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Searching Termite Guts to Make Biofuels

14 November 2010 No Comment

By Helen Kaiao Chang

Company: Diversa Corporation

CEO: Edward Shonsey

Director of Alternative Fuels: Kevin Gray

Based: Sorrento Valley

Year Founded: 1994

Number of employees: 200 total, with nearly 100 in the biofuels research division.

Funding: publicly-listed company (NASDAQ: DVSA)

Revenue 2006: estimated $54 million total revenue, comprising less than $1.8 million from biofuels products

Revenue 2008: estimated $125 million total revenue; comprising approximately $40 million from biofuels products

What they do: Isolate enzymes that breakdown organic material and release energy, used in the biofuels, healthcare and other industries. For biofuels, the company’s enzyme products break down starches found in corn, to create ethanol fuel.

Now, the company is going another step further to find enzymes that will break down biomass – such as wheat stalks, wood or city waste – to create ethanol. Diversa’s scientists are exploring the guts of wood-boring insects – including termites, pine beetles, and cotton bores – which are highly efficient at turning wood into energy. In fact, it is not the insects themselves, but the bacteria and protozoa in the insects’ guts which are doing this work, said Gray. The hope is to harness these microbes to produce ethanol at a more efficient level than current technology allows.

Ethanol is an alternative fuel that can be easily combined with petroleum to create hybrid gasolines, which do not need new infrastructure. “What we’re talking about here is liquid transportation fuels,” said Gray. “There’s a lot of infrastructure in place to support those types of fuels.”

Current Products: Diversa has launched five new products this year. The lead product, Valley “Ultra Thin” enzyme, is used to convert corn into ethanol. The market potential for this enzyme is $150 million. The entire US ethanol industry is $11 billion, with more than 100 plants producing 5.5 billion gallons of ethanol in 2006.

Future Products: The company expects to launch new products that use more efficient enzymes — possibly mimicking termite gut microbes – which can convert biomass to ethanol, within the next five years.

How they got started in biofuels: “We had been working on biofuels for approximately eight years, and it was one of multiple programs that we were developing,” said Shonsey. “We are essentially specialists in harnessing the power of enzymes to create unique solutions and products. At the time, one of the areas that we thought we could effectively address was alternative fuels.”

“One year ago, we did a critical assessment of how we can better concentrate on that unique strength and what we can bring to development,” said Shonsey. “We came to the conclusion that the greatest benefit not only for shareholders and investors and the economic stability of the world was for us to address the biofuels industry. So it was an analytical, yet passionate decision for us.”

Philosophy: “We’re not a pure energy play,” said Shonsey. “The nice part about the alternative energy industry is that it is like a pharmaceuticals play; there are huge opportunities, if you can harness the power of the enzymes that we have in our library through unique technologies which come from biotechnology. And we are confident we can do that.”

Vision: “My vision for the company relates to being the best specialty enzyme company in the world that harnesses the enzymes of the world to come up with unique products and solutions that are also environmentally sound and positive,” said Shonsey.

“Our goal is to bring forward and launch biomass products within five years to complement the biofuels products we have today. We believe we can be profitable no only for our shareholders, but also improve the world we live in at the same time,” said Shonsey. “I’m passionate about it.”

Web: diversa.com

Follow Helen on Twitter @HelenChang

This article is part of a Green Energy series. Related Articles:

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