How a biofuel dream turned into a nightmare
In the decade after its 2007 founding, Joule Unlimited made a lot of amazing claims about the future of fuel and raised a lot of money to try to back up those claims.
Joule was designing a system that would produce diesel fuel or gasoline using nothing more than the sun, carbon dioxide, water, and a genetically modified bacterium. It would be available for about $1.20 a gallon — without government subsidies. The Bedford company was set to begin construction of a 1,000-acre production plant in New Mexico this year. Joule’s tagline said that it was “solving the energy crisis with affordable, renewable clean fuel,” and the company managed to attract $200 million in financing from investors, including Cambridge-based Flagship Pioneering and the German carmaker Audi, which was eager to test Joule’s sustainable fuel.
Last month, though, the company auctioned off its New Mexico facility. Nearly all of the company’s 120 employees were laid off — the most recent round of job cuts happened in the spring — after Joule was unable to raise more money. Its investors are now looking for a buyer interested in the company’s patents.
When it comes to producing “biofuels” from natural substances that can compete on price with fuel extracted from the ground, “There’s probably no approach that’s new under the sun that somebody hasn’t attempted,” says Robert Rapier, an analyst who runs the website R-Squared Energy. “Billions and billions of dollars have been put in” by big oil companies and startups, without producing anything that you can actually put in your gas tank, he said.
Joule got its start in the offices of venture capital firm Flagship Pioneering, as a concept: What if you could take a kind of bacteria that is sometimes called blue-green algae, tweak a few genes, and get it to excrete fuel? “It was a major, major scientific endeavor,” Flagship founder Noubar Afeyan says, and one that involved academic collaborators such as George Church of Harvard and Jim Collins of Boston University, both cofounders of Joule. Because the bacterium that Joule was working with rely on photosynthesis to survive, a research paper published by the company’s founders in 2011 was headlined, “A New Dawn for Industrial Photosynthesis.”
Joule’s prized patent, #9,034,629, was issued in 2015 — just as the company was starting to fall apart. It covered the genetically modified bacterium Joule had developed, and a process for using it to feed off of carbon dioxide, sunlight, and water (including brackish or sea water) and produce fuel. The CO2 used by Joule’s process, incidentally, could be piped in from a factory that would otherwise release it into the atmosphere — a big environmental benefit.
But many observers, including Rapier, questioned Joule’s claims. “They were saying that they would produce 20,000 gallons of fuel using an acre of land,” he says. But he doubted those numbers, simply based on the amount of solar energy — one of the required ingredients for the Joule process — that falls on the surface of the earth. “Many people were very skeptical that they could pull off what they were trying to pull off,” Rapier says.
The company was trying to prove that what worked in the lab would also work at a larger scale, at first using a one-tenth of an acre system in New Mexico. And it was making ethanol first, rather than diesel fuel or gasoline, because that was an easier initial step. (Ethanol is blended into other fuels, rather than used on its own.)
The challenge of the work, Afeyan says, is that “you’re competing with a commodity. On one hand, you have a hundred billion gallons of something” like crude oil, and the production efficiencies that have accrued to that industry over a century, and “on the other hand, you’ve got a couple gallons” of a biofuel made in a custom-built, one-of-a-kind facility. “You have to show not just feasibility,” Afeyan adds, “but economic viability. It proved quite challenging.”
Making it even more challenging were oil prices — they plummeted in 2014, from $112 a barrel to about $60 a barrel by the end of the year. Prices continued to drop in 2015. That was also the year that it was revealed that Audi’s parent company, Volkswagen, had created software to enable its cars to cheat on emissions tests. That scandal, coupled with less financial pressure to look for alternatives to oil, might have scared off the bigger oil companies and utilities that Joule hoped would supply its next round of funding.
Joule attained a bit of momentary fame during the 2016 election cycle. John Podesta, Hillary Clinton’s campaign chairman, had served on the board of Joule from 2010 to 2014. During that time, the company accepted funding from Rusnano, a venture capital firm owned by the Russian government. Media reports questioned whether Podesta’s links to Russia had led to that investment from Rusnano, and whether Podesta had properly disclosed the stock he held in Joule when he joined the Obama administration in 2014, as an adviser to the president.
Afeyan says the Podesta controversy “was a completely irrelevant factor” in Joule’s ultimate fate, and that Podesta “was not a factor in Rusnano’s investment in Joule whatsoever.”
On Aug. 15, you could bid online to buy the equipment that Joule once hoped would coax bacteria into producing fuel in Hobbs, N.M., just a few miles from the Texas border. Back in April, laid off Joule employees sipped margaritas and shared nachos at the Border Café in Cambridge. One of them, John Longan, said that he “always felt surrounded by super-talented people who were experts in their field, and passionate about what we were doing. They wanted Joule to succeed, really wanted to have a positive impact.”
John Beneman, an expert on algae-based biofuels, notes that Joule isn’t an anomaly. “There are other companies out there that have raised hundreds of millions of dollars and come up with the same results — either they are walking dead, or ghosts, or resting in peace,” says Beneman, who is also chief executive of the consulting firm MicroBio Engineering in California.
Does Beneman believe it’s just impossible to use a genetically engineered organism to make an affordable, more sustainable kind of fuel, rather than extracting it from the earth? “I’m not saying it’s impossible, just that it requires long-term work,” he says. “There are a lot of technologies [that] take years or decades to develop, and get to the payoff.”
Ten years and $200 million later, we’re still not there.