Biofuels Make Deals, Bucks, Progress

Biofuels firms are attracting big bucks and big backing from big companies.

Cobalt Technologies, which makes biobutanol from wood waste and other organic material, is going into business with construction giant Flour Corporation, the companies announced today. Flour will provide engineering consulting services for venture-backed Cobalt as the biofuels company gets ready to build demonstration and commercial-scale plants for its material.

Cobalt is concentrating on biobutanol, which can be mixed with gasoline, diesel or ethanol for fuel, and can also be substituted for petroleum in the manufacture of plastics and chemicals.

“We have examined many different biofuels technologies, and are choosing to work with those companies that we believe have the greatest potential to be commercialized economically and to make a major impact on achievement of the nation’s alternative fuels goals,” said John Hopkins, group executive of business development at Fluor, in a release. “We believe Cobalt's technology has great potential and are looking forward to helping them scale up rapidly.”

Cobalt is backed by some major players, including Pinnacle Ventures, Vantage Point Venture Partners, Burrill and Company, Malaysian Life Sciences Capital Fund, Life Science Partners (LSP), @Ventures, and Harris & Harris.

And its deal with Flour makes it one of several biofuels companies to cut deals with Fortune 500 companies, make progress on their test projects, or raise substantial money in the past several weeks.

Genome-mapping pioneer Craig Venter’s Synthetic Genomics has an impressive partner, and is under way with its plan to convert algae into fuel. In July, Synthetic Genomics and its partner, Exxon Mobil, opened a greenhouse last month that will allow them to move forward with their testing of algae-to-fuel technology.

Last summer, Venter’s firm landed a $600 million deal with Exxon to develop algae-based fuel, the largest such deal, and Exxon’s biggest commitment to alternative fuels.

"The greenhouse is the next important step in our alliance as we comprehensively explore algae as a source of renewable biofuels. The team has already made great strides in evaluating various strains and growth conditions for algae and we are eager to continue and expand this important research as we plan for the next stages of scale up," Venter said of the greenhouse. The next big milestone for the Synthetic Genomics and Exxon Mobil research comes in 2011, with the opening of an outdoor test facility.

Chevron is also betting on algae-based fuel, though not as much as Exxon Mobil. Chevron Technology Ventures LLC, the oil major’s venture arm, was one of those participating in a $52 million fourth funding round for Solazyme. Braemer Energy Ventures and Morgan Stanley led the round, and Lightspeed Venture Partners, The Roda Group, Harris and Harris Group, VantagePoint Venture Partners and Zygote Ventures also participated.

Solazyme uses a fermentation technique to pull oil from microalgae.

"Our technology and commercialization plans are progressing rapidly. We are executing against multiple partnerships with global industry leaders and the U.S. Department of Defense on a rapid path to commercialization," said Jonathan Wolfson, CEO of Solazyme, in a release. "The strong support from our current investors in the Series D is indicative of our ability to exceed milestones, including the production of renewable oil for multiple applications at large scale."