If successful, the partnership, which is expected to last six years, will create economical fuels for cars and other vehicles from photosynthetic algae, providing a renewable oil substitute to replace fossil fuels.

"The world faces a significant challenge to supply the energy required for economic development and improved standards of living while managing greenhouse gas emissions and the risks of climate change," said Emil Jacobs, vice president of research and development at Exxon Mobil Research and Engineering Co.

"It’s going to take integrated solutions and the development of all commercially viable energy sources, improved energy efficiency and effective steps to curb emissions. It is also going to include the development of new technology."

Exxon said it will use half the $600 million for its own research, and provide up to $300 million to Synthetic Genomics, depending on whether certain research goals are met, a spokesman told Bellona Web in a telephone interview.

Exxon Mobil’s collaboration with Synthetic Genomics will last five to six years, Jacobs said, and will involve the creation of a new test facility in San Diego to study algae growing methods and oil extraction techniques. After that, he said that the company could invest billions of dollars more to scale up the technology and bring it to commercial production.

Jacobs said, “It’s fair to say that we have looked at all the biofuel options. Algae ended up on top.”

"We’re not claiming to know all the answers," said Craig Venter, founder and CEO of Synthetic Genomics, which has so far done early work on algae strains. "There are different approaches to what is truly economically scalable, so we’re testing things and giving a new reality to the timelines and expectations of what it takes to have a global impact on fuel supply," he told Greenwire.

Jacobs and Venter have remained closed- mouthed about the specific technology the collaborative effort would employ. They said the team would investigate all options, including growing organisms in open ponds and in closed photobioreactors.

They added that they were likewise uncertain what end-product fuels would result from the collaboration. Other startup companies were reported by Greenwire in April to have announced that they were producing both synthetic crude and biodiesel using photosynthetic algae.

At the same time, Eckelberry’s commentary also told “Biodiesel Magazine” that “Algae is now being validated as a legitimate feedstock. It is going to have a long-term outlook with an investment like this.”

Scientists in San Diego’s biotech community, where Synthetic Genomics is based, said the deal is a major step toward making the region a leader in developing algae based fuel. Four major research institutes recently created the San Diego Centre for Algae Biotechnology to advance the goal.

“This is a watershed event for algae biofuels – once the big companies get in, the way Exxon has,” said Stephen Mayfield, a biology professor who studies algae at the Scripps Research Institute, a member of the algae biotechnology centre. Others are the University of California at San Diego, the Scripps Institute of Oceanography, the Salk Institute and San Diego State University.

“I don’t know what $600 million is in terms of (Exxon’s) total investment, but it’s a big number – it’s a serious commitment,” said Mayfield. 

Some US Environmentalists were more cautious in their appraisal of the Exxon Mobil-Synthetic Genomics plan.

"They’ve never done anything like this before – invested real money in the renewables sector," Kert Davies, research director at Greenpeace, told the New York Times. "We’ve always said (the oil industry) has to be part of the climate change solution. We can’t solve anything without companies like Exxon helping."

He added, "I’m guarding my optimism."

Exxon Mobil’s timing is noteworthy, Davies said, because of the ongoing energy and climate legislative fight.

"It’s interesting timing as the oil companies are struggling to find a place at the table," Davies said.

For the time being, the lobbying and jockeying for position will likely continue, even as the US Senate goes on recess, shelving further debate until autumn on US President Barack Obama’s cape and trade bill.

Even though the mark-up of the bill has been postponed, Barbara Boxer, California Democrat Senator, and Chairwoman of the key Senate Committee is writing key pieces of the Senate climate bill with the aim of bringing a bill to the Senate in September.

Photo: wikimedia commons

Details of Boxer’s climate legislation are under wraps. But Boxer has said that she will use the legislation that passed in the House as a basis for negotiation.

That bill set a 17 percent cut in US CO₂ emissions by 2020 compared with 2005 levels. Senate Majority Leader Harry Reid,Nevada’s Democrat Senator, passage of new climate legislation before the end of the year. Reid has set a September 28th deadline for committees to finish work on the bill.

There is debate about whether Congress will meet this timetable. It is unclear whether the Democrats can muster the necessary 60 votes for a bill that will draw opposition from Republicans and possibly a dozen or so moderate Democrats.

Capitol Hill debate will be key to Copenhagen success.

But pressure is mounting on Congress to show progress on global warming legislation before the UN climate summit in December in Copenhagen, and Capitol Hill debate will be the key to success.

“I would love to have as much progress on the law by the time of Copenhagen as possible” said Todd Stern, President Obama’s top climate diplomat. “If it can be done by Copenhagen, that would be great.”

President Obama must be mindful of going to Copenhagen without a law and signing up to an agreement that does not have the support of Congress. There would then be a risk that Congress would reject the treaty as they did in 1997 with Kyoto.

Which direction Congress will lean will not be known until the September.

Jonathan Temple, Director of Bellona USA, and Charles Digges, editor Bellona Web’s English pages wrote this report.