PROJECT EASY GREEN

Microorganisms can work chemical wonders, turning forest waste into fuel.

Unfortunately, they also aren't very fast.

Rice University researchers have come up with a way to cure this persistent problem that, if put into practice, could dramatically lower the price and increase the volume of biofuel production. The new technique essentially would allow genetically modified organisms to generate fuel up to ten times faster than the GMO cousins do it now. Put another way, a 30 million gallon a year plant could conceivably become a 300 million gallon a year plant.

The first commercial application could be the production of a renewable form of butanol, used as jet fuel.

The organisms also feed on glucose and mineral salts, some of the cheapest feedstocks around, rather than designer sugars, says Ramon Gonzalez, an associate professor of biomolecular engineering at the university.

Here's how it works. Most biofuel/biochem companies focus their efforts on optimizing the segment of the metabolic process responsible for creating fatty acids. Complex fatty acids, however, aren't easy to make and many companies have struggled with trying to engineer microorganisms that can make acids with a specific number of carbon atoms.

Gonzalez and his graduate students focused instead on the beta oxidation cycle that occurs during metabolism. "Metabolism" itself is a catch-all phrase that includes processes for breaking down molecules as well as processes for building new ones. Beta oxidation is used to break down substances: think of it as cellular-level digestion. Nearly every living thing, from yeast to humans to fish, employs beta oxidation. Roughly speaking, the process strips carbon atoms, two at a time, off of fatty acids. These two-carbon then become Lego-like building blocks for new acids.

The Rice team reversed the process so that beta oxidation adds two carbon atoms. It only required manipulating around  twelve genes.

Elegant, no?

The process was tested on a genetically modified strain of E. Coli, the workhorse of the microbiology world, but it should work in yeast, the microbe of choice for many biofuel companies.

Although oil has dropped in recent weeks, interest in biofuels has been rising over the past year amid worries about increased consumption in China, long-term price hikes and peak oil. Solazyme (optimized algae), Gevo (isobutanol from GMOs) and  Amyris (a bug that can convert sugar into a 15-carbon hydrocarbon) have all held IPOs.

It will likely take years until new generation of microbe fuels hit the market in appreciable volumes and it will no doubt take the cooperation of industrial giants. But interest among the incumbents is growing. Cargill is one of the principle partners of Gevo and Solazyme  with the U.S. Navy, Chevron and Bunge.

Solazyme, which turns algae into fuel and chemicals, has signed a deal with Bunge Global Innovation, a subsidiary of agribusiness giant Bunge, to build a facility in Brazil to convert microbes and sugarcane juice into industrial chemicals.

The plant, to be built at one of Bunge's existing sites, will churn out 100,000 metric tons of triglyceride oils a year. The plant should begin operations in 2013 in time for that year's harvest. Solazyme just recently announced a 1,500-ton plant in Peoria, Illinois that will become fully operational in the first half of 2012. While the Peoria plant will be doubled in size in around a year, the Bunge deal will dramatically increase the company's production potential.

Solazyme, which held a public offering earlier this year, grows algae by feeding it sugar in fermentation tanks. The sugar has always been a sticking point for some because sugar means added costs. Many algae companies claim they will be able to grow algae by feeding the single-cell bugs a steady diet of free sunlight and carbon dioxide. The photosynthetic method, however, requires producers to extract their algae from water, a thorny and expensive challenge that has vexed researchers since the late '70s when industrial algae research began. Solazyme doesn't have to worry about water, but it does need to keep a tight lid on sugar costs.

In the Brazilian plant, Solazyme will feed sugar cane thick juice to algae and produce oils on-site. The thick juice is the first, unrefined fluid that comes out of the crush. A large number of companies are trying to produce alcohol and other chemicals out of the woody bits. Sugar from waste would likely be cheaper, but again it also represents a challenge on a large, industrial scale at the moment.

Algae oils can be used in a wide variety of products. The company currently produces algae-based jet fuel for the U.S. Navy — 283,000 gallons have been shipped so far under two separate R&D contracts. It also sells an anti-aging cream called Algenist. Sephora and The Shopping Channel have agreed to distribute it. (That's algae milk in the picture.)

Ultimately, as the cost of producing oil from algae comes down, Solazyme will sell a renewable form of diesel for the fuel market. 

In the second quarter, Solayzme reported revenue of $7.4 million, up from $4.4 million a year ago, but losses of $17 million. Welcome to the green technology world.

Biofuels appear to be losing their appeal with investors.

Kior, a company that claims it can make a synthetic version of petroleum out of wood and farm waste, sold 10 million shares of stock in an IPO yesterday for $15 a share, lower than the $19 to $21 price it had earlier anticipated.

And today, on the first day of trading, the stock is snoozing at $15.02.

The relatively uneventful IPO can in part be chalked up to the fact that Kior, like other biofuel startups going public, is not profitable and is not yet in commercial production. Kior lost $45.9 million in fiscal 2010.

Add on top of that the recent events in Washington. The U.S. Senate last week voted 72 to 37 to eliminate the 45-cent-per-gallon tax credit on biofuel and the 54-cent-per-gallon tariff on imported ethanol. The Senate action isn't law, but it has received support from both conservative tax groups and environmental organizations. The G-20 is also asking Washington to eliminate biofuel support. Yes, ironies abound. Some conservative groups have opposed eliminating tax credits for fossil fuel companies, despite recent record profits, and the G-20 has rarely met an agricultural price support policy it doesn't like, but such is life.

Biofuel and biochem companies have enjoyed a mini-boomlet until now. Gevo, which makes a renewable form of isobutanol, went public at $15 a share in February and soon rose to $26 a share. Gevo CEO Patrick Gruber told us two months ago that the company planned on expanding production to 350 million gallons by 2015. Gevo just broke ground on an 18-million-gallon facility.

The stock, however, is now back at $15.

Solazyme, which produces chemicals, food additives and fuel from algae, held its IPO in May, selling its shares at $18 each. (Earlier, it had anticipated getting $15 to $17.) The price went up to nearly $21 on the first day of trading, but now hovers at around $20.

Codexis went public at $11 last year and now trades at $9.

Only Amyris, which has a microbe that can convert farm and wood waste into a hydrocarbon called biofene that can be used as an ingredient in a number of substances, has seemingly defied gravity. It went public at $17 last year and is selling for around $29.

For the past few years, VCs and startup execs have said that the biofuel market will start to take off when large, established companies finally decide to commit themselves.

The beginning of that phase may finally be occurring.

Enerkem, which turns municipal garbage into fuels, announced that Waste Management and Valero were part of a $60 million investment round today. Enerkem essentially heats waste, creates a synthetic gas with it, and then converts that gas into a liquid. (That's a diagram of its process in the illustration.)

Also today, Zeachem, which makes cellulosic ethanol in a highly efficient manner from poplar trees or eucalyptus, signed an open-ended development deal with Procter & Gamble.

All three of these large companies have been involved in green chemistry and biofuels for some time. P&G has a strategic development agreement with LS9 while Waste Management — the General Electric of Garbage — has invested in, among others, Genomatica and will work with the startup to develop microbes that can generate fuel from landfills.

Valero, meanwhile, bought ethanol facilities from VeraSun for $500 million back in 2009. It also invested in Algenol, an algae company.

Gevo, Amyris and Solazyme have all successfully held IPOs in the recent past.

But don't get too excited yet. In fuel and chemicals, things take time. Potential buyers test new molecules and manufacturing processes elaborately. So far, only a few of the investments that oil companies have made in startups have panned out. Other than the investments in BrightSource Energy, a solar company, and Solazyme by Chevron's venture group, I can't think of many that have done well. (Side note: Exxon developed the lithium-ion battery in the mid-'70s but dropped it. A few years later, Sony came up with its own and made a multibillion dollar business out of it.)

Gevo, Amyris and Solazyme also all continue to lose money. Gevo and Amyris get most of their current revenue from conventional alternative fuels.

Some of these investments arguably are symbolic commitments. In January, Valero said it might invest up to $50 million in Mascoma, which makes genetically modified organisms that produce fuel from wood waste. The commitment, however, is nonbinding: Valero could end up investing almost nothing in the company.

Valero also backed Proposition 23 in California, which would have rolled back the state's carbon regulations.

Nonetheless, with oil over $100 a barrel, interest in biofuels will likely continue to grow. The last time oil was at this level was 2008: only the economic crash brought the price down. Barring another cataclysm, the lofty price of oil could create a more persistent price floor for the bio industry.

Solazyme–the company that produces oil for cosmetics, industrial equipment and airplanes from genetically modified algae force-fed on sugar–held its IPO today and the results were positive.

The stock climbed above $21 but closed at $20.71 (under the ticker SZYM). Solazyme sold nearly 11 million shares for $18 a share in the IPO. The company was founded and continues to be managed by two college friends, just like Microsoft, Google and Hewlett-Packard.

Here's the story on the IPO details from late last night:

Solazyme will hold its anticipated public offering tomorrow at $18 a share, slightly higher than the earlier estimated price in the range of $15 to $17.

A total of 10.975 million shares will be issued by the company and shareholders. That's almost $198 million.

It's a signature moment for a boomlet in biochemicals and biofuels. The company — which produces algae through a fermentation process — was one of the first to tout the power of algae, which grows faster and produces more oil per acre than corn, soy, rapeseed or other biofuel crops. Advocates say algae is capable of generating 5,000 gallons of oil or more a year per acre, compared to a few hundred at best for other crops.

Chevron, Dow Chemical, Sephora, Quantas, the U.S. Air Force and Unilever are among its strategic partners. Dow, for instance, has signed a deal with the company to develop organisms to produce algae that can make oil for transformers and other grid equipment. Dow may buy up to 20 million gallons in 2013. Investors include Lightspeed Venture Partners, Chevron and VantagePoint Venture Partners.

Like other biofuel/green chemistry companies, Solazyme is currently losing money. It generated revenues of $38 million in 2010 and lost $13.7 million. Still, other biofuel companies like Amyris and Gevo have gone public, quite successfully, while losing money in recent months. Amyris has nearly doubled in price since last year — $100-a-barrel oil does that.

But unlike many other competitors, Solazyme has also made quite a bit of oil. It produced 455 metric tons of oil between January 2010 and February 2011. The production process the company has honed can produce fuel for $3.44 a gallon in a commercial-scale factory, according to Solazyme.

If the IPO succeeds in this frothy market, expect to see Kior, which has the preliminary paperwork for an IPO already, to move toward an offering. Sapphire Energy, which says it will be able to demonstrate its process for making biofuel out of GMO algae grown in ponds in a little over a year, may make fundraising moves as well.

Solazyme does not grow algae through photosynthesis. It has created genetically modified microbes that feed on sugar in large fermenting kettles. When the algae get fat, Solazyme squishes them to extract the oil. Although sugar adds costs, Solazyme does not have to extract algae from water to extract the oil, which is an arduous, expensive process that photosynthesis-based companies face.

Despite the additional cost of the sugar, Solazyme has actually produced far more algae fuel than its competitors. Last year, the U.S. Navy ordered 150,000 gallons of algae-based jet fuel from Solazyme after an earlier trial. 

The company was also one of the first to expand from producing fuel to making food additives, chemicals and cosmetics. In the near term, these markets will likely generate more revenue. (That's algae milk in the photo. It doesn't taste bad.)

Solazyme filed for its IPO back in March.

There's more in the video with founders Jonathan Wolfson and Harrison Dillon.

Solazyme will hold its anticipated public offering tomorrow at $18 a share, slightly higher than the earlier estimated price in the range of $15 to $17.

A total of 10.975 million shares will be issued by the company and shareholders. That's almost $198 million.

It's a signature moment for a boomlet in biochemicals and biofuels. The company — which produces algae through a fermentation process — was one of the first to tout the power of algae, which grows faster and produces more oil per acre than corn, soy, rapeseed or other biofuel crops. Advocates say algae is capable of generating 5,000 gallons of oil or more a year per acre, compared to a few hundred at best for other crops.

Chevron, Dow Chemical, Sephora, Quantas, the U.S. Air Force and Unilever are among its strategic partners. Dow, for instance, has signed a deal with the company to develop organisms to produce algae that can make oil for transformers and other grid equipment. Dow may buy up to 20 million gallons in 2013. Investors include Lightspeed Venture Partners, Chevron and VantagePoint Venture Partners.

Like other biofuel/green chemistry companies, Solazyme is currently losing money. It generated revenues of $38 million in 2010 and lost $13.7 million. Still, other biofuel companies like Amyris and Gevo have gone public, quite successfully, while losing money in recent months. Amyris has nearly doubled in price since last year — $100-a-barrel oil does that.

But unlike many other competitors, Solazyme has also made quite a bit of oil. It produced 455 metric tons of oil between January 2010 and February 2011. The production process the company has honed can produce fuel for $3.44 a gallon in a commercial-scale factory, according to Solazyme.

The company was founded and continues to be managed by two college friends, just like Microsoft, Google and Hewlett-Packard.

If the IPO succeeds in this frothy market, expect to see Kior, which has the preliminary paperwork for an IPO already, to move toward an offering. Sapphire Energy, which says it will be able to demonstrate its process for making biofuel out of GMO algae grown in ponds in a little over a year, may make fundraising moves as well.

Solazyme does not grow algae through photosynthesis. It has created genetically modified microbes that feed on sugar in large fermenting kettles. When the algae get fat, Solazyme squishes them to extract the oil. Although sugar adds costs, Solazyme does not have to extract algae from water to extract the oil, which is an arduous, expensive process that photosynthesis-based companies face.

Despite the additional cost of the sugar, Solazyme has actually produced far more algae fuel than its competitors. Last year, the U.S. Navy ordered 150,000 gallons of algae-based jet fuel from Solazyme after an earlier trial. 

The company was also one of the first to expand from producing fuel to making food additives, chemicals and cosmetics. In the near term, these markets will likely generate more revenue. (That's algae milk in the photo. It doesn't taste bad.)

Solazyme filed for its IPO back in March.

There's more in the video with founders Jonathan Wolfson and Harrison Dillon.

Solazyme, which says it can turn algae into food, industrial chemicals and food, will try to sell almost 10 million shares in an IPO for $15 to $17 per share.

The company has raised approximately $128 million in several rounds. If successful, the IPO would give Solazyme a market cap of around $1 billion.

There's good reason to be hopeful. Solazyme, which grows algae via fermentation in large tanks, has produced more algae fuel than anyone else. It currently is in the second phase of a pilot for developing jet fuel with the U.S. Air Force. Rising fuel prices and tighter CAFE standards also give biofuel companies insulation against a sudden dip in prices. The 2008 economic debacle floored the entire industry after oil prices plummeted.

Solazyme was also one of the first biofuel companies to branch out into food additives and chemicals. Chevron, Dow Chemical and Unilever are among its strategic partners. (That's algae milk, similar to soy milk, in the photo.) The big knock on Solazyme is that it needs to feed algae sugar during the fermentation process. Sugar costs money and cellulosic sugar made from wood chips and waste is yet a large, mutibillion ton industry. The flip side: Solazyme doesn't need to separate its algae from water, a task that felled Greenfuel.

The company was founded and continues to be managed by two college friends, just like Microsoft, Google and Hewlett-Packard.

Both Amyris and Gevo recently pulled off successful IPOs, and both companies, right now, get the vast majority of their revenue from buying and reselling fuel from third parties.

Solazyme reported $37.1 million in revenue in 2010, mostly from its own products and technology. It produced 455 metric tons of oil between January 2010 and February 2011.

The production process the company has honed can produce fuel for $3.44 a gallon in a commercial-scale factory, which, ideally, is a plan that can start to move toward reality after the $100 million IPO. In 2010, net losses came to $16.2 million, but losses have become par for the green-IPO course. 

Both Amyris and Gevo recently pulled off successful IPOs and both companies, right now, get the vast majority of their revenue from buying and reselling fuel from third parties.

Kior, which says it can turn plant matter straight into synthetic petroleum, has also filed an S-1, the necessary first step toward an IPO in the U.S.

Other algae/biofuel names to watch: Sapphire Energy, Aurora, Joule Unlimited, and Cobalt Energy.

Kleiner, Perkins Caufield and Byers joined a second round of financing for Kaiima, which wants to boost biofuel and even food crops by doubling an organism's chromosomes.

Kaiima, based in Israel, raised $18 million in the second round. Earlier investors include Draper, Fisher Jurvetson and Musea Ventures.

The company essentially makes GMO organisms that aren't technically GMOs. The company has devised a technique for multiplying the number of chromosomes in biofuel and other agricultural crops in a way that will increase harvests while at the same time skirting some of the technical and regulatory risks surrounding genetically modified organisms.

The company already sells seeds for castor plants with four sets of identical chromosomes that can produce about 4 to 7 tons of feedstock per acre, or more than double the 1.5 tons associated with naturally occurring castor. The oil can be used for biofuel or bioplastics.

"We want to get to 10," CEO Doron Gal told us in 2009. Besides castor, the company also wants to come out with seeds for canola oil plants and high-yield wheat and rice. It is also working with partners in Mexico on a version of corn. (See earlier feature here.)

These higher-growth plants require more water and absorb more nutrients from the soil than conventional versions of the same plant, but that gets counterbalanced by higher yields, Gal added. In the end, farmers get more oil or food out of a fixed base of resources.

The science behind the company revolves around polyploidy, a condition in which a species has more than one set of chromosomes. Durum wheat, for instance, has four sets of chromosomes (making it a tetraploid), while wheat grown for bread flour has six sets of chromosomes. Polyploids can occur naturally and then spread through selective breeding. Those freakishly large strawberries you see in grocery stores these days? Polyploid varieties.

Although polyploid plants can reproduce and survive for generations, polyploidy typically does not work well in humans or animals. Doubling of a chromosome in humans, for example, leads to Down syndrome. Some biologists believe that in plants, polyploidy acts as a survival mechanism, allowing plants to endure droughts and other hazards. The percentage of polyploidy plants is greater in harsh environments, Gal noted.

"Animals can move. Plants can't. It is a way to become more robust," he said.

Various scientists have developed polyploid plants in the lab, but the effort often fails. Many of the resulting plants can't reproduce, have had their genome damaged during the polyploidy process, or revert back to their more natural genetic state in a generation or two.

The problem in part has to do with the tools employed. Polyploidy occurs in the first stage of mitosis, where a cell splits into two. In a normal cell, the DNA in the cell is replicated and then spindle fibers pull the cell into two different directions until two identical, independent cells emerge. The cell multiplication process then continues until you have a full-fledged organism.

In a polyploid plant, the fibers never manage to pull the initial cell into two. That results in a single cell with twice the normal number of chromosomes. The diploid cell then becomes the basis for the organism. (If cell division fails again, a tetraploid results.)

To recreate the polyploid process in a lab, scientists have bathed the cell in colchicine, a harsh chemical solvent. By contrast, Kaiima does not bathe its cells. It targets its solvent (which he says is gentler than colchicines) directly at the spindle fibers so that less material is required. After trial and error, it manages to produce seeds that can give rise to stable crops that do not revert back to single chromosome sets.

Injecting solvents in a targeted manner derives from cancer research. Amit Avidov, a well-known seed scientist, is one of the co-founders. Avidov started AB seeds, now part of Monsanto.

So why does Gal argue that these plants aren't GMOs? Most genetically modified plants are transgenic, i.e., the genome of the plant contains genes from other species. Kaiima's polyploids do not contain any material from other species. In fact, the strands of DNA are identical to normal plants; there just happen to be more of them.  

Regulators in some instances don't classify polyploids as GMOs, he said. Look at the polyploid varieties of wheat: although developed centuries ago, humans had a direct impact on the genetic content. Where do you draw the line? Nonetheless, activists have also focused on polyploids. More extensive use of the technique could lead to regulatory issues.

The company received $8 million in its first round.

Kaiima, by the way, means 'sustainability' in Hebrew.

Starvation is a big part of the business plan, says Aurora CEO Greg Bafalis.

Aurora grows algae and converts it to biodiesel, omega-3 oils for food producers and algae power that can be sold as pet food or protein. If you starve the algae, they produce more oil: roughly 30 percent of the mass turns into oil, he said. In non-starvation mode, only ten percent of the mass turns to oil. Thus, depending on demand, Aurora can tweak its ponds to achieve different outputs.

Whether and how the process works on a large scale will soon be seen. The company — which to date has grown its algae mostly in swimming pools in Florida — has erected six one-acre ponds in northwest Australia that can produce 15 tons of dry, ash-free biomass per month. Later this year, it will open a five-acre pond in or around July. The five-acre pond will then become a modular unit for larger algae farms.

"Biofuel, omega-3s, and biomass: we will always produce all three," he said.

Like a number of other biofuel and algae companies, Aurora may find 2011 to be a better time than the previous few years. After the financial debacle of 2008, oil prices plummeted and capital dried up for many in biofuels. A few very visible belly flops — remember Imperium Renewables? — in the segment didn't help either. To survive, Aurora swapped CEOs, went into silent mode, and transitioned from being a fuel producer to a company that produces food additives that also happens to have a fuel division. At least they didn't pretend too much that it was all part of a deliberate master plan.

Since then, new CAFE standards, rising oil prices and an improved economy have changed the outlook. Both Amyris and Gevo have held successful IPOs, and Solazyme, the largest algae startup, has filed the preliminary papers for an IPO.

Like Amryis and a few others, Aurora has walked away from its earlier, more grandiose claims. in 2009, former CEO Bob Walsh predicted that the company could have a 2,000-acre pond by 2011 (hey, that's this year!) or 2012 that could produce $2-a-gallon diesel. Now, Bafalis will only say that Aurora will be able to sell its products profitably.

Aurora's strategy has a few interesting twists. It grows algae in open ponds through photosynthesis, a process that is cheaper than bioreactors and fermentation kettles. It doesn't rely on genetically modified algae but rather on selectively bred algae — again, this approach is cheaper than other options. But how you do keep invasive species out of the ponds? Bafalis says Australia's climate will be a big help.

"Northwest Australia gets two months of rain a year and then it's all blue skies and sunshine," he said.

The company has also developed pesticides that kill other species but doesn't harm theirs. Mechanical systems also keep out invaders.

To remove the algae from the water — one of the more costly challenges in algae — Aurora uses technology similar to the components used in wastewater treatment facilities. It also employs centrifuges. How much de-watering costs and how well it works will be one of the primary factors in determining if Aurora sinks or swims.

Aurora, Bafalis added, will likely produce fuel oil itself but sell algae oil to others, who will then process the raw material to produce a finished product.

"We will be an ingredient company," he said. "Biofuel will probably be the only thing that will be an end product."

Perfume additives and shark liver oil substitutes first; the broader market for diesel over time.

That’s the revised business plan, in a nutshell, for Amyris Inc., which has formally moved into commercial production. Amyris has created a genetically modified yeast that converts sugar cane syrup into hydrocarbons via fermentation. (Ordinarily, yeast would convert sugar into alcohol, a chemical with less value.)

The company now has two fermenters with a 100,000-liter capacity in operation that are capable of producing 17 million liters a year of Biofene, Amyris’ base hydrocarbon, says Jeri Hilleman, CFO. Amyris — one of the first companies to champion exploiting GMOs to produce industrial chemicals and fuels — has sold some Biofene, but not in volume. Most of its revenue comes from reselling fuel from other parties.

Amyris can sell Biofene itself, or add molecules to it to convert it to diesel or designer lubricants and then sell those higher-value products. A substantial portion of the early Biofene production will go to make squalane, a perfume additive. Now, squalane is usually made from heavy olive oil, which can be tough to find because of the demand for extra virgin olive oil, or shark liver oil.

Squalane can sell for $25 to $30 a liter, compared to $5 to $9 a liter for lubricants.

In 2012, Amryis will expand production by installing fermenters with a 600,000-liter capacity. It will also devise new families of hydrocarbons. Biofene contains 15 carbon molecules. In the future, Amyris will try to make 10-carbon molecules for, potentially, the jet fuel and polymer market, as well as 5-carbon molecules, like isoprene, for making rubber. (Genencor, now part of DuPont, showed us a bug-inspired isoprene Goodrich puts into tires.)

The company is also tweaking the process so it can move from batch to continuous manufacturing. “It is like a salad dressing. You pull oil off of the top” of the fermenter tank, she said.

The activity underscores what one could call the rebirth of biofuels. Biofuel and biochem companies raked in hundreds of millions of dollars in 2006 and 2007. Then the recession hit, causing funding and oil prices to collapse.  Companies such as Range Fuels, Imperium Renewables and Mascoma suddenly found themselves facing reduced circumstances. 'Hey, buddy, can you spare $256 million?' became a common refrain.

Amyris wasn't immune from hubris and disappointment. CEO John Melo told us in 2008 that by 2010 Amyris hoped to be producing 200 million gallons of diesel a year and selling it for $2 a gallon at wholesale.

Whoops.

Cut to 2010. Fuel prices started to climb, governments got serious about mileage and biofuel standards, and funding returned, giving startups a chance to meet downward-revised goals. Amyris and Gevo held successful IPOs and Solazyme and Kior are expected soon to follow.

Amyris' progress over the next several years — assuming it happens — could also become an endorsement for synthetic biology. Many believe that chemistry and refining can be made cheaper by exploiting engineered microbes and the magic of metabolism.  Others say traditional thermochemical processes work better, particularly for volume manufacturing. If Amyris'  yeast turn out to be the diligent employees the company has promised, expect to see momentum to start to shift to the bugs. 

Fuel is still part of the business plan, she added, but Amyris will move gradually into it. The company largely wants to stick to markets that will allow it to sell its liquids as a positive margin. It’s still not as cheap to ferment oil as it is to extract it out of Saudi Arabia. In some markets with strict renewable standards such as Brazil, Amyris can already find willing fuel customers. A Sao Paolo bus agency is currently buying fuel, for instance.

Over time, Amyris and partners like Shell and Total will try to bring microbe fuel to Europe.

And contrary to some rumors, Amyris remains in the medical market. Sanof-Aventis, the French pharma giant, still plans on coming out with the synthetic version of Artemisinin, a malarial, in late 2011 or early 2012.