Meeting Notes

BP/DuPont & Biotech

Date: Jan. 21, 2003

Location: BP New York Office

Objective: Explore areas of possible mutual interest between BP and duPont in the area of biotechnology.

Attending:

John Ranieri Vice President and General Manager, DuPont Bio-based Materials

John Pierce Director, Biochemical Science and Engineering, DuPont Central Research and Development

Scott Cunningham New Market Development Manager, DuPont Materials

Scott NicholsResearch Manager, DuPont Central Research and Development - Bioprocess Development

William (Bill) Frey Business Director, DuPont Bio-based Materials

Robert Dorsch Director Biotechnology Business Development, DuPont Bio-based Materials

Bernie BulkinStuart SmithChris MottersheadJay KoubaSteve Wittrig

Notes:

Overview and General Agenda(Bill Frey)

Points of discussion from DuPont perspective that might be of interest to BP

PDO/SoronaPolyhydroxyalkanoates (PHA’s)DOE Project - BiorefineryEOR (Enhanced Oil Recovery)Methane ConversionFuel AdditivesAcOH (Acetic Acid)ACN (Acrylonitrile)Hydrogen production

1,3 PDO (1,3 Propanediol)(Scott Nichols)

3GT – Sorona (new polyester material – “PET” with 1,3 Propanediol instead of ethylene glycol)Unique recovery from strain (Less baggy trousers, e.g.)Holds dye more easily than PET (lower cost finishing, e.g.)Softer, more appealing feel (preferred carpeting, e.g.)Fibers, packaging, nonwovens, specialty resinsHomopolymers of PDO (as opposed to polyesters) also have interesting potential propertiesWill probably cannibalize PET and nylon to some extent as well as enhance growth in generalEconomics still not well established

Glucose to Glycerol to 3G

Combine genes from yeast and bacteria to incorporate in E ColiOn the order of 50 modifications to the genome to regulate and balance enzyme production, metabolic pathways and regulation of general cell metabolism (e.g., glycolysis and respiration)Almost all functionality is incorporated on the chromosome (as opposed to less stable small plasmids) – organism is relatively stable over time and generationsDiscussed as a “tour de force” in genetic engineering of metabolic pathways (obviously, a biased set of observers for this point of view, but it looked pretty impressive from this non-expert’s perspective)This has been a general “learning experience” and development of significant, imbedded capabilities within DuPont vis a vis genetic engineering, control of metabolic pathways to produce desired products and scale up. Something they seem quite confident will be

transferable to other products (the targets for which they are open to suggestion from potential partners such as BP).

Close to theoretical yield of 3G from glucose (~50% compared to theoretical 57% based on carbon in glucose) (loss is to CO2)

Process developments in prospectEnhance kineticsContinuous process (longer term)B12 recovery

B12 is a cofactor in final step and is a cost issue (work on reducing requirements) B12 is used in “process control” (introduced at the end of the fermentation to allow cell growth and accumulation of intermediates during the early stages of the cycle.)

(TSW note – This area (i.e., possible target molecules of interest to BP) is perhaps a place for some idea development within BP now that there is some better understanding of the capabilities being developed in metabolic pathway engineering. Obviously an iterative process of discussions back and forth with interludes of reflection, but it seems to me there are recent developments in these areas that may be positioned to move beyond dreamy cellulose-to-ethanol or small scale specialty pharmaceuticals. No case for action yet maybe, but perhaps worthy of more active monitoring.)

Biological routes to polymers

PHA’s as an example (naturally occurring as well as genetically engineered/enhanced)Polymer occurs in nature as energy storage when the organism is nitrogen or phosphorus limited.

PHA PropertiesThermoplastic, moldable, films, injection moldable, biodegradableStill looking for market (Does the world need another commodity thermoplastic?)

Metabolix – up to 90% dry weight(TSW note – Somewhat interesting point. No mention of Metabolix aspiration/DOE program to transplant this capability from bacteria/fermentation into plants (i.e., grow and harvest plastics internally in switchgrass and use that as a feed to a “biorefinery”). If my understanding is correct, this type of thing was an aspiration at DuPont in recent years that has been scaled back.)

Current playersMetabolix (significant IP, composition of matter, manufacturing via fermentation, R&D)

Kaneka- mixed monomer productionIn Sales

P&G

ChiroBioNew company with access to Sang Yup Lee (one of world’s foremost experts)

This general area (i.e., polymer production in situ in biological systems) didn’t appear to be an area of active interest for DuPont right now. Maybe I missed it. I perceived they were just discussing the topic to bring us up to date on this particular potential area for biotech. (Perhaps something they could get interested in if it was something that we seemed particularly excited about.)

DOE Program – Integrated Corn-based Biorefinery (ICBR)(Bob Dorsch)

Target – technology for economically viable, very clean production of fuel ethanol and added value chemicals from renewable raw materials base

Partners - DuPont, Diversa, NREL, John Deere, Michigan State University

4 years, $38 MM

Fits with general DuPont corporate goals – 10% of energy needs derived from renewable sources, 25% revenues not relying on non sustainable raw materials (TSW – I’m not sure I got the exact wording of that last one. A lot of the “wiggle” room on that one seems to be that they want to move more toward intellectual content, licensing, consulting as a larger part of the revenue base.)

ICBR (Below is the easiest representation in text form of the “three – line” schematic that Bob presented for the Biorefinery that generated so much discussion of the analogies to the growth, technology development and integrated nature of today’s oil refineries from the original distillation plants of the early 20th century.)

Grain – milled – Starch hydrolysis – Ferment/separate – PDO

Stover – pretreat – enzyme hydrolysis to mixed sugars – Ferment/separate – fuel ethanol

Boiler

Don’t have to push purities as hard (e.g., can degrade sugars from line 1 to line 2 and still produce “fuel grade ethanol”, can degrade unconverted cellulose, lignin, pentoses, etc. from line 2 to line 3 to recover energy and steam, etc.)

John Pierce brought up the concept of the potential of very low cost ethanol as a possible source of ethylene (TSW note – One of my pet ideas – portable, storable, “break the large scale paradigm” ethylene – so I couldn’t resist sticking it in here.)

DuPont business model for ICBR development – invent and license the enabling technologies (as well as presumably take off and sell higher value products such as 1,3 PDO and polymers?)

There was also a chart that I didn’t capture the details of showing nominal returns (and potential improvement in life cycle benefits) from ICBR making PDO and EtOH compared to separate plants making both products. As I recall, a 2% return for separate plants and 20% return for ICBR (albeit based on some fairly “hopeful” assumptions about the maintenance of government subsidies for fuel ethanol (and somewhat off the point of the defined target of “economically viable”.))

Glucose to AcOH ?? Some discussion of this with Jay providing insight that AcOH is a natural byproduct of cellulose to ethanol and, alternatively, it is much more likely to be economic to convert product ethanol to AcOH at the end of a biomass to ethanol process than to try to divert some of the glucose to AcOH in the fermentation and have to separate the AcOH from a dilute aqueous solution.

Bioconversion speculations on nitrilesACN?? A brief discussion based on the fact that BP asked if there were any thoughts from DuPont since it is one of our products. No particular ideas of interest here.

Overall, the integrated systems (the “whatever” refinery) approach is as intriguing for biomass as in the other general cases the world is interested (gas-based, coal-based) for the same reasons. Economy of scale in raw material procurement and initial conversion step (sugar production from biomass, reforming, gasification respectively). Shared offsites, utilities and waste handling. Obviate need for purification, packaging, storage and work in process inventory for intermediates. Energy/Exergy optimization from steam and power integration. The introduction of superbugs to produce actual higher value products of some significant scale (e.g., PDO with perhaps more to come) is one more arrow in the quiver for the “carbohydrate” refinery. In my opinion, worth some additional conversations (if not with DuPont, at least with partners of choosing.) Would be good to get some kind of expert assessment of where DuPont and this group really stand relative to their competitors (leviathan as well as “tiny/new to the “ecosystem” /hungry”).

Microbial Methane Utilization and H2 production

Products from methanotrophsSpecialty Chemicals, Pigments, proteins, Isoprenoids – specialty chemicals, etc.

DuPont technology assets in C1 Microbial strains Developed genetic engineering Bioprocess development experience Engineered pathways IP

What products make sense from methane Materials that are naturally made with high yield from methanotrophs Materials produced from abundant methanotrophic intermediates (aromatics,

isoprenoids) Highly reduced with low O2 content High volume chemicals High value protein co-products

Advantages to C1 biomanufacturing Strategic choice of substrate Value from flare gas Containment and safety of GMO methanotrophs Freedom to operate based on comprehensive estate in C-1 biotech Biomass fractions as co-products

Discussion here centered on a few major points

Have you thought of using MeOH as the starting point? Some speculation there that bugs can do very interesting and unique things and there might be some very interesting products if you didn’t saddle the bug with the upfront requirement to break into methane in some way that isn’t total oxidation.

General methanol economics – headed lower and lower – almost no conceivable way that biotech will beat conventional routes to methanol at large stranded gas sites. Possible uses (maybe?) for situations requiring low volume, low capital methane conversion (e.g., GHG reduction for flare reduction, landfill methane, coal bed methane). Even that is a big stretch.

Didn’t seem to me to be much here that was new or potential game changer in fuels or large volume chemicals.

Bioprocess for H2 from Crude Sugars

Crude sugars – non-photosynthetic anaerobic bacteria – H2Goals – irreversible H2 production, Yield gt 30% of H2 available in glucoseHigh rate of production

Nothing here I could see (or anybody else as far as I could discern).

Fuel Additives(Bill Frey)

Cellulosic biomass with ethanol – Alcoholysis (acid catalyst) – formate and novel esters

Discussion of esters as blending components. General BP experience. Initial screening tests are not expensive (octane and RVP), but it’s a long process to actually get fuel blending components that are totally new into the system.

Hydrophobic is desirable (for distribution and for containing plumes from spills/leaks). Unlikely target for biologically derived molecules.

Triptane as an example of a desired molecule.

No particular ideas here, but they may come up with some proposals.

Using tools of modern biology to enhance oil recovery(Scott Cunningham)

Oil recovery is inherently inefficientLogistical solutions – field managementEOR – water, heat, steam, solvents, polymers, micellular agents, surfactants, microbes, nutrients…

Biology has a role in oil recovery todayMicrobes exist in/and around the oil reservoir and affect oil recovery (both plus and minus)

Premise:No biologically derived material has ever been selected or optimized to enhance oil recovery.New tools and methods available that could help

Microbial products that might be useful in some aspect or another of oil recovery (in situ and ex-situ) (actually an interesting table that I wasn’t able to totally transcribe)AcidsBiomassGasesSolventsSurfactantsPolymers

Examples

Microbe production of novel surfactants(many microbes produce surfactants, none are optimized for oil recovery)

Idea – designer surfactantTypically could screen 1-25 phenotypes a week, now a billion times moreSelect substrate binders from 10**8 genotypes (selection by whatever hangs around after a water wash on the mineral sample of interest)Essentially, very efficient high throughput experimentation to tailor specific surface activity for binding to minerals in a particular well and then attaching other functionality to those binders. Looked like something that could be feasibility tested in their labs fairly easily. Appeared to be enough interest on both sides to pursue to the next stage of discussions among experts.

Proteins can be made selective to particular faces of specific minerals and can “catalyze” crystal reconstruction or other reactionsCalcium carbonate(I didn’t quite catch all of this, but it also looked worthy of some more brainstorming with some rock and reservoir guys for potential ideas.)

Other areas that were covered very quickly

Hydrocolloids – none optimized for EORStarchesCellulosesHemicellulosesChitin

Biotech to generate proprietary carbohydrates with differing properties (viscosity, gel formation, stability)

Significant discussion on surface active agents for downhole applications (and drag reducers in pipelines)

This seemed to be in general one of the most promising specific areas for follow up discussion.

Summing up

Opened up new possibilitiesBiorefineryEORNew metabolic pathway engineering

What are the game changers?

ACTION ITEM: Bernie will contact John Ranieri after BP internal discussions for proposal of follow up.