. Some of which we covered here.<\/p>\n
Looking at the chemistry of value
\nWho\u2019s right? Let\u2019s turn to our resident expert, Dr. Brian Westlake, who joined us from Sydney to \u201cknock more sense into The Digest\u2019s head\u201d.<\/p>\n
\u201cMate, saw your Intrexon coverage,\u201d Brian said. \u201cBut you could make it simpler, cobber. You just look at the biochemical stoichiometry.\u201d<\/p>\n
The what?<\/p>\n
Er, what\u2019s stoichiometry?
\n\u201cThat\u2019s right, you\u2019re an English major. Well, consider it a balance sheet for a chemical reaction. You add up what you started with, and what you ended up with \u2014 atom by atom and all the heat energy \u2014 and you balance it.\u00a0For example, this is how your own body converts a bit of sugar into energy.\u201d<\/p>\n
C6H12O6 + 6 O2\u00a0 \u00a0 \u00a0 \u00a0 \u2014>\u00a0 6 CO2\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0+ 6 H2O \u00a0 \u00a0 + 2803 kJ<\/p>\n
Sugar \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Oxygen \u00a0 \u00a0 \u00a0 \u00a0 Carbon dioxide \u00a0 water \u00a0 \u00a0 \u00a0 heat<\/p>\n
\u201cI\u2019ve filled in the names of the molecules below to make it easier for you. See how the atoms balance on either side? Basically, your body takes in sugar, and some oxygen. So take a breath, matey. Then, you exhale six carbon dioxides, and you\u2019re left with six parts water and a whole bunch of heat. That\u2019s, simply put, how the body runs.<\/p>\n
Now, there\u2019s a far more interesting reaction to me, as a ridgy-didge Australian, and that\u2019s making beer. You\u2019d call it making ethanol.\u201d<\/p>\n
C6H12O6 \u00a0 \u00a0 \u00a0 \u2014>\u00a0 2 C2H6O \u00a0 \u00a0 \u00a0 + 2 CO2\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 + 69 kJ<\/p>\n
Sugar \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Ethanol \u00a0 \u00a0 \u00a0 \u00a0Carbon dioxide \u00a0 \u00a0 \u00a0heat<\/p>\n
\u201cYou start with a sugar molecule, which you\u2019ll get from corn. And you make two ethanol molecules and two carbon dioxides. Not much heat released there, right?\u201d<\/p>\n
Right, I said.<\/p>\n
\u201cTwo things you\u2019ll note right away. If you add up the molecular weights, you\u2019ll see that the ethanol, has only half the weight but retains 97.5% of the energy. Just that little bit leaks out in heat. It\u2019s not as energy dense as petroleum, but much better than table sugar. Beauty, ay?\u201d<\/p>\n
Beauty, I agreed. So, we\u2019re done?<\/p>\n
\u201cJust a bit more about cooling and absorption rates.\u201d<\/p>\n
Okay.<\/p>\n
\u201cRighto. With these reactions, you do build up heat; not much at first, but you have to remove it, otherwise you kill off the organism. So you contact the broth with a coolant. Like engine coolant. Could be a cooling jacket around the fermentor, or a cooling pipe inside it, or you can pump the broth to an external heat exchanger.\u201d<\/p>\n
Got it.<\/p>\n
\u201cAnd, there\u2019s the problem of mass transfer, which that Motley Fool article was all over. A liquid solution can only hold so much carbon dioxide, to use an example, as you\u2019ve probably noticed when you open a champagne bottle and all that excess CO2 blows the cork into outer space.\u201d<\/p>\n
\u201cThat\u2019s right,\u201d I said.<\/p>\n
\u201cChampagne does that because finally there\u2019s so much CO2 that it can\u2019t stay dissolved in the liquid and it creates gas pressure in the bottle. And it\u2019s the same with methane and water. You can only get so much methane into a water solution.<\/p>\n
\u201cSo, you\u2019ve got yer free briefing. Now, let me get back to the footy, mate.\u201d<\/p>\n
Looking at isobutanol
\nIn his own Australo-Socratic way, Dr. Westlake\u00a0gave us most of what we needed, to make sense as investors or bioeconomy stakeholders of what Intrexon is up to, and why there are risks, and how to measure those risks and thereby decide the extent to which we want to bet on that team of technologists.<\/p>\n
Let\u2019s look at making isobutanol from sugar. That\u2019s what Gevo does.<\/p>\n
C6H12O6\u00a0 \u00a0 \u00a0 \u00a0 \u2014>\u00a0 C4H10O\u00a0 \u00a0 \u00a0 \u00a0 +\u00a0 2 CO2 + \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0H2O \u00a0 \u00a0 + 140kJ<\/p>\n
Sugar \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0Isobutanol\u00a0 \u00a0 \u00a0 \u00a0Carbon dioxide water \u00a0 \u00a0 \u00a0 heat<\/p>\n
One mole of sugar (in this case glucose) gives us one mole of isobutanol, two carbon dioxides and one water. The total heat produced is 140 kiloloules, so we lose about 5% of the heat energy of glucose. The theoretical efficiency is 41% It\u2019s not radically different, chemically, from glucose except that we get one butanol instead of two ethanols, and we get water.<\/p>\n
Obviously, the issue is the high cost of glucose. The good news is that there\u2019s no oxygen consumption and there\u2019s very little heat generated.<\/p>\n
Making isobutanol from methane
\nNow, let\u2019s look at Intrexon, which is making isobutanol from methane.<\/p>\n
6 CH4\u00a0 \u00a0 \u00a0 + 6 O2\u00a0 \u00a0 \u00a0 \u00a0 \u2014>\u00a0 C4H10O\u00a0 \u00a0 \u00a0 \u00a0 +\u00a0 2 CO2 + \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 7 H2O \u00a0 \u00a0 + 2672 kJ<\/p>\n
Methane Oxygen \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0Isobutanol\u00a0 \u00a0 \u00a0 Carbon dioxide water \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 heat<\/p>\n
Overall, you get a theoretical yield of 77%, or almost double the yield from glucose. Put that together with the high cost of glucose vs cheap natural gas, and clearly there is a huge feedstock advantage.<\/p>\n
And people are standing on mountaintops and calling out attention to that huge advantage. And it\u2019s real.<\/p>\n
However, there are some interesting things to see. First, as The Motley Fool noted in its review, it\u2019s going to take some effort to transfer methane into solution, and that effort has some significant cost associated with it. Problem or no problem? As Intrexon SVP Bob Walsh told The Digest, \u201cwe are not mass transfer limited.\u201d<\/p>\n
But as the purveyors of Ginsu knives assure us: Wait, there\u2019s more.<\/p>\n
The Oxygen problem
\nThere\u2019s a company working on methane conversion, not Intrexon, that has a slide proclaiming that \u201coxygen is free\u201d.<\/p>\n
Well, oxygen is not free, the experts tell us. It has to be delivered, it has to be compressed. And sure, there\u2019s free atmospheric oxygen feedstock for that, but more scientists than not currently believe that the most efficient approach is, rather, the use of pure oxygen, instead of free oxygen mixed with 78% nitrogen.<\/p>\n
Now, Praxair or others will happily build you an oxygen plant to generate and transfer oxygen. But at a cost, and a significant cost. And industry pros tell us that, just as there are issues with getting methane into solution, oxygen has, roughly speaking, the same problem. And for every ton of isobutanol produced, someone\u2019s got to produce and pump in 2.6 tons of oxygen. And only 8% of that oxygen goes into the product, 92% goes into CO2 and water.<\/p>\n
And, as the safety officer will doubtless remind you and reminded the Digest, combining methane and oxygen comes with safety issues relating to combustion. Remember, methane over 15% concentration is highly explosive when mixed with oxygen.\u00a0 It\u2019s an everyday issue in some chemical settings, but it is\u00a0something that has to be planned for and paid for \u2014 keeping away from explosive gas formation levels. Could be blanketing the head space of the fermentor with nitrogen, could be something else. It\u2019s manageable, but the cost to address is not zero.<\/p>\n
So, oxygen is not free, it\u2019s a feedstock with significant costs. Something that Intrexon has doubtless modeled out and allowed for, but something to make sure you understand as you measure the risks against the rewards of investment.<\/p>\n
The solubility problem
\nThe problems that The Motley Fool raised and Dr. Westlake confirmed on solubility \u2014 how much methane can you stuff in there. Well, there are mitigations, too. We\u2019ve been hearing from our science pals that there is promising work with microbubbles.<\/p>\n
We remember this from our desultory hours spent ignoring our calculus professor. The ratio of surface area to volume increases as the size of the gas bubble shrinks. More surface area, more interaction between the liquid medium and the gas. Faster conversion.<\/p>\n
One of these days, someone may invent a bubble that doesn\u2019t resolve automatically into the shape of a sphere. That would shake things up considerably, as spheres have lousy surface area to volume ratios. One of the reasons that highly porous materials like zeolite can make excellent inorganic catalysts. Huge surface areas relative to volume.<\/p>\n
The heat problem
\nWe\u2019ve mentioned heat. Our equation above tells us that the methane to isobutanol pathway is generating a lot of heat. Not insurmountable, but it\u2019s 20 times the heat generated in the sugar to isobutanol process.<\/p>\n
Bottom line whatever Gevo is installing to deal with heat, Intrexon will need 20 of them. Heat exchangers cost money. Maybe not much in the grand scheme of things, but 20X is a big jump. A cooling tower? 20 times as much capacity. It\u2019s something to look at and understand.<\/p>\n
The keeping the microbe alive problem
\nHere\u2019s another thing experts warn us to consider. The microbes that are being developed are methanotrophs. Generally speaking, they convert methane to methanol, then to formaldehyde, and now they been engineered to make isobutanol. The trouble is, methanol and formaldehyde are toxic. If you get incomplete conversion \u2014 and you always get incomplete conversion, we\u2019re told, eventually the methanol and formaldehyde levels start to build up. And the microbes keel over and die on you. All those highly engineered microbial bioconversion factories. All that money. Gone.<\/p>\n
It\u2019s not a new problem in fermentation. Generally, we\u2019ve been advised, the solution is to have a mixed culture, and include some microorganisms that scavenge fugitive methanol or formaldehyde. But when you have other bugs in the system consuming feedstock, they can affect yield.<\/p>\n
One other thing we hear about. Methanotrophs are prone to bacterial infections. Just like we are. What do we do to avoid infections? We spray our world with Lysol and take other steps to protect ourselves. Microbes, the more you want to keep them healthy, the more you might want to consider aseptic conditions and avoid the problem. But, costs are much higher.<\/p>\n
Some people say that the Norferm plant is proof that you can be successful without designing for a costly aseptic environment. But two engineers from the old Norferm plant said that \u201ccontamination was a big problem\u201d.<\/p>\n
Something to watch at scale.<\/p>\n
Keeping the microbe population focused
\nOne other thing. Not all microbes, we\u2019re told, are exactly alike. As they re-double and grow and grab feedstock and make isbutanol bioconversions for us, sometimes we get slightly different microbes that have evolutionary advantages, but make slightly less isobutanol, and they end up taking over the broth. It will cost money to manage and watch for this problem, and to mitigate it when the problem arises.<\/p>\n
It\u2019s not a fatal problem, it\u2019s just a case of checking the math to make sure that it has been allowed for.<\/p>\n
The Bottom Line
\nLots of factors to consider. Have Intrexon addressed them all? They may have. They may think they have. The deployment of industrial biotechnology at scale suggests that it is a complex science, with many factors at play, and before bold confidence is achieved, bold questions need to be asked.<\/p>\n
It\u2019s 10 o\u2019clock. Do you know how your microbe is?
\nSeek and ye shall find. Investors have the right to ask questions so that the real risks can be measured. Great companies welcome the opportunity to demonstrate how robustly they have considered, allowed for and mitigated the risks.<\/p>\n","protected":false},"excerpt":{"rendered":"
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