Solazyme's Harrison Dillon

Solazyme's Harrison Dillon

AIM Interview: Solazyme’s Harrison Dillon

June 2, 2010, by David Schwartz

Seven years ago two former college roommates set up shop in a Palo Alto garage, with the mission of becoming the first company to develop commercial algae-based fuel. They built their business plan with the concept of using both open ponds and photobioreactors. After a number of unsuccessful attempts to get the VCs to back their plan, they finally found a few interested angel investors and one small, forward thinking VC who understood what they were talking about, and the two founders convinced them that they were on a golden path to the green energy future.

For the first couple of years there were six employees happily at work, investigating strains, experimenting with growing conditions, and attempting to optimize the development of algae biofuel.

But then one day a terrible thing happened. After closely analyzing their current and projected best case production costs, they realized the oil they could produce was coming in at over $1000 a gallon. This put the co-founders into a panic, not knowing what they could to do about this harsh reality, only that they certainly could not continue down that path.

algae with oil

Solazyme algae with oil

But these weren’t your normal college roommates. They had gone on in the time since being undergrads to accumulate an MBA, a PhD in genetics, and two law degrees between the two of them. So, they cooked up a better idea.

What they noticed was that sugar cane ethanol cost between $1.50 and $2.00 a gallon to produce. And it was known already that a small percentage of algae could grow on sugar. So they reasoned that if they could swap algae for yeast, to make oil instead of ethanol, and if they invested in the science and the development to go down that road, they could get algae oil to that same low per gallon production cost range as ethanol.

And as much as they believed this new path was the one that was going to work, they were petrified that their investors were going to abandon them for making such a huge switch. But they also knew that when you are an entrepreneur and you start a company, you have to be flexible. You have to be willing to make changes. So they went back to their investors and said that this whole pond/photobioreactor thing that they said was going to work, well, it was not going to work, and they needed to raise more money so they could change their plan and do what they thought they now needed to do. They presented the comparison to making ethanol, said they thought it made sense, and asked if the investors would fund it.

fuel shake

Fuel shake

Fortunately, instead of abandoning them, the investors supported their new approach very strongly. “What I realize now that I didn’t know at the time we went through that,” says Harrison Dillon, co-founder, President and CTO of Solazyme, “is that they invested in us, as entrepreneurs, as much as any original business plan we had floated.  It set them apart from the VCs we spoke with originally who only knew to look at the business plan.”

We spoke with Harrison at the recent Algae Summit 2010 in San Diego about Solazyme’s unique approach to algae production, one that has put them in the position of currently being the leading producer of microbial based diesel and jet fuel in the world.

Q. What gave you and your partner, Jonathan Wolfson, the confidence to change to a fermentation model for an algae oil company? And why didn’t you go directly to ethanol production with algae?
A. When we started to consider fermentation, the question then became, with a given feedstock — whether it’s wood chips or sawdust or corn stover, or sugarcane, or whatever — what would you rather have if you could make them both for $2.00 a gallon, oil or ethanol? And it didn’t take us very long to conclude that oil is a far superior substance to ethanol.

There are three primary reasons: first, it has a higher energy density, so from an oil-based fuel product you get about 30% better gas mileage out of a diesel engine than out of a gasoline engine, which is what ethanol burns in.

The second reason is the total greenhouse gas footprint on production. With ethanol you have to go through a distillation step, so you’re putting all this energy into it. When you have a million gallon ethanol fermentation, 85% of the liquid is water and 15% is ethanol. And they typically use coal-fired power to heat a million gallons to a temperature above the vaporization temperature of ethanol, and below that of water, and then it condenses and you get your ethanol purified away from the water. We don’t have a distillation step in our extraction process. It uses far less energy. So the total lifecycle is far less energy in per energy unit out.

First Pour of SoladieselRD renewable diesel in the car

First Pour of Soladiesel RD renewable diesel in the car

Then there’s a third reason, which is infrastructure compatibility. Ethanol can’t be pipelined, it has to go on barges, whereas the oil we make can go through any regular pipeline. It can go through oil refineries, and through the existing gas pumps. You don’t need a special E85 pump. And it can go into existing diesel engines, so you don’t need a special E85 engine. So, for those reasons we decided it was worth the effort to turn biomass into oil instead of ethanol, and that’s when the company really started taking off.

Q. What business milestone is Solazyme currently approaching?
A. We have three business units: fuels and chemicals, foods, and health sciences, and all of them are approaching milestones. They’re all based on a core technology, but have pretty significantly different milestones to each of them.

In the fuel area, we have an ongoing program with the US military right now, and are going to deliver a little under 22,000 gallons of diesel and jet fuel for the US Navy. The deliveries have already started and they’ll be complete by the end of the summer. This is the testing and certification phase of what we intend to become a commercial production supply to the military.

In the foods area, we’ve been selling into the nutritional supplement and healthy food market, and we’d like to see that revenue grow quite a bit. We are producing it ourselves and selling it through distributors. You can buy our algae now in Whole Foods.

The Unilever deal that was recently announced is in chemicals, and that’s to make soap and detergents. We are making oils that best match the needs for being turned into soaps and detergents. The capability that we’ve developed at Solazyme over the last few years is one that allows us to tailor the oils, so we’re able to engineer them to make oils that you’re not able to achieve through blending other oils, or that come from a natural source. We can optimize the oils to be ideal for a particular product, in this case, soaps

Solazyme genetics lab

Solazyme genetics lab

Q. What major technical obstacles are most important for your R&D team at the moment?
A. We believe that we’ll be able to make oil at between $60 and $80 a barrel within about two years. We’re not that far from there right now, but we’re in the flat part of the cost curve. There were months at Solazyme where we reduced the cost of manufacturing 25% every month. Those were fun times, but that’s because we were in the beginning stages and now we’ve really come very far down the cost curve.

We’ve already gone to commercial scale fermentation facilities for our military project. We were awarded a $22 million biorefinery grant from the DOE to develop a commercial scale fermentation factory that was originally built by Merck to make food products and pharmaceuticals. So the hurdles for us are really in optimizing the efficiency of the conversion process of the biomass into the oil to get us into that $60-80 a barrel range.

Q. Do you see long term that fuel is going to be what the company becomes known for, or do you see more and more diversification as you grow?
A. That’s a good question. We don’t have an answer really to what in the long term the company will look like in terms of those products. When we founded the company, originally we were going to make diesel fuel. That was it. We had built a core technology around renewable oil production and then we realized that we should think about making any product that could be made from oil, and that includes cosmetics, foods, edible oils, specialty chemicals, commodity chemicals, and fuels. So that has led to the formation of different business units. And if we didn’t think all of them would be successful, we wouldn’t be pursuing all of them.

Q. You’ve examined a lot of strains, obviously. Is it as simple as the strains segregate themselves toward specific products, or are you exploring various strains in all your product lines?
A. We’ve explored a lot of strains for all the product lines. You’ve got different needs for different products, so you want something that’s going to grow fast no matter what. But then you’ve got an oil profile that is going to be best for diesel, or best for jet, or best for edible. With the fuels and chemicals, we use quite a bit of genetic engineering. With anything for human consumption, we don’t use genetic engineering. So you’ve got to have an oil output from the natural strain for anything edible that’s going to be what you need, because we’re not going to go in and engineer those.

Fermentation tank

Fermentation tank

Q. What is your summary description of Solazyme’s heterotrophic process?
A. It’s a pretty feedstock flexible system, so you can use just about any type of carbohydrate. You can use depolymerized cellulose in all of the different forms, so that’s corn stover, switchgrass, wood chips, basically everything that’s available for cellulosic ethanol you can use to make cellulosic oil in our technology. You can also use biodiesel waste glycerol, it works very well as a feedstock. Sugar cane works very well.

Then you put it into the tank, which looks not altogether different from what you see at a brewery, but it’s about 200 times bigger. Once you put the biomass in, you inject your seed algae and it goes through a process that takes a few days to convert it into oil, and at the end of the process you have algae that is around 75% oil by dry weight. Under the microscope it looks like little ping pong balls of oil. And then after that we go through some downstream processing, which is proprietary, and end up with spent biomass, which is fiber and protein, and the oil. And then we take that oil through varying processes depending on whether or not we’re going to make edible oil, soap, diesel fuel, biodiesel or anything else.

Q. What kind of dry weights do you end up with at the time of harvest?
A. Hundreds of grams per liter of dry cell weight.

Q. And what do you do with the spent biomass?
A. We’re looking at it as an animal feed or fertilizer. If you think about the huge volume of material you would have in making a fuel product, you need markets that can absorb large amounts, so animal feed and fertilizer are really the two best.

The fiber is all carbohydrate, so you can recycle that, and the water is recycled. If you think about it, if you have several hundred grams per liter of dry cell weight, and 75% oil, you think about the water use compared to, say, having a pond that’s 800 milligrams of algae per liter and 15% oil…you’re talking about several decimal points less water per gallon of oil produced. And there’s no evaporation since you’re working inside of steel vessels.

Green crude

Green crude

Q. Is your fermentation process much different from traditional fermentation?
A. People have been doing industrial fermentation for over 30 years to make not just cutting edge cancer drugs, but food ingredients, infant formula, carpet fiber, vitamin C, antibiotics for livestock…it’s a really well developed technology. What we are doing is utilizing that methodology, but with a very new process and new bug to make a new kind of product.

Q. Do you take the oil all the way to biodiesel, or does someone else refine it for you?
A. Our core technology is converting biomass into oil. Once we have the oil, we largely rely on a partnering approach to convert that into its finished product. Plant oils have been around for hundreds of years, so there’s all that chemistry experience in oleochemicals for turning plant oils into everything from soap, to plastics, to you name it. So, we felt it was more important to focus on the core technology to make that oil as cheaply as possible, and rely on partners who have decades of experience at converting plant oils into any of these other products. It’s been a strategy that’s made a lot of sense for us.

Q. Do you think Solazyme will always be heterotrophically oriented, or do you think you will ever diversify in your technologies or reconsider photosynthetic approaches?
A. It’s really difficult for me to see going to photosynthetic approaches. We did it for two years, and have not seen a reason to look back.

You guys are in the minority as far as your approach to algae production, and yet you are further along the development path than perhaps any other company in the field. Is that something that you think others will discover as time goes on, that the economies only work in a heterotrophic environment?

You know, I don’t know the answer to that. It was interesting for us because right when we concluded that we needed to change our production method and saw the comparison to making ethanol and decided to start the fermentation approach, right as we went through that transition, all of these companies started getting formed and going into what we had just spent two years doing and concluded was not a good idea for us.

So, I will change my views when I see someone using one of those photosynthetic approaches actually make any meaningful quantity of oil. I haven’t seen it yet. I’ve seen a lot of hype. I’ve also seen a lot of interest. I’ve seen a lot of brainpower. And I’ve seen a lot of government money. So I think some useful things will come out of photosynthetic approaches and it will be interesting to see. But it’s hard for me to foresee us moving back into that type of production.

algal crude drum pour

Algal crude drum pour

Q. What surprises you the most about where the company is today versus where you were when you started?
A. Well there were two big epiphanies we had. The first was changing to heterotrophic growth, and the second was changing from thinking we were going to make diesel to realizing we were going to have an opportunity to make anything made from oil. And so, from that perspective, the company doesn’t look anything like it did when we founded it. Compared to where we started, it surprises me that we do fermentation, and it surprises me that we would be in something like soap or edible oils, but we got there for the right reasons. So, I’ve got zero regrets.

You’ve got to be open to change. And you’ve got to be willing to see that something you thought was going to work isn’t going to work. And you need to have the attitude that failure is information gathering. If you have that, you can move through things.

Q. Our friends at Biofuels Digest rated Solazyme the number one biofuels company in the world this past year. Why do think they felt that way?
A. We have manufactured orders of magnitude more diesel fuel through a microbial production process than any other company or technology in the world, whether it’s a yeast company making diesel, or a bacteria company or an algae company. And we’re about to deliver, as I mentioned, a little under 22,000 gallons of finished fuel. I think that’s probably the main thing that they recognized.

Q. How long does it take you to manufacture that much fuel?
A. The manufacturing process is very rapid. The thing that took time was to optimize the process enough for us to decide it was worth pulling the trigger to scale up to factory level production. But the actual process itself, you can go from biomass to finished fuel in less than a week. Just to be clear, I’m not saying we made 22,000 gallons in less than a week because we did multiple batches, but it’s a rapid process.

Q. Is there a shelf life issue on the fuel?
A. We make fuel for consumers that meets the ASTM D975 for hydrocarbon diesel, and also the U.S. Navy F76 standard. It’s chemically pretty fungible with the petroleum versions of those fuels.  So once you refine it into your finished fuel, you are in pretty well developed areas in terms of storage and stability.

Alga sample

Algal sample

Q. What do you see as the government’s optimum role in incentivising the algae industry to create algae fuel-based solutions to our energy problems?
A. I think there are a couple of things they can do, some they’ve already started doing, like funding research and funding pilot and demo projects. We saw earlier today the discussion about a $44 million consortium (National Alliance for Advanced Biofuels and Bioproducts — NAABB) and it’s funny because somebody said to me the other day, “Aren’t you worried?” I said, “No! Think of all the things I could license that will come out of that.”

If somebody comes up with a better extraction process, I’ll be the first person to license it. Think about all of the great technology that could come out of all that investment. And when you look at that consortium, the other thing that is going to happen is they are going to train a whole generation of scientists. Think how many people are going to get their PhD in one of those labs that has a piece of that project.

So that’s very important – as well as funding the demo and pilot plants. The DOE funded a $22 million integrated biorefinery project of Solazyme’s. We’re going to run a full-scale factory for about two and a half years under that. That’s hugely important.

And I think there’s a third area where the federal government has started doing things, and where I think they could do more. And that is to use their enormous buying power for all their fleets, not just military, but all federal, state and local fleets — use that buying power to incentivize the production of these fuels by offering offtakes. Some of this has started. It started in the military, it was a pure contract bidding process for the jet fuel project where they offer to buy fuel.  Ideally if you can keep making it at a lower cost year in and year out until parity with petroleum based fuel, they’ll keep buying it as long as you hit the cost targets. Those kinds of offtakes are really important because they become a huge incentive, not just for companies to develop their technology and make the fuel, but it’s also a huge incentive for the finance community to then come in and back those companies. So that’s something the government has started doing, but could do more of.

Q. What about the investment community. You are well positioned geographically. When do you see Sand Hill Road jumping in with both feet and really going after algal biofuels?
A. Well, we’ve seen Sand Hill Road go through a few phases in biofuels. The first one was in 2003, when Jonathan and I were operating Solazyme out of a garage. We couldn’t find anybody on Sand Hill Road who had ever heard of the concept of a biofuel. So that was difficult. The biotech VCs were really biopharmaceutical VCs. And the energy VCs, there were maybe three of them. Now there are probably 100 or so. But those three had never even considered a biological approach to energy. They said to us, “Look guys, we fund solar panels, we fund wind turbines, we fund smart grid software, we don’t understand biotechnology.”

To me that was Phase 1, which was: This is really cool, but we don’t understand it. We can’t fund it. So then we found some angel funders who really got us out of the garage, as well as one very forward thinking VC firm who came into our seed round.

Then Phase 2 was a big rush a few years ago when a lot of money was going into biofuels, and then it really cut back quite a bit during the financial crisis. And Phase 3 is now, when things have started to come back.

Q. How do you feel about America’s role in the future of renewable energy?
A. I think there is an incorrect assumption that America will lead renewable energy. It’s not an assumption that we can afford to make. I heard something the other day from an MIT professor, a founder of a renewable energy company. He said they interviewed foreign-born PhD students when they started their PhDs in the US. 87% intended on staying in the U.S. when they graduated. And after the first class got to their graduation, they interviewed them again, and only 57% intended on staying in the U.S.

One thing that the government can do to really help here is, when someone gets their PhD in this country, they should have a green card stapled to it. It’s not 1970 anymore. Information flows around the world quickly. Information is mobile, and people don’t have to start their companies in the United States anymore. This is not going to be like Silicon Valley was with software. So, I think the US government has a ways to go in making sure the US maintains the lead in developing the next wave of green technology.

Q. What are your concerns about the developing algae industry?
A. I have fears about algae getting overhyped, and then there being a very large backlash. It’s really in everyone’s interest to not have a backlash, you don’t want algae to be viewed like, for example, cold fusion. And the outrageous claims that everyone has seen, that’s the kind of thing that makes it more likely that algae may be viewed by people that way, just by claims that can never be verified, that anyone who understands the technology knows aren’t real to begin with.

Copyright ©2010 All rights reserved. Permission granted to reprint this article in its entirety. Must include copyright statement and live hyperlinks. Contact

Visit the A.I.M. Archives

AIM interview ArchivesAlgae 101 ArchivesHot Products ArchivesInnovations ArchivesMoney ArchivesProcess ArchivesResearch ArchivesScale Up ArchivesThe Buzz Archives

FREE Algae News & Updates

Sign up to receive breaking A.I.M. updates!

From The A.I.M. Archives

— Refresh Page for More Choices
Natural carotenoid specialists Piveg Inc., with production facilities based in Celaya, Central Mexico, has announced immediate availability of natural astaxanthin materia...
University of Adelaide researchers are using nanotechnology and the fossils of diatoms to develop a novel chemical-free and resistance-free way of protecting stored grain...
Algae.Tec Ltd has received its first purchase order from Reliance Industrial Investments and Holdings Limited (RIIHL), in connection with the arrangements announced on Ja...
Technical standards define critical terms and metrics to add wisdom for the algae industry. Agreement among science and business leaders represents possibly the most diff...
Algatechnologies (“Algatech”), Israel, has announced a more than 100% expansion of its production capacity of AstaPure® brand natural astaxanthin. This doubling of capaci...
As the number of photobioreactors in an algae growing operation increases, there is a need for both autonomous control and monitoring of individual PBRs, as well as centr...
“Proterro has reached its Q1 sugar-production pilot milestones,” CEO Kef Kasdin reported at the recent Advanced Biofuels Leadership Conference, in Washington, D.C. “In fo...
Santa Fe Community College has been awarded a $50,000, SEED Infrastructure Grant from the Experimental Program to Stimulate Competitive Research (EPSCoR), for commercial ...
Algal oil represents one of the significant segments within the omega-3 polyunsaturated fatty acid (PUFA) ingredients market. Specifically, docosahexaenoic acid (DHA) is ...
A University of New South Wales (UNSW)-led team of researchers has discovered how algae that survive in very low levels of light are able to switch on and off a weird qua... reports on three young Spaniards who harvest seaweed, a culinary delicacy, as a way for them to stay out of Spain’s troubled financial waters. 35-year...
Phys.Org reports that scientists Jolanda Verspagen and Jef Huisman of the University of Amsterdam, The Netherlands have concluded that rising CO2 concentrations in the at...
Bookending the upcoming Algae Biomass Summit, Sept. 29-Oct.2 in San Diego, will be industry tours to give attendees a first-hand look at the latest progress in technical ...
The EPA has released the Annual Use of Pesticides in the U.S. Report. We now know that American farmers apply roughly a billion pounds of toxic chemicals intentionally in...
Using a combination of satellite imagery and laboratory experiments, researchers have evidence showing that viruses infecting those algae are driving the life-and-death d...
Expanding from its initial work in algal biofuels, General Atomic’s (GA’s) Advanced Biological Processes team has focused on the rising need for food globally, specifical...
Chase Ezell writes in about the irony of Algenol’s biggest friction source on the way to marketing their carbon reducing algal-based ethanol being — the EPA ...
Portuguese cement facility, Secil, and microalgae biotechnology company, A4F, also based in Portugal, have formed AlgaFarm, a joint venture to develop the use of cement f...