Former Codexis founder starts CO2-to-chemicals firm

| August 19, 2011

Russell Howard has a background in biotechnology as a chemist, a lab manager and a company creator. As a co-founder of the biorefining firm Codexis, Howard told Biorefining Magazine that he has been “humbled” when it comes to the chemicals business because, he said, “I’ve seen the success of Codexis and how hard it is to build a successful business model.” This hasn’t stopped him from taking on a new venture, Oakbio Inc., a California-based company funded by Howard’s own capital that has developed a microbe-based CO2 capturing and conversion technology that can produce a wide range of value-added chemicals and fuels.

After leaving Maxygen, a publicly traded company Howard helped start and run for 12 years—the same company that over time attracted several hundred million dollars in investment funds and sold an agriculture company to DuPont and also spun out Codexis—Howard teamed up with Brian Sefton and started Oakbio. Sefton’s background is in software and hardware. Howard said, “He is the inventor, he can build a piece of equipment with his own hands and write the software.” The duo worked together for 12 hours a day for two years before deciding that a microbe and gas-based technology was their best choice for commercialization, he said. During their first year, however, the team worked on a microbial fuel cell technology Howard said will someday be a part of every integrated biorefinery, but for now it “is a technology ahead of its time.” During the second year, the team looked at microbes that require only hydrogen and electrodes from electricity to survive, but they decided the technology was not ready to commercialize.

It wasn’t until the third year that they settled on autotrophs, an organism that only requires simple things to survive like CO2 and hydrogen. The microbes are actually called kenoautrophes, Howard said, microorganisms that haven’t been commercially explored and are a “microbiological curiosity.” Since settling on the microbes, the team has found a number of microbes that can convert waste flue gas from industrial sites into a large suite of products. The products range from caratonoids and pigments to low molecular weight diols to larger fatty acids. “At the moment,” Howard explained on their research of microbes, “we are working on a couple of these to see which one will make the best techno-economic sense.”

To do that, Howard said he is only a month away from tracking down series A financing from venture capitalists. “Our eventual goal,” he said of their overall approach, “is to have a suite of microbes, each of which is adapted to different gas streams.”

And because of the current testing methods employed by the small company, Howard believes the venture capitalists will be interested. The company has partnered with an undisclosed industrial host to test their microbes on-site and tweak the microbes for the greatest output. “The advantage of this is very large,” he explained, “having been there before in a whole range of projects, what you normally do is come up with a bright idea in the lab, test it with your business colleagues, then spend months and years on it and finally take it to the field.” And then, “It succeeds or fails.”

Howard said his advantage comes from the ability to come up with the idea, in this case a particular microbe, and go on-site at the place he would one day hope to do business at and test the microbe. Eventually, the company wants to be able to use a toolkit of microbe chemistry to introduce more efficient, or even new, pathways into the microbes to create the products.

The company isn’t the only one that has developed a technology that converts flue gases into chemicals or fuels, however. Howard knows this and has no problem with it. “Lanzatech,” he said, “I really admire that company. I think they are doing great things.” Howard noted the two companies offer different technology based on the preference of the microbes used to convert the flue gases. “Our bugs typically prefer CO2,” pointing out that LanzaTech’s bugs typically prefer CO. Part of his admiration for the New Zealand-based company is also related to the partnerships the company has formed. “It is a perfect match of an organism and a gas stream to an industry and a market,” he said of LanzaTech’s partnerships with the Chinese steel industry.

As a native Australian, he also explained what he sees of the relationship and why it will work. “I see 30 ships lined up outside the port of New Castle taking Coal to China, and I see a huge number of ships on the other end of the continent (Australia) taking iron ore dirt to turn into steel in China.” LanzaTech he said could end up with 10, 20 or even 30 partnerships in China. In another month, he also explained that his company will announce a major partnership with an industrial host, a partnership be believes “could also be a perfect match.”