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Summary Proceedings

The World Congress on

Industrial Biotechnology and Bioprocessing

Orlando, FL, April 21–23, 2004

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Summary Proceedings

The World Congress on Industrial Biotechnology and

Bioprocessing

©2004 BIO/ACS/NABC

Not for Sale

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Dear World Congress Attendees:

It is with great pleasure that I welcome you to the first ever World Congress on Industrial Biotechnol-ogy and Bioprocessing. This conference is the result of discussions that began about a year ago be-tween the Biotechnology Industry Organization (BIO), the American Chemical Society, and the Na-tional Agriculture Biotechnology Council. We think it important to bring together leaders from di-verse industries to highlight industrial biotechnology applications in manufacturing, agriculture pro-cessing, energy and chemical production and to provide a forum for information sharing and busi-ness development activities.

Industrial biotechnology is the “third wave” in biotechnology and, with advances in this fieldaccelerating, the need for education and collaboration is obvious. This new conference is designed tobe a significant step towards stimulating dialogue, collaboration and fostering the diffusion of indus-trial biotechnology throughout the manufacturing sector on an international scale. We hope to makeit an annual event.

For those of you who are unfamiliar with BIO, we provide advocacy, communications and busi-ness development services to more than 1,000 biotechnology companies and some chemical compa-nies, academic centers, and state and international biotechnology associations. Our six-year-old In-dustrial & Environmental Section represents over 50 innovative companies and organizations thatbring biotechnology techniques to large-scale manufacturing, chemical synthesis and bioremediation.You will meet executives from many of those firms over the next three days during breakout sessionsand workshops. They will articulate why industrial biotechnology is providing new tools to createeconomic value while at the same time enhancing environmental protection and sustainable develop-ment.

I am confident we will emerge from this event better informed and energized to harnessbiotechnology’s diverse tools for mutual economic and environmental benefit.

I look forward to meeting you and to forging new and productive relationships.

Carl B. Feldbaum

President

Sincerely,

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April 8, 2004

The National Agricultural Biotechnology Council (NABC), a consortium of 37 not-for-profit researchand/or teaching institutions in Canada and the United States, welcomes participants to the first WorldCongress on Industrial Biotechnology and Bioprocessing. We are pleased to be conference co-organiz-ers with BIO and ACS to link biotechnolgy, chemistry and agriculture to create new value chains.NABC has been a pioneer in expanding the vision of agriculture beyond food, feed and fiber to en-ergy, chemicals and materials. NABC focused its 2000 annual meeting in Orlando on “The BiobasedEconomy of the 21st Century: Agriculture Expanding into Health, Energy, Chemicals and Materials.”The panels and workshops at this Congress will document expanding national and international com-mitment and progress from research to product development and commercialization in the biobasedeconomy.

Ralph W.F. Hardy

President, NABC

National Agricultural Biotechnology Council419 Boyce Thompson Institute, Tower Road, Ithaca, NY 14853

Tel: 607-254-4856 Fax: 607-254-1242 E-mail:NABC@cornell.eduhttp://www.cals.cornell.edu/extension/nabc

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AMERICAN CHEMICAL SOCIETY1155 SIXTEENTH STREET, N.W.

WASHINGTON, D.C. 20036

(202) 872-4534

Madeleine Jacobs

Executive Director & Chief Executive Officer

Dear World Congress Attendee:

Welcome to the first annual World Congress on Industrial Biotechnology andBioprocessing. We at the American Chemical Society are proud to partner with theBiotechnology Industry Organization (BIO) and the National Agricultural BiotechnologyCouncil (NABC) on this first-ever meeting.

More than ever before, chemistry is deeply entwined with other disciplines, such asbiotechnology, engineering, physics, and computer science. The World Congress onIndustrial Biotechnology and Bioprocessing provides a unique forum for thosepractitioners working at this multidisciplinary frontier. We know this meeting willprovide you with valuable information, and, more importantly, with a valuable forum forinteraction and discussion. Personally, i view this meeting as a catalyst for change in thisimportant new field. We hope the meeting addresses your needs and the needs of thetechnology that it is meant to serve.

The American Chemical Society is the largest, single-discipline scientific society in theworld, with over 159,000 members. We provide a host of products and services tochemical professionals, from technical meetings and publications to education and careerservices. We also advocate on behalf of the profession, science funding, and education inthe sciences. It we can be of service to you, please contact me atexecutivedirector@acs.org .

Sincerely

Madeleine JacobsExecutive Director & Chief Executive OfficerAmerican Chemical Society

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The first World Congress on Industrial Biotechnology and Bioprocessing convened in Lake BuenaVista, Florida, April 21–23, 2004, jointly sponsored by the Biotechnology Industry Organization (BIO),the American Chemical Society (ACS), and the National Agricultural Biotechnology Council (NABC).Some 100 presentations were made in three plenary and four parallel “break-out” sessions, and tenworkshops were convened for discussion of ancillary topics. Over 400 attendees provided very posi-tive feedback—the congress was deemed an outstanding success and a second is planned for April20–22, 2005.

The chief organizers were Brent Erickson (Director, Industrial and Environmental BiotechnologySection, BIO), Peter Kelly (Manager, Industry Member Programs, ACS) and Ralph Hardy (President,NABC), who thank the World Congress Progam Committee for their invaluable assistance: DavidBransby (Auburn University), Doug Cameron (Cargill, Inc.), Bruce Dale (Michigan State University),David Glassner (Cargill-Dow), Jack Huttner (Genencor International) and Mahmoud Mahmoudian(Eastman Chemical Company). The success of the meeting was due in no small measure to the unflag-ging, careful planning of Lauren Lamoureux (BIO).

Special thanks are due the US Department of Energy’s Genomes to Life program for being a spon-sor of the congress and especially of this publication.

Without the excellent assistance of Sean Gorman (University of Florida), Erin Krause and ScottPryor (both of Cornell University) as recorders of the breakout sessions, and of Arvid Boe, WilliamGibbons, Kevin Kephart, Padu Krishnan and Vance Owens (all of South Dakota State University),Larry Drum (BIOLarry Consulting), Stephen Eule, John Houghton, George Michaels, Andrew Pater-son and Ari Patrinos (all of the Department of Energy), Paula DeGrandis (Cargill, Inc.), Lila Feisee(BIO), Marc Henniker (Strategic Decisions Group), James Hettenhaus (CEAssist), Blair Hughes(McDonnell, Boehnen, Hulbert and Berghoff), Michael Knotec (consultant), Richard Powers (Dorseyand Whitney LLP) and Jerry Warner (Defense Life Sciences) as moderators and recorders of the work-shops, this publication would not be possible. Page-layout work was by Susanne Lipari (NABC).

Foreword

Allan Eaglesham

Executive Director, NABC

Summary Proceedings Editor

October 2004

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Opening Remarks ........................................................................................................................ 1

Plenary SessionsCreating Bio-Sustainability in the Twenty-First Century .................................................. 3Industrial Biotechnology and Biomass:

From Awareness to Capturing the Value ........................................................................ 6Technotrends ............................................................................................................................ 6

Breakout SessionsTrack 1: Manufacturing and Synthesis ................................................................................. 7Track 2: Bioprocessing of Agricultural Feedstocks .......................................................... 12Track 3: Sustainability Issues ............................................................................................... 16Track 4: Novel Applications ................................................................................................ 20

WorkshopsPositive and Negative Impacts on Agriculture Feedstock Utilization .......................... 25State and Federal Funding Opportunities for Biomass Energy and Biomass Projects 27Doing Business with the Department of Defense ............................................................ 28Overcoming Barriers to Growing a Biobased Economy ................................................. 29Using Industrial Biotechnology to Improve the Bottom Line ........................................ 30Building a Biobased Economy: Policy and Financing Challenges ................................. 30Patent Protection and Patenting Stategies for Industrial Biotechnology Inventions .. 31DOE Genomics—The GTL Program and BIO—Forging a Critical Partnership in

Industrial and Environmental Biotechnology .............................................................. 33Identifying and Overcoming Barriers to the Diffusion of Industrial Biotechnology

in the Chemical Industry ................................................................................................. 34

Contents

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1

Opening Remarks

In his opening remarks, Carl Feldbaum remin-ded the audience that the first BIO annual meet-ing a decade before attracted an audience ofabout 500—similar to that assembled for this firstWorld Congress. He predicted that interest inindustrial biotech will grow quickly and thatWorld Congress attendance will increase, with-in ten years, to the current number participat-ing in the main BIO annual meeting, approxi-mately 15,000.

Feldbaum offered three pieces of advice. First,he stressed the need to develop biotech prod-ucts that directly benefit consumers. Agricultu-ral biotechnology’s focus on the farmer has ledto the anti-biotechnology sentiment so prevalentin Europe and to a lesser extent here in the Uni-ted States. Rather than risk more “seismic shocks”in the future, he suggested that effort be exertedin reaching out to the public to anticipate hownew products will be received.

Secondly, he suggested that possible contro-versies over safety and ethical concerns raisedby new technologies and products should bedealt with honestly and transparently. He re-called that, in the 1970s, scientists and policy-makers alike worried about the safety of gene-tic engineering and openly established self-regu-latory protocols—to develop the technologysafely—which proved in due course that thetechnology is safe. Now high-school studentsdo recombinant-DNA experiments. Not onlysafety, but also ethical issues have also been ofconcern. Today, all of BIO’s members adhere toa strict bioethics code. Industrial biotechnologyhas received little public scrutiny and almostall media coverage has been positive. Yet a mis-step could change things overnight. Dolly thecloned sheep came as a surprise and discussion

developed—almost overnight—from the clo-ning of animals to the cloning of humans. Thisglobal ethical sensation surpassed media atten-tion to the first moon landing. Similar reactionsare possible to products currently under devel-opment, and it is important that they be consid-ered in advance and accommodated. For example,gene-assembly technology is being developedfor the creation of microorganisms. Experimentsshould be planned with an eye to how the pub-lic may receive them; consideration should begiven in advance as to how to reach out tobioethicists, NGOs, etc.

Thirdly, Feldbaum suggested reaching outto the agriculture and environmental commu-nities. They are economically and politicallypowerful groups and potentially invaluableallies in earning government support for R&Dand in gaining market and public acceptancefor products. Although benefits from industrialbiotech may seem obvious, its broad potentialis still missed by sections of the media: they donot see it as their beat. But their beat will expand.Industrial biotech has already garnered cover-age in the trade and national media. Like biotech-nology as a whole, it will move from the sciencecolumn to the business page to the front page.Fundamental to this is the establishment of apositive reputation. “Today’s public opinion,though it may appear as light as air, may betomorrow’s legislation, for better or worse.”

With industrial output in populous nations,such as China and India, growing rapidly, newtechnologies are desperately needed to enablesustainable growth. At this stage, biotech-nology’s greatest uses are in medicine and agri-culture, but its greatest long-term impact maywell be industrial.

Carl Feldbaum, President of the Biotechnology Industry Organization (BIO)

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Plenary Sessions

Opening Plenary Session: Creating Bio-Sustainability

in the Twenty-First Century

Rick Oliver (American Learning Solutions), Patrick Moore (Greenspirit), David Morris (Institute

for Local Self-Reliance)

Rick Oliver began by asking, “Which is smarter,a personal computer or an ear of corn?” He re-turned to the question later. All products andtechnologies follow a predictable cycle—an S-curve—from inception through growth to matu-rity to decline. This cycle applies also to groupsof technologies that characterize an economicera. Seven thousand years ago, the plough ledto the growth phase of the agrarian age; the in-dustrial age started in the eighteenth centurywith the harnessing of energy. In Oliver’s opin-ion the information age began in 1947 with theinvention of the transistor, which led to the deve-lopment of the computer chip.

The strategic inflection point—the beginningof the growth phase—causes individual products,whole technologies and economies to move fromone phase to another. In the industrial age, inflec-tion points occurred with the steam engine, theharnessing of electricity, and the jet engine. Lan-ding on the moon marked the maturity of theindustrial age: energy, rather than computerpower, underpinned Apollo 11. Inflection pointswithin the information age were marked by thetransistor, the computer, and the Internet. Oliversuggested that the Internet is to the informationage as the moon-landing was to the industrial.If so, we stand at the beginning of a new eco-nomic era, for which he has coined the word“bioterials” (biotechnology / materials). Bio-terial developments will affect everything inthe economy: the environment, energy, infor-mation and, most importantly, manufacturing.

Each era is driven by a key technology: theplough for the agrarian age, plastics for the in-dustrial age, the personal computer for the in-formation age, and now it is protein. Key inflec-tion points within the bioterials age can alreadybe seen: healthcare, then agriculture and finally—the greatest from an economical point of view—industrial biotechnology. Oliver suggested

that the global scope of each bioterial productwill be inversely proportional to its size; thesmaller the technology the greater its potentialeconomic impact. The bioterials age will lastabout 25 years and its global economic impactwill be greater than those of the agrarian,industrial and information ages combined.

In every other economic era, benefits havecome at the end, e.g. the moon landing and the$300 personal computer . In contrast, benefitsfrom biotechnology are already accruing. Ittook 70 years for railroad managers to acceptdiesel engines and it took 10 years for businessmanagers to accept PCs, whereas it took farm-ers just 2 years to accept Bt corn.

Rather than being seen as the “bad guys,”in due course bioterial industrialists will beviewed as protectors and enhancers of theenvironment.

Value creation will be transformed from thephysical to intellectual. The information con-tent of the bioproduct will eclipse its physicalvalue. It will be the most information-rich tech-nology known to humankind.

The number of people attending this meet-ing reflects that we are already in the growthphase of the bioterials S-curve—about 10% ofindustrial producers are moving to bio-relatedtechnologies. There is no time to waste! Asimple ear of corn will prove to be so smart asto make the PC look lame. The PC simplyprocesses whereas protein creates, which is aneconomic miracle.

Patrick Moore first heard the term “sustainabledevelopment” in 1982. It was a compromisebetween environmentalists from industrialcountries and environmentalists from develop-ing countries. The term—meaning develop-ment that is environmentally sustainable—came into general use 5 years later with the UN

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Brundtland Commission report on the environ-ment and development, which provided apicture of a sustainable future for society andthe world economy. The word “biodiversity”was coined also about twenty years ago; sincethese terms entered the lexicon, it is notewor-thy how far we have progressed in our think-ing, our actions and our environment.

Sustainable development is a relative con-cept. There is no such thing as a perpetuallysustainable state; things change all the time.Sustainability is actually an on-going process.Even as the sun is not indefinitely sustainable,neither is any species. W e must change ourperspective from six-months to a 50- to 100-year period and be aware of the implications ofwhat we are doing now for the distant future.Sustainable development involves balancingthe environmental, economic and social fron-tiers.

A weakness of the environmental movementis that it is fixated solely on environmental con-siderations, almost as if the 6 billion on earthdo not exist and do not continuously needfood, energy and materials. However, sustain-able development tries to incorporate envi-ronmental values with social and economicpriorities that influence decision-making atthe highest level and on a personal basisdaily. Therefore, sustainability is a balancingact rather than a single issue: maintaining andimproving our civilization—including makingmore energy and materials available for peoplein the developing world—while reducing ournegative environmental impact. To many in theenvironmental movement, these goals aremutually exclusive.

It has been claimed that, because Americanson average use eighty times more material andenergy daily than people in some developingcountries, they have a commensurate negativeimpact on the environment. In fact, the wealthi-est countries have the strictest regulations andthe cleanest environments. Human activity isnot necessarily bad for the environment: it ispossible to improve our lifestyle and culturewhile reducing the environmental impact, andindustrial biotechnology has an important roleto play in this regard. It can help sustainabilityin a number of ways. The single greatest con-tribution will be in transportation fuels,

which, being non-renewable, constitutes oneof the most difficult components of sustain-able development. National security issues arealso involved, in terms of our dependence onunstable countries for oil. Attention should befocused on fuels made from biomass and onimproved fuel efficiency through hybrid tech-nologies. Hydrogen-powered transportationhas a 25- to 50-year time frame; the next phasewill be gas-electric and diesel-electric technolo-gies, followed by biofuel hybrids.

Moore is “big on trees.” Agriculture produc-tion has come at the cost of forest coverage, albeitthat the same area of forest exists in the UnitedStates today as 100 years ago. We are growingfive times as much food on the same area ofland as 50 years ago. Thus, campaigns of environ-mental activists against genetically modified(GM) crops are misguided in declaring that theforests can be preserved while we return toless-productive organic farming.

Trees have tremendous potential as a feed-stock source for cellulose, hemicellulose andlignin. Rather than clearing land for agriculturalcrops, we should develop ways of using treesto keep the land forested. In a 10-year rotationtree farm, at least 90% of the land is tree-coveredwhile 10% is harvested every year, thus alsoproviding an environment favoringbiodiversity. “Trees are the answer.”

It is unfortunate that the organic farmingmovement is aligned with the environmentalistanti-GM stance. The fact is, genetic engineeringis a purely organic science that should have beenembraced by the organic farmers. They use seedvarieties produced by chemical and nuclear muta-genesis, yet refused the much more precise,100% organic method: genetic engineering.

By embracing the precautionary principle,environmental activists do not have to demon-strate harm to lobby for banning something. Therehasn’t been a single stomach ache from GM food,yet environmentalists have a zero-tolerancepolicy—even with respect to golden rice, with itspotential to prevent blindness in vitamin-A defi-cient children in developing countries.

Despite this irrationality, the industrialbiotechnology industry must engage the en-vironmental movement. The best approach isin long-term forums, e.g. in a round-table for-mat, that include people from many walks of

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life so that the environmentalists are exposed todiverse opinions. One-on-one negotiations oftenachieve little because their objective is to main-tain confrontation.

In a recent verbal presentation, author MichaelCrighton stated that environmentalism has be-come a religious movement, no longer based onscience and logic. They believe that genetic en-gineering is bad, and their influence includesAfrican countries that refused GM maize as foodaid even though it is sold there as cornflakes andmany other processed foods available on super-market shelves to the wealthy—“better dead thanGM-fed.” Hopefully, industrial biotechnologywill avoid such entanglements and will live upto its tremendous promise for the betterment ofhuman welfare and environmental health.

David Morris stated that 150 years ago indus-trial economies were based on carbohydrates.In the United States in 1820, 2 tons of plantmaterial were consumed for every ton of mine-rals. The chemical industry was based on twowaste materials: tar from coal and linters fromcotton. There was parallel growth between thebiotech industry and the petrochemical indus-try in the nineteenth and twentieth centuries.Even before the civil war, ethanol made fromgrain was the country’s best-selling chemical,used for fuel and other purposes. The first plas-tics were made from cotton. Cellanese is a con-traction of “cellulose” and “ease” (of use). Cellu-lose was the basic ingredient in film synthesisand is the origin of the word “celluloid.” Themain problem in the nineteenth and early twen-tieth centuries was largely self-inflicted, whenpublic policy applied hobbling taxation and thenbanned the production of the commodity chemi-cal that was the basis of the biotechnology in-dustry: ethanol. Thus, fifty years of chemicalengineering development were thwarted. Even so,in the late 1930s and early 1940s, the first injec-tion molded plastics were made from celluloseacetate. In World War II, rubber was synthesizedin breweries.

Plastics made from soy in the 1940s gaveway to plastics synthesized from petroleum inthe 1960s, and by the mid-1970s, 8 tons of mine-rals were being consumed for each ton of plantmaterial in the production of chemicals, i.e.97% were produced from petrochemicals and

only 3% from plants. Since then, there has beena turn-around: 2% of our transportation is runon biofuels, 5% of industrial chemicals are frombiological sources, and 3% of our electricity isfrom biomass. “We are at the end of the begin-ning,” and agriculture will be the key to the carbo-hydrate or biobased economy. Two to three timesmore plant matter will be needed. Farmers willneed to be involved in true partnerships—en-abled by state and federal policies—includingthose in developing countries.

In the United States, ethanol production hasincreased enormously in the past 5 years,increa-sing the price of corn by eight to tencents per bushel. However, if the farmer owns ashare in the ethanol plant, then (s)he will earnextra dividend from the sale of the final prod-uct. In Minnesota a policy was created, similarto that of the federal government in the early1980s, to have a state excise tax exemption, likethe federal excise tax exemption, which createda market but did not significantly help thefarmer—the ethanol was transported to largeADM plants in Illinois and Iowa. In the mid-80s the incentive—$0.20/gallon—was changedto favor the producer rather than the consumer;the incentive applied only to production ca-pacities of up to 15 million gallons/year. Ashoped, ethanol-producing plants sprung up—fifteen in Minnesota—with capacities of up to15 million gallons; they produce 10% of the UStransportation fuel, and have the capacity for25%. As a result of competition among theseproducers, efficiency has increased and price ofethanol has decreased. Nine thousand farmer-partners in Minnesota now profit from the saleof the ethanol as well as of the grain. Thus,when we think about industrial biotechnologywe must also think about how it integrateswith agriculture. If farmers view a new effort asanother industry gimmick, they will not buyinto it.

Morris drew a distinction between changeand progress. The former occurs whether wewish it or not, whereas the latter comes onlyby changing policies to channel our scientificingenuity and entrepreneurial energies indirections that are compatible with society’sneeds and values.

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Second Plenary Session:

Industrial Biotechnology and Biomass: From Awareness to

Capturing the Value

Currently, 5% of industrial chemicals are bio-based: alcohols, amino acids, vitamins, pharma-ceuticals, and special chemicals. This may in-crease to 10% by 2010; it could even go to 20%,depending on feedstock prices, consumeracceptance, government policies and support,and investment levels. (Riese’s earlier “bullish”projections for 2010 have become somewhatless aggressive.) The field is taking off at thistime because hundreds of enzymes are available—it takes only weeks to develop a new one—andbecause yields are higher and costs are lowerwith biological systems. Biological systems con-tribute to sustainability, particularly from theenvironmental standpoint, e.g. fewer and loweremissions including greenhouse gases. Costadvantages include lower capital investment.

Biotechnology holds particular promise forpolymer production. Development of novelpolymers from petroleum peaked in the 1950s,yet new polymers continue to be needed. Thenew polymers produced from lactic and succi-nic acids are good examples of what is possible,

but monomers must be produced at low cost:waste biomass holds potential with conversionto fermentable sugars—renewable and eco-friendly.

Iogen in Canada, the world’s first biorefi-nery, is now fully operational, convertingcellulosic material—wheat straw—into etha-nolfor blending with gasoline. With modifi-cations, production costs could fall to 50% ofwhat they are today. By 2010 bioethanol willconstitute 6% of transportation fuel used inEurope, and it is expected that 50% of finechemicals will be biobased. Also three-foldmore bulk chemicals will be biobased than today.

Challenges include determining how andwhere to compete, identifying the right oppor-tunities, managing a portfolio of costly andrisky R&D projects, and market developmentis often underestimated in terms of complexityand time required. Riese recommendedjoining forces with complementary entities tocreate favorable consummer perceptions andregulatory boundary conditions.

Daniel Burrus (Burrus Research Associates, Inc.)

Third Plenary Session: Technotrends

To ensure a sustainable planet even as the Chi-nese give up bicycles for automobiles, wehave to work beyond personal and organiza-tional egos. Cooperation to make the piebigger for all will entail collaboration andcommunication. Biotechnological progress isin the “big deal” phase as a result of the

Jens Riese (McKinsey and Company)

availability of computers for genomics work.We need to tell the right story to sell it. Aproblem is an opportunity when you see itcoming; we must identify the real problems tochange the role of chemicals/materials/energy industries, not only with technologybut also with integrity.

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Breakout Sessions

Track 1: Manufacturing and Synthesis

Enzyme Development for Bioprocessing

Applications

Philippe Soucaille (Metabolic Explorer), Reinhard

Rosson (Bio-Technical Resources), Richard

Burlingame (Dyadic International)

An efficient, low-cost method for the productionof pharmaceuticals and chemicals in a con-tinuous culture has been developed. MetEvol,an in vivo molecular technique, takes advan-tage of the rapid growth rate and high naturalmutation frequency of microorganisms: recom-binations are not enhanced via other methods.Examples of MetEvol include glycerol productionin E. coli, evolution of a methionine pathway inE. coli, and evolution of NADPH-over-producingstrains. Since microorganism growth rate is fast,pathways can be enhanced or newly developedin only a few months.

Fermentation processes for the productionof glucosamine and N-acetylglucosamine arebeing developed with metabolically engin-eered strains of E. coli. Glucosamine, used totreat osteoarthritis in humans and animals, iscurrently manufactured from chitin, which isallergenic for some. Over-expressing the geneand reducing feedback inhibition led to a 200-fold increase in glucosamine production in shakeflasks. Since glucosamine is unstable at neutralpH, the focus was shifted towards the produc-tion of N-acetylglucosamine, which can be easilyconverted to glucosamine.

An integrated technology platform has beendeveloped for gene discovery, gene expression,and protein production in the fungus Chryso-sporium lucknowense. Seventy thousand clonescan be screened weekly. The system has manyadvantages, including efficient intron proces-sing, no hyperglycosylation, high transforma-tion efficiency, high levels of protein production,amenable laboratory conditions such as no well-to-well contamination and no clogging, alongwith versatile fermentation conditions such asa broad pH range, low viscosity, wide temper-ature range, and short time cycles. Using a single

strain host system for gene discovery and expres-sion allows a more streamlined, efficient approach;the probability of success is increased, and isgenerally more cost-effective. Products are beingdeveloped to serve the nutrition, pulp andpaper, and pharmaceutical industries, amongothers. Currently an endoglucanase and a beta-glucanase are on the market

Advanced Biocatalysis in the Chemical

Industry: Fine Chemical and Pharmaceutical

Production

Mahmoud Mahmoudian (Eastman), Robert

DiCosimo, (DuPont), Ramesh Patel (Bristol-Meyers

Squibb), Mani Subramanian (Dow)

Biocatalysis is increasingly being used in thepharmaceutical industry to produce chemicalbuilding blocks and intermediates. Since manycompounds under development in the pharma-ceutical sector are chiral and pose significantchallenges for industrial production, the indus-try has begun to outsource much of this workto the biotechnology and academic sectors. Oneexample of a collaboration that has emergedfor the production of a bioproduct from bio-catalysis is Cargill-Dow LLC, which producespolylactic acid from corn and other plants.

DuPont is developing biocatalytic processesthat include the following steps: prediction ofexpected market volume over time, calculationof fermentation requirements, identification ofcontract manufacturers, calculation of produc-tion costs, optimization of the process for avai-lable equipment, and preparation of a smoothtechnology-transfer package. Biocatalyses areunder study for production of the pharmaceu-tical intermediate (R,S)-1, cis-4-hydroxy-D-proline, 5-cyanovaleramide, the industrialsolvent dimethyl-2-piperidone, and 3-hydroxy-alkanoic acid for the synthesis of co-polyesterpolyols. These had significant manufacturinghurdles using chemocatalytic methods, whereasbiocatalytic methods—entailing optimizationof enzyme selectivity, stability, or specific acti-

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vity, reduction of waste streams, or enhancementof reaction productivity—enable cost-effectiveproduction. Some recombinant microbes arebeing used, but only if wild-type strains fail tomeet economic goals. The screening is donewith high-throughput assays and colorimetry.

Biocatalysis using, for example, E. coli (inwhich enzymes are expressed in large amounts)for the production of chiral pharmaceuticalintermediates has clear advantages over chemi-cal routes, including stereoselectivity of bioca-talysts, increased yields, ambient temperature,waste minimization, and reusability of bio-catalysts. This approach is being used to producekey intermediates for the development ofdrugs for the treatment of Alzheimer’s disease,hypertension, and AIDS. The use of gene-tically modified organisms has led to evengreater yields.

In an initiative to develop new specialtyproducts for pharmaceutical and agriculturalapplications, Dow set out to enzymically hyd-rolyze DOWANOL PMA into pure enantio-meric forms using lipase B from Candida ant-arctica. Maximizing substrate loading andminimizing enzyme loading while optimizingother process parameters established a cost-effective process. Potential added-value app-lications include chiral solvents for asymmetricsynthesis and chromatographic separation.

Biocatalyst Engineering for Synthesis of

Pharmaceutical Intermediates

Gjalt Huisman (Codexis), Jim Lalonde (Altus), Wen

Chen Suen (Schering-Plough Research Institute)

Using evolution technology developed byCodexis, biocatalysts can be developed withincreased volumetric productivity, yields,and/or ability to withstand higher substrateloading than their native forms. The platformprovides rapid, practical, and clean, econo-mically feasible processes. It can be applied tosingle genes, operons, or entire genomes.DNA-family shuffling is used to make therecombinant libraries, and screening is per-formed to select mutants that are more activeand/or less product-inhibitive. It has beendeveloped for nitrilases, lipases, and keto-reductases. As a model for the system, theactivity of glucose dehydrogenase has beenincreased. Since many of the changes made to

the enzymes are far from the active site, it ispresumed that many of the improvementsresult from changes in tertiary structure.

In an attempt to develop a practical bioca-talytic pharmaceutical process, Altus hasfocused on the utilization of cross-linkedenzyme crystals (CLEC) for the bioconversionof substrates to usable end-products. TheCLEC approach has many advantages, inclu-ding increased enzyme stability, recyclability,lower cost, a highly porous network (maxi-mizing surface area), and the ability to catalyzereactions in organic and mixed aqueous/orga-nic media for the production of a broad arrayof catalysts such as antibodies and therapeuticenzymes. TheraCLEC lipase, an oral drug thatsurvives the low pH in the stomach, is nowentering large-scale trials.

Error-prone PCR and DNA-family shuff-ling of homologous lipase B genes were usedsuccessfully with Candida antartica to createa variant with increased thermostability andimproved activity (increased kcat).

Federal Policy and Programs for Biorefinery

Development

Doug Kaempf (US Department of Energy), Roger

Conway (US Department of Agriculture), Lee Lynd

(Dartmouth College)

In an effort to decrease US dependence onforeign oil, the Department of Energy imple-mented the Biomass Research and Develop-ment Act of 2002 and created the BiomassResearch and Development Initiative, amulti-agency effort guided by a technical ad-visory committee that aims to accelerate bio-based industrial development. This initiativeprovides funds for research to overcome thetechnological barriers to the development ofbiobased industries, specifically in the areas ofbiomass harvesting, storage, and collection.Other challenges associated with the emer-gence of a biobased economy are process inte-gration, risk, and attracting investors. The DOEis also building industrial linkages with theforest and petroleum industries, in an effort totransform them into more sustainable, bio-based entities. Twelve fundamental chemicalshave been identified that can be produced bybiobased processes.

The Energy Title of the 2002 Farm Bill, and

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specifically Title 9, creates new opportunitiesfor agriculture and for biobased products,power, and other renewable resources. Inclu-ded in Title 9 are initiatives such as a federalprocurement program for biobased products, aprogram to develop applications for hydrogenand fuel-cell technologies co-sponsored by theUSDA and the DOE, and incentives for pro-duction of bioethanol and biodiesel. Compe-titive grants for biorefinery development, bio-diesel fuel education, renewable energy andenergy efficiency, and biomass research anddevelopment are included. The Energy Titleincludes programs for rural development, mar-keting and regulatory programs, farm and for-eign agricultural services, research, education,and economics, as well as on natural resourcesand the environment. The USDA encouragescooperative participation from farm communitiesin the development of biobased businessendeavors.

Developing a biobased economy will be vitalfor a sustainable and energy-secure future forthe United States. Many fuels and non-energyproducts like animal feed, pulp and paper, andorganic chemicals and polymers can be producedfrom renewable feedstocks such as corn andswitchgrass. A high-impact scenario wouldinclude co-producing animal feedstock andcellulosic material for energy production, requiringno more land than is currently being used, andlargely displacing US dependency on foreignoil. Highly productive crops, cost-effective andefficient processing of feedstocks, and fuel-efficientvehicles would be key parts of this scenario.Decreased air pollution from biobased fuels incomparison to petroleum-based should beconsidered in dollar form as a component ofthe economics. The Role of Biomass in America’sEnergy Future project was initiated to acceleratebiomass use in our economy by identifyingpotential ways to integrate current knowledgeand promote innovation.

The State of Industrial Biotechnology in

Europe

Colja Laane (DSM Food Specialties), Dirk Carrez

(BelgoBiotech), Kirsten Staer (Novozymes)

Due to the growing demand for innovationin the field of white biotechnology, centers forpublic-private partnerships (PPPs) have been

established in the Netherlands: collaborationsbetween industry and academia that attempt tobridge the gap between the short-term researchand development that traditionally occurs inthe private sector and the long-term R&D thattraditionally occurs in the public sector. Twocenters for PPPs now exist in the Netherlands:the Kluyver Center for Genomics of Indus-trial Fermentation, which focuses on micro-bial genomics, and Biobased SustainableIndustrial Chemistry (B-Basic), which createsprograms for the biobased production of bulkand fine chemicals and supports research onnovel feedstocks. These centers aim to trans-late new knowledge into products to furtherboost white biotechnology industry in theNetherlands. Companies and other interestgroups in other European nations can join theNetherlands PPPs; however, increased feesmay be required. Academia/industry partner-ships are fostered when a defined researchagenda is followed with appropriate funding.

Europe is the world’s largest chemical pro-ducer, at one third of global production.Belgium generates 17% of Europe’s chemicalexports. The 2004 Industrial Biotechnologyand Sustainable Chemistry Report publishedby the Royal Belgian Academy Council ofApplied Sciences cited many public-policyrecommendations that will facilitate a smoothtransition to a biobased economy. Theserecommendations include more governmentalsupport, more support for multidisciplinaryresearch, attention to critical mass for R&D,promotion of knowledge and awareness ofindustrial biotechnology, development ofpolitical and fiscal support measures, lesstaxation of bioenergy, and the promotion ofmarket penetration of sustainable bioproductsand bioprocesses. In addition, the BelgianInterdisciplinary Platform for Industrial Bio-technology was created with distinct taskforces charged with creating visibility andawareness, and facilitating ease into marketsfor areas such as biomass, bioprocesses, manu-facturing and wastes, bioenergy, andbioremediation.

White biotechnology represents a growingindustrial base throughout Europe. Geneti-cally modified organisms are increasinglyused for the production of enzymes and vita-

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mins. Enzymes are used to improve the qua-lity of consumer products and food, and inthe pulp and paper, textile, and leather indus-tries. In contrast, concern remains over thesafety of genetically modified foods, due to ageneral fear of biotechnology, distrust of autho-rities and industry, moral and ethical concerns,and the lack of choice for consumers. New,stricter regulations have been introduced requi-ring transparent labeling on all food and feed.Although labeling requirements are a steptowards ensuring the safety of Europeanconsumers, more needs to be done to educatecitizens about the potential benefits of biotech-nology. Communicating to the public theeconomic and environmental advantages ofusing renewable resources and creating biode-gradable products will be the key to the successof the biotech industry.

Federal Programs for Chemical Platform

Development

Todd Werpy (Pacific Northwest National Laboratory

on behalf of the US Department of Energy), Diza

Braksmayer (Cargill), Patricia Nugent (Dow)

The goal of the Department of Energy’s EnergyEfficiency and Renewable Energy Office of BiomassProgram (OBP), is to partner with industry tofoster research in biotechnology. The developmentof an integrated biorefinery still has many barriers.The OBP is strategizing to overcome these obs-tacles by providing analysis and research in sixprogram areas: a feedstock interface, a sugar plat-form, a thermochemical platform,products,inte-grated biorefineries, and program management. Byassessing the petroleum industry and its abilityto make many products from a few base com-pounds, the OBP has come up with a top-ten listof products that can be made from sugars andfurther transformed to myriad biobased items.Additional studies are underway assessing thepotential for producing value-added productsfrom oils and lignin. These products will bekey to the economic viability of the integratedbiorefinery.

In an initiative to create new value chains,Cargill is assessing the use of crops to producenew carbohydrate feedstocks that can be inte-grated with downstream activities and minimizeoverall processing costs. 3-hydroxypropionicacid (3hp), which can be made by anaerobic

fermentation of sugars, serves as an intermediatefor the production of many other organic chemicalssuch as polyesters, monoesters, acrylic acid,1,3-propanediol, as well as acrylamide andhydroxyamides. 3hp has many direct uses inapplications like water treatment where it hasseveral distinct advantages over current products:it is less corrosive than citric acid due to a higherpKA, less toxic, water soluble, noncrystallizing,and has a great capacity to solubilize mineralsalts. Applications of 3hp include use as a scaleremover and corrosion inhibitor for boilers,heat exchangers, cooling and condenser systems,and water pipes, and as an ingredient in personalcare products for anti-aging, skin lightening,moisturizing, dermatological conditioning, cos-metics, shampoos, and hair coloring. Cargill isparticipating in a jointly funded effort with theUS Department of Energy to develop 3hpproducts.

In conjunction with the US Department ofEnergy, Dow is attempting to develop new, sus-tainable feedstock platforms for chemical produc-tion. These products must have characteristicsthat meet short- and long-term goals in termsof economic viability and sustainability. Currently,Dow is partnering with the US Department ofAgriculture and Castor Oil, Inc., to develop newoleochemical products from castor plants.Castor serves as a model industrial cropbecause it is already a well established agri-cultural product, has well characterized lipidbiochemistry, can grow on marginal landwithout a lot of water, and produces an abun-dance of cellulosic biomass that can be used inother biotech applications. The current researchfocus is on new catalyst synthesis and screen-ing and process chemistry.

Biocatalyst Developments in Academia

John Frost (Michigan State University), Lonnie

Ingram (University of Florida), Michael Flickinger

(University of Minnesota)

The use of renewable resources in combinationwith microbial catalysis can provide a sustain-able alternative to chemical means of conver-sion of nonrenewable resources. By manipulat-ing native microbial metabolic pathways andintroducing foreign genes, it is possible tomaximize the number of chemicals that can bemade in a sustainable fashion. Microbial path-

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ways have been exploited to produce shikimicacid and amnoshikimic acid, 1,2,4-butanetriol,and Nylon66, illustrating the diversity ofchemicals that can be so produced.

If biobased industries can address globalwarming and CO2 issues, chemicals made fromrenewable resources may count as CO2 credits.This needs to be addressed on national and inter-national levels. Ultimately, it may be desirableto produce materials that are not biodegradableto act as sinks for carbon.

The United States imports over half of itspetroleum needs, the majority of which is fortransportation purposes. There is a growingneed to replace petroleum with renewable feed-stocks and to become more energy-efficient. Withconversion to ethanol, lignocellulosics—of whichthere are diverse sources such as pulp mills,agricultural and forest residues—could supply20 to 30% of US fuel uses.

Lignocellulosics can be broken down intopentoses and hexoses. Few microorganismsdegrade both 5-C and 6-C sugars, thereforerecombinant strains of E. coli have been pro-duced that co-degrade pentoses and hexoses,and exhibit increased rates of glycolytic flux.Large-scale microbial conversion of ligno-cellulosics to ethanol is not yet commerciallyviable. Developments in areas such as pre-treatment of lignocellulosic biomass, harvest-ing technologies, and byproduct uses arerequired to justify construction of bioconver-sion plants.

Biocatalytic coatings present an alternativeto whole-cell biocatalysis. These coatings arethin, porous, and contain 50% (v/v) of non-growing metabolically active microorganisms.An example of one of the many applications ofthis technology is the use of inkjet printers toprint microbial cultures directly onto Petri dishes,which will later be replaced with continuoustapes. The first commercial applications of thistechnology are expected to be as a means ofsupplying microbial cultures, and as photo-trophic coatings for the production of gases suchas hydrogen. Fermentors will still be requiredfor the initial production of the cultures.

Development of New Biofactories

Tim Dodge (Genencor), Mark Finkelstein

(National Renewable Energy Laboratory),

K.T. Shanmugam (University of Florida)

The petroleum refinery is an extremely flexiblefacility. To replace the current petroleum-basedeconomy with a biobased economy, it will benecessary to mimic this flexibility in the designof biorefineries. A wide array of organisms pro-duce amylases or glucoamylases for the con-version of starch; however, few organismspossess the ability to effectively convert cellu-lases and hemicellulases to useful products.New biocatalysts are needed that can withstandthe high-temperature environments of ligno-cellulosic saccarification and are simultaneouslyable to ferment the resulting sugars into products.Simultaneous saccarification and fermentationof lignocellulosic material will dramaticallyreduce the cost of the bio-conversion process.

The transition from a petrochemical basedeconomy to a bioeconomy presents significantchallenges. The intrinsic characteristics of bio-mass in comparison with petroleum impartdistinct obstacles. Biomass has a low energybulk density, is widely dispersed, is not alwayseasily transported, and there is no infrastructureto develop a biobased economy from wheatstraw, corn stover, etc. However, biomass doeshave a major advantage: a potentially large,sustainable supply. The integrated biorefinerywill make use of a thermal conversion path-way (producing syngas, heat, power, and elec-tricity), a biochemical conversion pathway(producing sugars that can be converted to avariety of fermentation bioproducts) and exis-ting technology. In terms of technologicaldevelopment, the following areas need atten-tion: pretreatment of lignocellulosic material,cellulase enzymes, fermentative strains, sacc-arification/fermentation configurations, feed-stock collection, and lignin utilization. Thesechallenges represent unique opportunities forindustrial development in the biomass area.

Renewable resources such as lignocellu-losics represent above-ground sources of car-bon to displace below-ground sources such asoil. Lignocellulosic material must be depoly-merized into sugars before it can be fermentedto valuable end-products. Fungal cellulasesare capable of depolymerizing cellulose athigh temperatures to pentoses and hexoses. Thebiocatalysts that convert these sugars are nottypically able to withstand high temperatures,

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Track 2: Bioprocessing of Agricultural Feedstocks

Overcoming Barriers to Production, Harvest and

Utilization of Biomass Feedstocks for Produc-

tion of Bioethanol and Biobased Products

David Bransby (Auburn University), Tom Schechenger

(Schechenger Consulting), Mark Downing (Oak Ridge

National Laboratory)

Herbaceous biomass crops for energy produc-tion must be competitive with fossil fuels as afeedstock and with existing food, fiber, and feedcrops, all of which are subsidized through variousmeans. The easiest and most likely policy chan-ges that will allow herbaceous energy crops tocompete equally with both fossil fuels and con-ventional crops are the creation of biomass en-ergy subsidies to match those that exist for theseother products. The pulp/paper and sugar indus-tries are good models for overcoming some of thetechnical barriers for biomass energy crops

The ideal residual biomass—dry, pure, baled,consistently available, and inexpensive feedstock—will be very difficult to achieve, but compro-mises and adaptations on the part of growersand industry can lead to economic benefits forboth. Adapting to harvesting standing corn canlead to benefits in: broadening the harvest win-dow, eliminating costs of gathering, raking,baling, etc., increased efficiency in use of equip-ment and labor, minimizing contamination,simplification of purchasing, and reducingtransportation costs (if stover and grain aretransported together). Adapting to wet storagewill lead to benefits in: increased harvestseason, elimination of fire risks, decreasedstorage area requirements, and increasedprocess automation.

A 1,500-acre hybrid poplar demonstrationproject in Minnesota has shown that increa-sing yields by a factor of two decreased costsby 22 to 34%. Policy interventions that would

increase the planting of dedicated woody bio-mass crops for bioenergy and bioproductsinclude: limiting external incentives, promotingmarket development, low-cost community-based exten-sion, focused research support,and decreasing federal and/or state regulatorydisincentives. Production and consumption greenpower incentives, and dual risk/profit sharingstructure are neces-sary conditions for woodybiomass economic development, whiletechnical demonstrations, state- and federal-level public/private coopera-tives, and annualproducer payment programs to decrease farmerrisk are sufficient conditions.

Nematode-control effects of rotating switch-grass (as a biomass crop) could have a large eco-nomic impact on farming systems. Corn stoverand wheat straw will likely be the most plentifulforms of biomass feedstocks, but the chea-pestforms will vary with region. Some growers willbe resistant to removing stover because of thesoil organic matter (SOM) benefits it pro-vides ifleft on the field. On the other hand, no-tillagriculture can improve SOM and still providestover.

Upstream Biomass Processing for the

Biorefinery Industry: Storage and Pre-

Treatment Issues

James Hettenhaus (cea, Inc.), Susan Hennessey

(DuPont), Gregory Lewis (Athenix)

The bulk of the available biomass (stover, straw,trimmings, and dedicated energy crops) for useas biorefinery feedstocks is located in and aroundthe midwest. Growers have many concerns overstover removal and no-till agriculture includingerosion, organic matter depletion, nutrient loss,moisture management, and feedstock collectionlogistics. These concerns are surmountable with

which poses a challenge for simultaneous sac-charification and fermentation. New biocata-lysts have been developed to withstandhigh temperatures and simultaneouslyconvert both glucose and xylose to L(+)-lactic acid. Being able to depolymerizelignocellulosics and ferment the resulting

sugars in one reaction vessel will increase theeconomic feasibility of using lignocellulosicmaterial as a biobased feedstock. Althoughlactic acid organisms are more temperaturetolerant, they are not classified as thermo-philes. More focus is needed on thermophilicorganisms.

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significant economic benefits for farmers, especi-ally if they are integrated further up the value-chain in the biorefinery industry.

In order to operate commerciallysuccessful biorefineries for the production ofethanol and valueadded chemicals, we musthave:

♦ low-cost, sustainable feedstock supplies,♦ an infrastructure to support collection, transportation, and storage of feedstocks,♦ a robust feedstock pre-treatment process

that allows greater utilization of existingsugars from a variety of feedstocks andcan be integrated with downstreamprocessing.

Athenix has developed a biomass pre-treatmentmethod that is environmentally friendly, biolog-ically compatible, simple, effective, and cost-competitive. Early data show that the methodworks on a wide variety of biomass feedstocksand allows greater than 90% hydrolysis of glucoseand greater than 80% hydrolysis of sugars as awhole. An analysis with NREL’s ASPEN Plusmodel shows that sugar production costs were$0.08/lb with projected costs of $0.05 to $0.06/lb after scale-up.

Novel Plant-Oil Derived Industrial Products

Through Biocatalysis

Morton Wurtz-Christensen (Novozymes, Inc.),

Geoffrey Hill (Ernst-Mortiz-Arndt University),

James Iademarco (Diversa)

Novozymes has introduced a new immobilizedlipase for the enzymatic interesterification ofvegetable oils without producing the unhealthytrans-fats that form during the standard partialhydrogenation process. Fats produced throughenzymatic interesterification have the samemelting patterns as those conventionally pro-duced, while the new process is simpler andcost-efficient. The technology can be easilyintegrated into the existing industry, but lackof equipment for and experience with enzymesmeans that much work is needed to show aconservative industry the benefits and ease ofadapting the new technology.

Lipase technology uses commercially avai-lable enzymes to produce cosmetics and otherimportant items using long-chain fatty acids,alcohols, amines, or other compounds. Enzymic

production of these products provides advantagesover chemical production with excellent con-version selectivity, minimal material loss, 60%less energy demand, and 80% less waste pro-duction. Approximately 400 kg of lipase, pro-duced from a genetically modified Aspergillus,can produce up to 2,000 metric tons of fat.Although product quality is often much betterusing enzymic conversion processes and someeconomical advantages exist in recycling bio-catalysts and in the lack of solvents or purifi-cation requirements, enzyme prices must stillbe reduced to bring production costs belowcurrent technology to speed transition.

Enzymic, fermentation, and transgenic tech-nologies may provide the following benefitsto plant-derived oil production: decreased usageof harsh chemicals and water, increased oilyields, and improved quality, stability, purity,and performance. Enzymic processing pro-vides very selective transformation capabilitiesthat may improve properties of existing productsor create entirely new ones. Technologies suchas high-throughput screening, directed evo-lution, and gene reassembly have producedenzymes that function under a wide array oftemperatures and pHs with large increases inactivity.

Enzymes for Bioprocessing Agricultural Feed-

stocks to Ethanol and Biobased Products

Sarah Teter (Novozymes, Inc.), Mike Lanahan

(Syngenta), Rosa Dominguez (University of Yucatan)

Novozymes—with help from the NationalRenewable Energy Laboratory, and the USDepartment of Energy—reduced cellulose pro-duction costs over a period of 3 years from$5.50/gallon ethanol to $0.30–$0.50/gallon etha-nol, exceeding their goal of a ten-fold cost reduc-tion. Through an integration of bioinformatics,proteomic and microarray analyses, and a direc-ted evolution program, significant improvementswere seen in enzyme yield, activity, and thermo-stability. By cultivating the organisms on biomassrather than glucose media, novel fungal enzymeswere expressed which may lead to further acces-sibility of biomass cellulose.

Syngenta has developed technology thatproduces a variety of novel starch-hydrolyzingenzymes directly in corn grain, enabling thedesign of corn varieties especially suited to

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specific food, feed and processing applications.This development allows flexible and high-levelenzyme expression in a dry, stable, pre-packagedformulation. The transgenic grain has the samestarch, protein, and oil contents as its conventionalcounterpart and is expected to receive fullapproval as food and feed.

Waste wash waters from tortilla productionin Mexico are being used to produce amylasefrom Aspergillus awamori. This waste material—currently released to the environment—has highpH, temperature, organic matter concentration,and biological oxygen demand. Technical fea-sibility, process simplicity, cost, and social/political factors make this technology adap-table to waste-streams from agricultural, food,and brewing industries. Genetic modificationof the fungus could lead to process improvements.

Update on Technology Development for

Advanced Biorefineries

Dave Glassner (Cargill-Dow), Charles Wyman

(Dartmouth College), Gerson Santos-Leon

(Abengoa Bioenergy Corporation)

Commonly cited barriers to operational biore-fineries—such as: 1) feedstock cost, availabilityand variability, 2) pre-hydrolysis reactor designand cost, 3) cellulose hydrolysis cost, and 4) theavailability of mixed sugar fermenting biocata-lysts—are perceived rather than real barriers totechnological development. Tremendous pro-gress has been made in all of these areas in thepast 20 years, resulting in improved technolo-gies and lower enzyme-processing and enzymecosts. Proprietary intellectual property and itsassociated competitive advantage will be re-quired to get beyond the real barriers of thehigh capital cost and high risk needed forbiorefinery development. Risk mitigation iscritical for the development of large biorefineriesas economies of scale require large capital invest-ment in order to produce a cost-competitive pro-duct. Also, integrating several new technologiesinto a facility multiplies ultimate risk

Overcoming the challenges of the diversityand recalcitrance of sugars available in biomassfeedstocks will provide sustainable and econo-mic sources of specialty and commodity chemicals.An economic model analysis shows that eco-nomies of scale associated with feedstock trans-portation decrease sugar costs for plants pro-

cessing up to 10,000 dry tons per day withrelatively small incremental benefits for in-creasingly larger plants. The processing ofthose sugars into a combination of high-value,small-market chemicals and lower value, large-market commodities, such as ethanol, provideeconomic opportunities but come with significanteconomic and technological system complexities.

Abengoa Bioenergy Corporation has oper-ational and developing ethanol plants in Europeand the United States. In addition to currentdry-mill ethanol production technologies, thecompany is working on advanced biomass-conversion processes, gasification, pyrolysis,and hydrogen production. One goal for the drymill industry is to increase production from 2.3to 2.9 gallons ethanol/bushel. Goals for theirco-product industry include increasingconsistency, digestibility, and protein concen-tration of feed products derived from ethanol-processing residues.

State Initiatives to Jumpstart the Biobased

Economy

Jill Euken (Iowa State University and BIOWA), Kevin

Kephart (South Dakota State University), Larry

Walker (Cornell University)

Following the development of a roadmap crea-ted by the Iowa Industries of the Future project,the BIOWA Development Association hasformed to implement the recommendationsand to encourage the growth of Iowa’s bio-economy. The not-for-profit group comprises,and has support from, government, industry,academia, university-extension services, growers,financial and environmental advisors, and thepublic. The group hopes to create jobs and invest-ment opportunities both in larger-scale biore-fineries and through creation of small busi-nesses focusing on biobased products. Up to22,000 jobs are expected to come to Iowa within10 years because of growth in biobasedindustries.

The US Congress has passed legislationauthorizing funding of the Sun Grant Initiativeto encourage national energy security, ruraleconomic development, and environmental sus-tainability through biobased-industry develop-ment. Working primarily through land-grantuniversities, the legislation calls for the allo-cation of $375 million over 6 years to develop

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five biobased-industry regional centers and acompetitive grants program within each region.Funds will be spent on research, extension, andeducation for technology development and imple-mentation of biobased power, fuel, and products.Up to 10,000 jobs could be added to the SouthDakota economy if its agricultural resourcesremain in the state for bioprocessing.

With a diversity in rural/urban areas and awide variety of available biomass feedstocks,New York State can serve as a model for develop-ment of biobased opportunities in the northeast.Several state (NYSTAR, genNYsis, NYSERDA),national/regional (Sun Grant Initiative), local(BioEconomy Partners in the Buffalo area), anduniversity (SABBIC at Cornell University)research initiatives are helping NY progressas a leader in this field. Genetic resources, basicand applied research, a systems developmentapproach, educational outreach, and collabora-tions are key components to biobased-industrydevelopment initiatives.

Biopolymer Production in Three Platforms

John Pierce (DuPont), Pat Gruber (Cargill-Dow),

Oliver Peoples (Metabolix)

With the help of Genencor, Dupont has crea-ted a biological process for production of 1,3-propanediol, a key component of their newSorona polymer. Development of a geneticallymodified microorganism with the ability tosynthesize 1,3-propanediol allows the produc-tion of a versatile polymer that has severalcommercially advantageous properties, butpreviously could not be economically produced.Biotechnology made this new developmentfeasible, but the work is still an integration ofknowledge and skill in biology, chemistry, physics,material science, and engineering.

Cargill-Dow is producing a new family ofpolymer materials under the tradenames ofNatureWorks and INGEO that are manufacturedfrom renewable sugar feedstocks. The cost,petroleum usage, and greenhouse-gas emis-sions for the production of the new polylactate(PLA) polymers are now less than those fromthe competing polymer (polyethylene tereph-thalate, PET). Production costs and the environ-mental footprint are expected to drop further withincreased manufacturing and use of cellulosicbiomass feedstocks.

Metabolix is a technology company that hasdeveloped a process for producing a host ofpolyhydroxyalkanoate copolymers from a rangeof biological feedstocks. Polymeric granulesare fully formed within bacterial cells, simpli-fying the process and bringing down overallcosts to $0.60/lb with an expectation of furtherreduction to under $0.50/lb. The new processuses standard fermentation and extraction equip-ment and the final product performs well in alldownstream processing equipment.

Marketing issues concerning the use of gene-tically modified organisms have been low withthis technology and appear to be surmountablewith education regarding environmental bene-fits and differentiation from food products.

USDA’s Biobased Products Rulemaking:

Where Do We Go From Here?

Roger Conway (US Department of Agriculture),

Mark Dungan (Consultant), Kim Kristoff (Biobased

Manufacturers’ Association)

The Office of Energy Policy and New Usesat the USDA has drafted a federal preferredprocurement program for biobased productswhereby federal agencies are required to pur-chase available biobased products when thoseproducts meet reasonable criteria of cost andperformance. The program is intended to: spurdemand for biobased products and agriculturalcommodities, encourage rural economic devel-opment, encourage environmentally sustain-able manufacturing, and further the goal ofnational energy security.

Over the past 10 years, the Office of EnergyPolicy and New Uses has promoted biobasedindustries and will continue to accelerate theinitiative with the new federal procurementmandate. With a federal procurement marketestimated at $280 billion to $300 billion cover-ing a full range of products, this program willbe a powerful tool in industry support. TheUSDA can further help by aiding producttesting and certification and by the alignmentof core farm-support programs to encouragegrower involvement and investment through-out the biobased product value chain.

The momentum of the mature petrochem-ical industry, along with a history of governmentsubsidies and/or infrastructural support, bringsformidable challenges to many small biobased

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Track 3: Sustainability Issues

Reconciling Private-Sector Needs with

Academic Research and Curriculum in

Biotechnology

Greg Stephanopoulos (Massachusetts Institute of

Technology), Michael Betenbaugh (Johns Hopkins

University), Kim Ogden (University of Arizona), John

Pierce (DuPont), Doug Cameron (Cargill)

Over the past 50 years, the foundation for thebiobased economy has been set, with physicsand chemistry research benefiting biology. Aca-demia needs to focus on educating people at alllevels to ensure biotech/pharma’s future. Theacademia/industry disconnect needs to beclosed by refocusing bioprocessing research to

manufacturing companies. The Biobased Manu-facturers’ Association was formed to promoteexcellence in the manufacturing, sale, and useof biobased products. Its methods of supportinclude: an Internet support super-center, industryand market education, and a uniform contentseal-labeling program.

Yeast and Fungi Expression Systems for

Biomass Processing

Nancy Ho (Purdue University), Mariet van der Werf

(TNO Nutrition and Food Research), Pengcheng Fu

(University of Hawaii)

Saccharomyces cerevisiae does not possess thenatural ability to ferment xylose due to the lackof xylose reductase and xylitol dehydrogenase.Since the conversion both of glucose and ofxylose is necessary for the efficient productionof ethanol from lignocellulosic biomass, a recom-binant yeast strain was created to ferment bothsugars. Through recombinations and large-scalescreenings, a stable strain was identified withthe ability to produce significant concentrationsof ethanol. With further modifications, high-valuecoproducts are possible to further aid the profi-tability of lignocellulosics-to-ethanol production.

The traditional approach to microbial pro-cess improvement is to appraise on a trial-and-error basis selected target genes and/or meta-bolites. This method is rapid, but has a low

success rate. An alternative approach, calledmetabolomics—requiring no prior knowledgeof the specific metabolic pathways—uses multipleanalytical methods to summarize the vast arrayof metabolites an organism creates and uses.This method has been successfully applied toidentify 96% of the commercially availableBacillus subtilis metabolites. Sophisticatedsoftware and statistical tools have been deve-loped to significantly increase the efficacy of thismethod.

Systems biology represents a new para-digm in that it allows all of the DNA andRNA in a genome to be looked at simulta-neously to confer relevant information, incontrast to the conventional reductionistapproach that focuses on a few genes and triesto interpret data without looking at the prob-lem holistically. In a systems-based approach,the first step is the development of a hypoth-esis, followed by information acquisitionand the construction of information libraries.The information is encoded via the construc-tion of mathematical models. Informationintegration consists of quantitative analysisusing statistical tools, along with visualiza-tion, comparison, and hypothesis-testing.Through this system-level analysis, the infor-mation content can be evaluated for contra-dictory issues.

emphasize not only process optimization butalso discovery of new processes to strengthenthe utilization of cells in processing. The Societyfor Biological Engineering founded withinthe Society for Chemical Engineering offers apossible link to help reinvigorate industry-academia research collaboration.

A decade ago, industry employment for BSchemical engineers was broken down to 45%chemicals and <3% biotechnology. Recently theindustry employment ratio dropped to 31%chemicals, while biotechnology has taken off toaccount for >13%. With biomedical engin-eering job growth projected to increase 26%

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tions must consider impact on all stakeholderswhen making decisions, particularly in the faceof globalization. Biotechnology is a disruptivedevelopment unsought by the chemical indus-try, but which can greatly contribute to increas-ing value by addressing issues that concern allstakeholders, from the environment to processefficiency.

In twenty-one OECD case studies, success-ful acceptance by industry of bioprocesses wasconsistently associated with decreased adverseenvironmental impact, and increased cost-efficiency.New skills need to be acquired in the adoptionof a biotech process and partnerships with aca-demia, consulting firms, or other companies willexpedite adjustment and contribute to triplebottom line fulfillment.

The adoption of new tools needed to inte-grate new biotechnology with industry can befacilitated through government funding andpartnerships. Biotech needs to be addressed asa disruptive innovation. It is important to avoidover-hyping its potential; recommendation ofwhat it can do for industry must be realistic.

Environmental and Social Impacts of a Large-

Scale Biorefining and Bioprocessing Industry

Robert Anex (Iowa State University), Bruce Dale

(Michigan State University), John Sheehan (National

Renewable Energy Laboratory)

All past economies since Mesopotamia havebeen biobased. Modern engineering capabilitiesnow foster new uses of biomass that presentthe possibility of a return to a biobased economyand a sustainable society. We do not understandall the complex issues of water supply, feed-stock supply, petrochemical supply, and biotech-nology’s impacts on these resources; this isan important area for ecological study to assist indirecting the rapid pace of biotechnologicaldevelopment.

Biomass is inexpensive versus petroleum,but processing costs are high. Biobased industrywill boom with the development of efficientsugar-conversion technology. Focus is neededon the best ways to utilize biomass on local geo-graphical bases as a key component of the deve-lopment of industrial bioprocessing.

Issues of environmental policy, ethics, socialscience, and biology need to be addressed when

by 2012 and chemical engineering projectedto stay stagnant, current chemical engineeringprograms should include not only chemistry,physics, and mathematics, but increase theconnection of their curricula to the biologicalsciences, including biochemistry, biology, andbiophysics.

A solution for the academia/industry discon-nect is illustrated by the University of Arizona’scooperation with the semiconductor industrybenefiting their computer science students.Courses co-taught by industry professionals,student internships in relevant industrial set-tings, weekly student presentations to theirprimary investigators and industrial mentorsall contribute to preparing students for theircareers. The program also encourages newdirections for student creativity for fuelingacademic R&D.

A common problem with academic indus-trial processing research is the feasibility ofapplying the research to industry. Researchshould focus on processes that have a legitimatecommercial path as industry moves further intoa multidisciplinary environment.

Cargill prefers to hire students with strongfundamental scientific understanding, excel-lent teamwork skills, and—most importantly—the ability to learn. Industry is best at processoptimization, but student understanding ofpatents and intellectual property is extremelyimportant as 80% of biotechnological researchis never published. These are important factorsfor academia to consider when designing programs.

Biotechnology as an Enabler of Sustain-

ability for the Chemical Industry

Darryl Banks, Dave Sherman (Sustainable Value

Partners), Iain Gillespie (Organization of Economic

Cooperation and Development), Jim Stoppert (Cargill)

The key element for sustainable manufacturingis to progress to technologies that are energy-efficient. Finding the solutions to this is theopportunity and challenge the biotechnologyindustry faces for the development of a sustainablechemical industry.

The chemical industry is challenged bystagnant financial returns and access to worldcapital markets, and societal expectations forsustainability need to be addressed. Corpora-

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conducting life-cycle analyses of energy sources.We must work towards understanding more ofthe technical impacts involved in biomass lifecycle analysis. Educating not only industry butalso the public will be needed for full discus-sion of the issues, to work together towardenergy-sustainability.

Environmental Benefits of Industrial

Biotechnology

Chris Hessler (AJW, Inc.), Peter Chant (FReMCo

Corporation, Inc.), George Sugiyama (Dorsey

Whitney)

The OECD case study (mentioned above) oftwenty-one successful biotech-process inte-grations determined that each was environ-mentally friendlier than the process it re-placed. A new report by AJW, Inc., will ad-dress what pollution-prevention biotech cancontribute if industry adopts it, along withupstream benefits from biotech processes. Itis important to engage all stakeholders inthe industrial processes and build relation-ships with them to avoid GMO-type per-ception problems in industrial biotechnology.

Unbeknownst to many people andcorporations, emission reduction credit(ERC) trading is a lucrative business. ERCscan be created by being able to show thatemission reductions are quantifiable,verifiable, and that there is a real surplusduring the manufacture, use, or disposal of aproduct. Even if the product costs more toproduce than a less environmentally friendlyprocess, the profit margin will often be equalor greater than the previous process whenERCs are included. In some cases, a productcan even be given away, and the return fromthe ERC will provide a profit.

Biotechnology provides a great deal of pro-mise for the emerging and growing markets forbiofuels. However, as it progresses, industry hasto be aware of, and must confront, regulatoryand legal matters. Developing a biofuels infra-structure is fraught with difficulties, and wecannot simply scrap the current petrochemicalinfrastructure. Final commercialization of bio-technology will require close attention to theregulatory structure for all fields it operates in,which will be a significant challenge.

Harnessing Microbial Genomes to

Address Climate Change

Jae Edmonds (Pacific Northwest National

Laboratory), Mike Himmel (National Renewable

Energy Laboratory), Karin Remington (Center for

the Advancement of Genomics and Institute for

Biological Energy Alternatives)Addressing climate change is a long-termissue and large-scale solutions await manyR&D breakthroughs. Biotechnology couldprovide a broad suite of energy services frombiofuel feedstocks to hydrogen productionfor fuel cells. The combination of fuel cellsand biotechnology solutions could makesignificant energy contributions, but for large-scale deployment to occur, we need to findmore effective solutions, which microbialgenomes may offer.

Approximately 360 glycosyl hydrolases—the main class of enzymes that break downcellulosic material—have been identified.However, cellulose is resistant to microbialdegradation, and no superior enzymes or sys-tems have been identified for its metabolism.The DOE’s Genomics:GTL program offers thebest opportunity yet, using microbial genomes,to discover a system for efficiently breakingdown cellulose to be utilized for biofuelsynthesis.

With over 1.28 million genes representingan estimated 1,800 new microbial species foundfrom the first seawater sampling tour in thenutrient-poor Sargasso Sea, the oceans promisegene discoveries that can be utilized for bio-remediation and carbon sequestration amongmany of the possible applications. The Institutefor Biological Energy Alternatives has sampledthe genomic makeup of seawaters from NovaScotia to the Galapagos Islands and is now em-barked on a round-the-world journey to revealoceanic microbial diversity and possibly findnew genetic tools for environmental sustainability.

Bioethics of Industrial Biotechnology

Mark Saner (Institute on Governance), David Castle

(University of Guelph), Eric Mathur (Diversa)

Sustainability is desired by the public, politicians,industry, and NGOs. This unusual consensusprovides a rare opportunity for biotechnology.The biotechnology industry should be open

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to discussion and willing to address concernsof all sectors of society in order to operate inan effective triple bottom line manner. Thereis also the ethical voice that knows that we canengineer nature, but discussion should be openedin terms of should we engineer nature, and ifso, how?

It is important to understand the ecologicalfootprint that the cultural world has on thebiotic world. Ecological studies measure the percapita “footprint” in hectares required to sustaina person’s energy consumption per year. Bio-technology needs to be analyzed in these termsas to the benefits it provides for the world popu-lation as a whole, and questioned if it is truly asolution or if it only will create new problems.One such concern is the economic impact ofbiopiracy, as the most abundant resources arein regions of lowest socioeconomic status.Addressing such issues and applying distri-butional justice to problems like biopiracy areimportant for the socio-political success of thebiotechnology industry.

Diversa provides a model for ethical bio-prospecting. The corporation supports programsworldwide with organizations such as the NationalInstitute of Biodiversity in Costa Rica to aidingPhD programs in Kenya. It is important to sup-port equitable benefit-sharing, from monetarydonations to technology-capacity building thatcontributes to people’s understanding of biodi-versity in their localities. Diversa has establishedrelationships with governments and institutionsworldwide to progress with biotic discoveryand show that the environment has economicvalue.

Industrial Biotechnology Applications to

Mitigate Greenhouse-Gas Emissions

Ranjini Chatterjee (Codexis), Mark Stowers

(Michigan Biotechnology Institute), Robert Tabita,

(Ohio State University)

Studies of cyanobacteria revealed that ribulose-bisphosphate carboxylase (rubisco) is the bottle-neck in CO2 fixation. An engineered form ofrubisco had a two-fold increase in rate of CO2

fixation. The carboxylation kinetics of rubiscowere improved by DNA shuffling, which demon-strates that microbial systems can be manipulated

for carbon sequestration and utilization.Cellulose can be applied to many materials,

such as nanofibers to replace fiberglass, whichare safer to handle, biodegradable, and light-weight. New products can be made from suc-cinic acid and novel polymers. The succinic acidmarket is limited now (~$2.5 million/yr), but asproduction costs decrease it will be more widelyused and will contribute to numerous productswhile CO2 is fixed, decreasing greenhouse gases.

Ribulose bisphosphate (RuBP) is a key accep-tor of electrons in CO2 fixation, and mutantproteins have been isolated that confer increasedaffinity of rubisco for RuBP. Manipulation ofthese genes has enabled researchers to engineeraerobic autotrophic microbes to increase theirmetabolism using CO2 as the sole carbon source.This offers the possibility of engineering atranscription regulatory protein so that CO2-fixing genes are always turned on, therebyincreasing the carbon-sequestering capabilitiesof microbes.

Biomass Utilization and Ethanol Production:

Mitigation of Greenhouse-Gas Emissions

David Pollock (BIOCAP), Jim Hettenhaus (cea,

Inc.), Steve Eule (US Department of Energy)

BIOCAP is building a network encompassingfederal and provincial Canadian governments,industry, academia, and NGOs to find least-cost, scientifically credible solutions to renew-able energy consistent with Canadian policy.Results from laboratory research are beingapplied to national infrastructure as efficientlyas possible. Forestry and natural ecosystems,agriculture, and biobased product sectors areworking together to achieve the goal of over-laying natural science research with social policyfor a sustainable energy future.

Soil quality is directly related to tillage, astilling exposes the anaerobic subsurface to airand soil carbon is released as CO2. If nitrogen isnot added with plowed residues, an N deficiencymay occur decreasing the next season’s crop yield.By not tilling, there is less requirement for ferti-lization leading to better conditions for surroun-ding watersheds. By converting 30% of cornstover to ethanol, the United States could reduceits greenhouse-gas emissions enough to meet5% to 10% of the total offset required to achieve

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European Advances in Marine Biotechnology

for Food, Pharmaceuticals and Energy

Rene Wijffels (University of Wageningen), Detmer

Sipkema (University of Wageningen), Peter Lindblad

(University of Uppsala)

Large-scale “milking of microalgae” is done inponds in Australia of up to 50 ha, for the produc-tion of beta-carotene. The productivity of suchponds is relatively low, therefore effort is beingexpended on the development of in-vitro systems.Using a biocompatible organic phase, Dunaliellasalina can be cultured for relatively long periodswith continuous synthesis and removal of beta-carotene in the organic phase, with significantimprovement in carotenoid production overcommonly used systems.

Because of the increasing problem of salin-ization of water in the Netherlands, ocean farm-ing is being researched: the objective is to growalgae in saline water as feed for fish. The fish,in turn, are being “redesigned” to accept a vege-tarian diet.

the goals set out in the Kyoto Agreement.Eighty percent of greenhouse-gas emissions

are energy related, and emissions are increas-ing at a rapid rate. The solution to reducing suchemissions is a century-long process, but the USgovernment already supports development of anarray of energy technologies from hydrogen produc-tion for fuel cells, biodiesel, and other renewableenergy sources. An objective of DOE’s Genomesto Life Program is to produce cellulases that areefficient enough to be used for large-scale industrialproduction of ethanol to significantly contributeto the country’s energy supply.

Life Cycle Assessment and Sustainability of

Bioprocesses

Robert Anex (Iowa State University), John Sheehan

(National Renewable Energy Laboratory),

Albert Chan (National Research Council of Canada)

1, 3-propanediol (PDO) is used in producingsolvents, adhesives, and laminates. In the PDOlifecycle, most of the fossil energy consumed isin the PDO production. Biobased PDO produc-

tion by fermentation of corn may be preferableand more environmentally beneficial than thepetrochemical ethylene oxide pathway, by redu-cing net energy requirements for production from56.9 MJ/kg to 37.1 MJ/kg. Further analysis ofcompeting methods will help determine whichsynthetic pathway is the most energy-efficient.

Life-cycle analysis (LCA) provides an com-prehensive estimate of closeness to sustainability.LCA modeling was applied to the entire stateof Iowa for sustainable ethanol-productionpotential from corn stover. If farmers used no-till cropping, the state would have significantethanol-production potential. The usage of bio-ethanol produced from corn stover has thepotential to decrease coal consumption bytwelve-fold, fossil-energy consumption by102%, and natural gas usage by 200% in somelocalities.

When conducting LCAs, it is important tohave a combination of approaches by usingsystems modeling that looks at the long-termimpact of a production process and not just atimmediate production impacts.

Track 4: Novel Applications

The lowly sponge is a source of over 5,000unique compounds with potential uses asanti-viral, -tumor, -biotic, -flammatory agents.The potential for cultivating sponges (Lissoden-doryx sp. and Dysidea avara) is being investigatedas sources of halichondrin B (anticancer) andavarol (antipsoriasis), respectively. Althoughsponge growth rates can be increased sevenfoldand seasonality eliminated in ex-situ culture,production costs of halichondrin B remain pro-hibitive. Avarol is more promising. A bacterialsymbiont may be responsible for the synthesisof halichondrin B, in which case an alternativemeans of production may be possible. In thefuture, the oceans may assume the role of therain forests, as potential sources of bioactivecompounds. Sponges are a particularly fruitfulsource of compounds; being sessile, they haveaccumulated many chemical means of self-defense.

The production of hydrogen by splittingwater using solar radiation is possible with

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The Defense Advanced Research ProjectsAgency (DARPA) provides funds for univer-sities and industry, and applies inventions anddiscoveries to improved defense capabilities,e.g. new materials for protection of soldiers onthe battlefield. NASA and the Internet are spins-off. A major-risk/major pay-off approach istaken. Soldiers’ waste packaging may in thefuture be used to generate energy on the battle-field; bioplastics may have greater fuel valuethan plastics from petrochemicals.

The Biotechnology Working Group of theUS Army is a multidisciplinary entity thatexamines biotechnological approaches to sol-ving military problems. There is interest indeveloping—inter alia—biological obscurantsand using biological systems for detection oflow-level toxicants.

The Office of Naval Research biomimeticsprogram includes work on agile biosensors,energy harvesting, next-generation antibod-ies, and the green synthesis of energy sources.A biofuel cell has been developed, <1 mm3 involume and 5 µW in power, that can be placedinside a trained bee to detect explosives. Butan-etriol can be synthesized by microorganismsfrom xylose and arabinose as a safer, more envi-ronmentally friendly alternative to nitroglycerin.

The possibility of microbial conversion ofwaste materials—food, human waste, and pack-aging—into ethanol for use by expedtionaryforces is being examined. Conversion of thesematerials into electricity is also under studyusing biofuel cells. The electricity would beused to run sensors, etc. The concept is “addwater and go.”

Biotechnology at the Nano- and Micro-Scales

for Drug Discovery and Functional Materials

Jonathan Dordick (Rensselaer Polytechnic

Institute), Ping Wang (University of Akron), Alan

Russell (University of Pittsburg)

Nanotechnology offers many new approachesto improving biocatalysis. Enzymes can be atta-ched to single-walled nanotubes of 1 nm diam-eter and to multi-walled nanotubes of 20 to 40nm diameter to generate biocatalytically activesurfaces. The nanotubes are mechanically strongand are protective of proteins in the presence ofchemical denaturants. Tube curvature stabilizes

photosynthetic microorganisms. The develop-ment of reactors to produce bio-hydrogen isin the early research phase. Under the auspicesof several international collaborative efforts,photobiologic and fermentative systems areunder study, including the use of cyanobacteriathat produce hydrogen as a by-product ofnitrogen fixation. Another approach is to makethe active site of photosystem II more efficientin the harnessing of protons. Although thecurrent efficiency of bioreactors is low, signifi-cant improvements are expected over the next20 to 40 years.

Microorganisms for Direct Energy Production

John Benemann (Institute for Environmental

Management), K.T. Shanmugam (University of

Florida), Juergen Polle (Brooklyn College)

The photobiological production of hydrogenis the “holy grail” of hydrogen production:photosynthesis with the hydrogenase deacti-vated. A major problem lies in keeping the oxy-gen separate from the reductant. Also, photo-bioreactors are costly.

Hydrogen is a by-product of cyanobacterialnitrogen fixation with light as the energy source.Hydrogen may also be produced as a result oftreatment of ethanol with heat over a catalyst.The ethanol is produced by yeast provided withglucose produced by microbial degradation oflignocellulose.

Microalgae are attractive organisms: they arefast-growing and produce valuable commoditiesincluding biofuels and biomass. However, lightharvesting in ponds is inefficient: cells on thesurface are photo-inhibited—with 80 to 90% ofthe energy dissipated as heat—shading thosebelow. Mutant strains are being developed withfewer antenna chlorophyll molecules. It is ex-pected that the current conversion of 2 to 3%of solar energy into biomass can be increasedto 4 to 6%.

Industrial Biotechnology and Bioprocessing

for National Defense Applications

Rosemarie Szostak (Defense Advanced Research

Projects Agency), James Valdes (Army Research

and Development and Engineering Command),

Harold Bright (Office of Naval Research), Michael

Ladisch (Purdue University)

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the enzyme, similar to what occurs inside cells.Embedded in a porous polymer, nanotubes candetoxify air of nerve-gas agents for example.

A critical issue in drug discovery is that high-throughput methods are missing for checkingfor toxicity to humans, for example. A metabo-lizing enzyme toxicology assay chip (MetaChip)has been developed as a micro-scale alternativeto in vitro screening methods.

Silica glass nanoparticles contain pores of ap-proximately 15 nm in diameter, large enough toaccommodate a protein molecule, providing mul-tiple attachment points that lend stability. The half-life of glass-bound chymotrypsin, for example,is >1,000-fold longer than that of the nativeenzyme. Binding of multi-enzyme complexes ispossible, e.g. for the production of methanol fromcarbon dioxide, with regeneration of the NADHcofactor within the particle. Nanofibers are simi-lar to nanoparticles in having a huge surface areawith the advantage of easier regeneration. Beta-galactosidase conjugated to hydrophobic poly-styrene particles had activity >100-fold higher atan organic/aqueous interface than the nativeenzyme in the aqueous phase.

There is need to learn how to build nanostruc-tures to mimic those in biological systems. Bio-logical components may be added to nanostruc-tured materials to respond, for example, to toxinsor pathogens by changing color. Polydiacetylene(PDA) sensors have been manufactured to changecolor in the presence of virus particles. Self-assemb-ling PDA nanotubes can be manipulated for100% uniformity in diameter. These adhere to thesurface of bacterial cells, penetrate the outer mem-branes and are bactericidal. A single nanotube islethal to a cell of E. coli.

Microbial Production Systems for Value

Added Chemicals

Nicholas Ballor (Michigan Technology University),

Regine Behr (Novozymes), Jan de Bont (TNO

Environment, Energy and Process Innovation)

Ferric iron is an excellent oxidizing agent usedfor scrap recycling, wastewater treatment, etc.Current production methods entail boiling sul-phuric acid, bubbling chlorine, and hyperbaricoxygen. The extremophile bacterium Acidithio-bacillus ferrooxidans provides an attractive alter-native; it uses ferrous iron as an energy source,is functional at 30°C and pH 2.0, and uses CO2

as a source of carbon. A stand-alone automatedbioreactor for ferric iron generation (SAABFIG)has been developed, with low operating costs,requiring low capital investment, and modestoperating conditions. Using the SAABFIG bio-reactor for scrap-iron processing, copper is cap-tured and removed (otherwise steel productionis compromised) and ferrous iron is recyclable.

Hyaluronic acid (HA) is a lubricant polysac-charide present in the capsules of some bacteria(e.g. Streptococcus spp.) that has many applica-tions in cosmetics and pharmaceuticals includ-ing osteoarthritis treatment. Rooster combs andcertain strains of Streptococcus, the current sourcesof HA, are less than ideal because of purifica-tion needs and other problems. Bacillus subtilis,a non-fastidious bacterium used for productionof many industrial enzymes, has been geneti-cally engineered to secrete large amounts ofhigh molecular weight HA, representing a newcompetitive system for large-scale synthesis ofHA.

Pseudomonas putida was chosen as a vehiclefor synthesis of aromatic hydrocarbons that aretoxic to most microorganisms because it is a ver-satile organism of known genomic sequence. Asolvent-tolerant strain (the tolerance mechanismof which is poorly understood) of P. putida wasmutagenized and screened for overproductionof phenol from glucose as proof of principle.Other aromatic compounds, alcohols, epoxides,terpenoids, etc. may be similarly produced byintroduction of appropriate heterologous genes.

Industrial Biotech Applications in the Pulp

and Paper Industry

Tim Presnell (MeadWestvaco), Geoff Hazlewood

(Diversa), Art Ragauskas (Georgia Institute of

Technology)

Xylanases are already used in pulp productionto mitigate bleaching costs and pollutant pro-duction. Many opportunities for further enzymeuse are under study, for even less chemical usage,less energy consumption, effluent amelioration,machine cleaning, de-inking for paper recycling,for improved lignin degradation, modification offiber for improved paper quality, etc. Rejectedwood chips and sawdust may be converted tovalue-added products like ethanol and levulinicacid by enzyme action. Laccases and peroxidaseshold promise for oxidation of lignin, lipases for

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pitch reduction, cellulases for cell-wall depolymer-ization, and pectinases for depolymerizationof pectic polysaccharides. A search for improvedxylanases from many locations globally resultedin more than 190 novel enzymes, some of whichare effective at higher and lower pH values, andare effective with hard and soft woods with 22%less need for chlorine dioxide.

Industrial Biotechnology Applications

for Fuel Cell Development

Michael Toney (University of California, Davis), Nick

Akers and Shelley D. Minteer (St. Louis University),

Bruce Logan (Pennsylvania State University),

Robert Coughlin (University of Connecticut)

Biofuel cells, conceived in the 1960s, differ fromtraditional fuel cells in the catalyst used for oxi-dation of the fuel. Rather than a non-renewableprecious metal, early types used live bacteria andlasted only up to 3 hours. With polymerimmobi-lized enzymes, a 6-month longevity is nowpossible. Highly selective enzymes are now avai-lable, able to utilize a variety of fuels. In ethanolfuel cells, alcohol dehydrogenase is immobilizedin quaternary ammonium salt-treated Nafionmembrane; NADH is regenerated within themembrane pores. Although the NAD is graduallydegraded (over 45 days), it can be added back.

Microbial fuel cells (MFCs) offer a new app-roach to wastewater treatment. Thus, energymay be generated from a free “resource” thatotherwise costs money to manage. Bacteria inthe wastewater form a stable biofilm at the anodeand transfer electrons obtained from the oxida-tion of the organic matter under anaerobiosis. Itis possible to generate up to 150 mW/m2 with80% removal of the biochemical oxygen demand.Approximately 1,000 mW/m2 is thought to beachievable, in which case, wastewater from100,000 people may be sufficient to power 300homes. It may be possible to link biohydrogensynthesis with electricity production for maxi-mum capture of energy from wastewater, makingthis a practical technology.

MFCs use mediators of various kinds, whichin the oxidized state must escape easily from the

microbe. The mediator or the cell may beattached to the anode; if the cell is attached, amediator may be unnecessary. A special ad-vantage of the MFC is fuel flexibility; electric-ity may be produced from acetate, lactate,succinate, glucose, ethanol, or methanol.

Methanol and Methane as Carbon Sources

for the Expression of Recombinant Proteins

in Methylotrophs

Carlos Miguez (National Research Council of

Canada), Colin Murrell (University of Warwick),

Mary Lidstrom (University of Washington)

Methanotrophs are Gram-negative aerobicbac-teria that use methane for energy and as acarbon source. A subset of the methylotrophsthat grow on single-C compounds, they are ofinterest as a source of single-cell protein.Methane monooxygenase (MMO), the keyenzyme, exists in membrane-bound and solubleforms; the latter (sMMO) is more versatile andof interest for co-oxidation of alkanes, alk-enes, aromatic and substituted aromatic com-pounds (>200 in total) with potential forbiocatalysis (e.g. production of epoxides andmethanol) and bioremediation (e.g. degrada-tion of aromatic hydrocarbons). Via genetransfer, “metabolic engineering” is nowpossible. New screening tools are needed toselect superior sMMOs, e.g. for production ofchiral alcohols.

Methanol is attractive as a feedstock: it isinexpensive ($226/tonne), non-corrosive,water-soluble, and renewable. Methylobacter-ium extorquens, a methanotroph with a wellcharacterized genome, is being developedas a model system for bioprocesses utilizingmethanol. High cell densities are possible inbatch fermentation with the production ofpolyhydroxybutyrate. The central metabolismis being manipulated for overproduction ofdesired proteins and other compounds; stablevectors and efficient promoters have beenidentified, and green fluorescent protein(encoded on a plasmid) is being used to assaythe effects of specific selection pressures.

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Workshops

Positive and Negative Impacts of Agriculture

Feedstock Utilization

Moderator: Kevin D. Kephart (South Dakota State

University)

Recorder: Vance N. Owens (South Dakota State

University)

In this two-session workshop, the group—repre-senting various aspects of feedstock utilization—was charged with identifying and evaluatingkey issues involved with the use of agriculturalfeedstocks in large-scale biorefineries for bio-based products. During the first session, morethan twenty issues associated with agriculturalfeedstocks were identified, including production,effects on the environment and soil quality, howto include feedstock producers, and potentialfor research funding. During the second session,key issues, encompassing many of those identi-fied in the first session, were discussed in detail.

Issue: Environmental Impact

The use of agricultural feedstocks in a biobasedeconomy may have positive or negative effectson the environment. By consensus, it was con-cluded that any assessment of the use of agri-cultural feedstocks should be on a global scale,particularly as their use relates to the reductionin greenhouse-gas emissions and to globalagricultural sustainability. However, it wasrecognized, as Bruce Dale (Michigan StateUniversity) suggested in an earlier breakoutsession, that “all biomass is local.” Therefore,while the use of agricultural feedstocks is aglobal issue, it is critical that research, sustain-ability, producer involvement, and other factorsassociated with agricultural feedstock use beconsidered from local, national, and globalperspectives.

Soil quality (fertility, organic matter content,tilth, particle aggregation, etc.) is a primary vis-à-vis production of agricultural feedstocks.Research has demonstrated, and producers inmany countries have adopted, managementtechniques to improve soil quality. Soil erosionhas been reduced and organic matter contentincreased on many acres in the United Statesthrough the Conservation Reserve Program(CRP). A significant number of CRP acres are

reverted to annual crop production each year,and cultivation of these acres may dramaticallyreduce the environmental and conservationbenefits gained during enrollment. Wise use ofthe species currently grown in CRP or use ofreduced or no-till practices when converting totraditional crops, both of which may be usedfor bioenergy production, will help alleviatethis concern.

Diverse species and types of agriculturalfeedstocks may be used as bioenergy cropsincluding corn stover, wheat straw, perennialgrasses, and poplar. By its very nature, thisdiversity helps reduce negative environmentalimpacts while improving long-term sustainabilityof various systems.Recommendation Agricultural feedstock use mayaffect not only the local but also the globalenvironment. However, the lack of represen-tation from environmental groups was noted.Therefore, it was recommended that, for futuremeetings, greater effort should be made toinclude representatives from environmentalorganizations.

Issue: Public-Private Partnerships

In order to better understand the effects of agri-cultural feedstock use for bioenergy, vested in-terests must be present at the producer, public,and private levels. Agricultural feedstock researchefforts must continue to:

♦ evaluate best-management practices forimproved yield and sustainability,

♦ maintain breeding programs in whichlocally adapted species and cultivars aredeveloped and tested, and

♦ determine the best methods for use ofbiotechnology.

As evidenced by attendance at this meeting, in-terest from the public and private sectors appearsto be high. Partnerships between the public sec-tor and private industry, however, must includefeedstock producers.Recommendations Producers must be includedin all aspects of the development and use ofbiobased agricultural feedstocks. Producersmust also capture a substantial proportion of the

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value generated by this new industry. Becausethey will supply the bulk of agricultural feed-stocks, they may be most capable of providingpublic and industry personnel with insights intothe challenges facing a large-scale agriculturalfeedstock industry. To enable potentially synergisticadvances in knowledge and understanding ofagricultural feedstock use, personnel at publicinstitutions should continue to be encouragedto partner with private industry. Funding forresearch to improve our knowledge of agriculturalfeedstock utilization should be among the toppriorities of public institutions.

Issue: Feedstock Diversity

Although agricultural feedstocks are abundantlyavailable, the optimum methods required toharvest, store, and transport biomass cropsmust be ascertained. In addition, consideringthat feedstocks may come from crop residues,herbaceous plants, forest products, oilseeds,grain crops, and manure, supply and qualitymay be inconsistent. Quality and supply mayalso vary from year to year, by environment, byharvest and storage method, and region of origin.Diversity of feedstocks provides one method tomanage risk and allows growers to produce cropsbest adapted to local conditions. The currentbiobased infrastructure largely supports feed-stocks from which a consistent source of starchis the primary resource, however. Infrastruc-ture and methods for processing and convert-ing lignocellulosic biomass into biobased prod-ucts are not as common or well defined. There-fore, in order to efficiently utilize diverse feed-stocks, robust biomass conversion technologymust be developed and tested on a large scale.

The need for a list of traits desirable for bio-based agricultural feedstocks was discussed.For example, developing feedstocks with lowerlevels of lignin and protein while maintainingor increasing total yield and desirable structuralcarbohydrates would benefit many of the pro-posed conversion processes. Potential diseasesand other pests must be studied, particularly iflarge areas are to be dedicated to biomass crops.Because of the diversity of feedstocks and thelimited knowledge related to pests of some ofthem, breeders and geneticists should be awareof the potential pests and desired traits in their

effort to develop cultivars adapted to the localenvironment and to the harvest, storage, andtransportation methods available.Recommendations Public institutions and privateindustry must increase research efforts and fun-ding to address harvest, storage, and transpor-tation of agricultural biomass. It was recommen-ded that a committee be named to help elucidatethe most desirable genetic and quality traits ofvarious agricultural feedstocks. This committeeshould communicate this information to person-nel in the public and private sectors to enhanceresources allocated to improving agriculturalfeedstocks.

Issue: Policy

The use of agricultural feedstocks directly andindirectly affects current public policy and thedevelopment of future policies. Expanded deve-lopment of biomass energy can help facilitatereduced dependence on foreign energy and im-proved national security.

Development of a biobased infrastructure mayhave dramatic positive effects on rural economiesthrough creation of jobs, increased value of agri-cultural products, and ability to add value toexisting agriculture crops or crop residues. Agri-cultural feedstock development may impactfederal farm subsidies, but financial decisionsrelated to the use of agricultural feedstocksshould be made assuming absence of farmsubsidy.Recommendations A coalition representing pro-ducers, public institutions, private industry, andenvironmental organizations should be establishedto address the numerous public-policy issues.This coalition should work with personnel fromstate economic development offices and USDARural Development to encourage policy develop-ment for rural economies. This coalition shouldinitiate a meeting in the near future to begin dis-cussions regarding agricultural feedstock use.

Conclusions

To be successful, further efforts towardagricultural feedstock utilization must providea method for greater inclusion of producers atall levels. In addition, producers, representa-tives from environmental groups, and person-nel from the private and public sectors must

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develop and maintain excellent communicationchannels in order to optimize potential benefitsand avoid possible pitfalls in the utilization ofagricultural feedstocks.

If correctly implemented, biomass systemscan provide reliable means of energy produc-tion with concomitant environmental and socialbenefits, including enhanced conservation ofnatural resources, agricultural sustainability,enhanced rural economies, and improved nat-ional energy security. Areas of emphasis forfeedstock-production programs should includesustainability, efficient harvest and transpor-tation systems, and marketing to provideincentive and opportunity for producers.

State and Federal Funding Opportunities for

Biomass Energy and Biomass Projects

Moderator: Richard Powers (Dorsey and Whitney LLP)

Recorder: William Gibbons (South Dakota State

University

Five presentations were made, describing fed-eral, state, and private sources of funding thatmay be leveraged to support research and com-mercialization of biobased products. A shortQ&A session followed each, with general dis-cussion after the final presentation.

Douglas Kaempf [Biomass Programs Managerfor the US Department of Energy (DOE)[www.doe.gov] provided an overview of fun-ding opportunities provided by his as well asother agencies. One DOE program, directed atthe state level, is Deployment of Clean EnergyTechnologies, funded at $16.5 million. In 2004,this formula funding focused on biobasedenergy. DOE also supports an “ear-marked”Regional Biomass Program to support statepriorities in energy.

Like other federal agencies, DOE participatesin the Small Business Innovative Research pro-gram (SBIR, www.science.doe.gov/sbir); $95million were available in 2004 for competitivegrants to help small companies meet their R&Dneeds. Phase I awards provide up to $100,000for 9 months for feasibility analysis. Phase IIawards are for 2 years for up to $750,000.

The DOE’s Office of Biomass Programs alsooffers competitive grants for research prioritieslisted in the multi-year technical plan; total

dollar amount depends on annual appropriations(http://devafdc.nrel.gov/biogeneral/Program_Review/MYTP.pdf). Over the past 3years, the Office of Biomass Programs has awar-ded $10–12 million/year through this program.In addition, DOE’s Office of Science releasessolicitations on fundamental R&D-related re-search in key targeted areas (www.sc.doe.gov).Currently, the focus is on plant genomes andcellulose biosynthesis.

DOE and the US Department of Agriculture(USDA) are in the second round of a joint soli-citation on bioproducts and bioenergy, autho-rized by the Bio R&D Act of 2000, with $24million of funding (dependent on appropria-tions, www.bioproducts-bioenergy.gov). DOEand USDA have developed roadmaps to helpdirect this research and have formed commit-tees of industrialists, government representa-tives, researchers, and environmentalists tohelp focus these efforts.

Mr. Kaempf provided a brief update on pro-grams of the National Science Foundation (NSF)related to the biobased economy (www.nsf.gov).Current programs (and funding) include: Bio-chemical Engineering ($15 million/year), Mate-rials Use ($ 5million/year), Plant Genome ($13million), and Functional Genomics ($3 million).

Frank Flora, Chair of the Biobased Productsand Bioenergy Coordination Council (USDA,www.usda.gov) expanded on the USDA’s pro-grams, which range from research and extensionto support for industry and commodity groupsthrough special grants and Commodity CreditCorporation programs. Two new programswere included in the 2002 Farm Bill. Section9002 authorized the Federal Procurement ofBiobased Products program (funded at $1 million/year), while Section 9006 authorized the Bio-diesel Fuel Education program ($1 million/year)and the Renewable Energy Systems and EnergyEfficiency Improvements program ($23 million/year). The Bio R&D Act of 2000 (see above) dir-ected the USDA to contribute $14 million annu-ally to the joint DOE/USDA bioproducts pro-gram and authorized the USDA to contributeup to $150 million annually to producer paymentsfor expanded biomass utilization. The HealthyForest Restoration Act provides $5 million/yearto expand utilization of small-diameter woody

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products for bioenergy and bioproducts. TheUSDA SBIR program contains various sectionsspecifically directed to biobased products andenergy. USDA programs can be explored atwww.usda.gov/edcc.

Alison Schumacher is Director for the CleanEnergy Group (CEG, www.cleanegroup.org), anon-governmental organization that works toaccelerate commercialization of clean energytechnologies through advocacy, education, andpartnerships with governments and private en-titites. CEG works with states to more effectivelyuse their Clean Energy Fund programs to de-velop niche renewable energy markets and fosterclimate-change action at the state level. Overthe next decade, states will invest $3 billion inclean-energy technologies, with funding largelyfrom systems benefits charges (utility settlementcharges). State funds are typically used for grants,production/tax credits, green tags, loan programs,equity, and commercial financing programs.CEG will assist in a broad range of renewableenergy projects, including: solar, wind, fuel cells,biomass, green buildings, energy efficiency, pub-lic education, strategic market research, nichemarkets, green power, and business develop-ment. In recent years, states have solicited pro-posals in the specific areas of biomass gasificationand cofiring, land-fill methane, anaerobic digestion,wood-waste combined heat/power, biofuels forfuel cells, and integrated biomass gasificationwith fuel cells.

In summary, states are active players in innova-tive clean-energy deployment activity, andopportunities for partnerships focusing ontechnology, finance, and deployment mattersare enormous. Links to various state programsare available at the CEG Web-site.

David Kolsrud (david@forfarmers.coop), adeveloper/consultant/farmer from Beaver Creek,MN, provided insight based on 10 years experi-ence in developing farmer-owned cooperatives—from conception to completion—that haveinvested in value-added projects: ethanolproduction from corn, soybean crushing/bio-diesel production, and wind-energy poweredfarms. Thirty steps are involved in the develop-ment process. He outlined a feasibility studyapproach for obtaining value-added develop-ment grants for preparing winning business

plans and establishing successful value-addedbusinesses, and briefly described his NewGeneration Cooperatives (NGCs) business modelfor farmer-owned cooperatives.

Bill Holmberg, Chair of the New Uses Coun-cil (www.newuses.org), discussed the formationof the Biomass Coordinating Council (BCC),which will serve as the operating arm for biom-ass for the American Coalition on RenewableEnergy (ACORE). BCC’s mission is to:♦ provide encouragement and support to those

involved in biobased products,♦ promote optimization of energy efficiency,

environmental enhancement, and long-termsustainability of biobased industry,

♦ gain public and governmental recognitionand support for biobased industry,

♦ invite participation of industries andassociations in BCC,

♦ develop liaison relationships withinternational biomass companies andorganizations, and

♦ provide a registry of highly qualifiedconsultants committed to the mission andgoals of BCC.The BCC will assist in advancing the full

scope of the biomass industry, including pre-servation of soil quality and the full spectrumof biomass resources, the promotion of all indus-tries involved in production of biobased pro-ducts, and optimization of energy-efficiencyand life-cycle benefits (biorefineries@aol.com).

Clearly, many different types and sources offunding are available for R&D on biobasedproducts, and the list is expanding. There is aneed to demonstrate that biobased productshave benefits for society as a whole. There is aneed also to inform federal and state appro-priators and federal and state regulatory agen-cies—including DOE and USDA—on a contin-uous basis so that when projects and programsare being formulated and funded, the biocommunity is included.

Doing Business with the Department of

Defense

Moderator: Jerry Warner (Defense Life Sciences)

Recorder: Vance Owens (South Dakota State University)

Increasingly, the Department of Defense (DOD)

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is turning to industrial biotechnology for solu-tions to problems. DOD is interested in the de-velopment of biobatteries, portable biorefineries,enzymes for chemical and biological weapondecontamination, new biopolymers and bioplas-tics for clothing, sleeping bags, meal packagingand utensils, and other technologies. Opportuni-ties for biotech companies and researchers anddetails of how to work with DOD were theprimary topics discussed.

Issue: Obtaining Funds from DOD

DOD is a large organization with an imposingbureaucracy. The following are key points forobtain grant funds:

DOD extends formal request for proposals(RFPs) as well as Broad Agency Announcementsunder the Federal Acquisition Regulation. Un-like other federal agencies, DOD is a customerfor successful research; it consumes significantvolumes of goods and services. Its budget forFY05 will be almost $400 billion.

The Small Business Innovative Research/Small Business Technology Transfer (SBIR/STTR)program Web-site (www.acq.osd.mil/sadbu/sbir) provides guidance on potential research andpartnering.

Program managers should be consulted todetermine DOD’s potential interest in a specificresearch concept.Recommendation To be of interest to DOD, pro-posed research should include a commercializa-tion plan. Even basic research at an academic in-stitution will be more favorably viewed if an in-dustrial partner is involved.Issue: What Traditional Procurement Methods

and Public/Private Partnerships are Available?

Funding from DOD typically comes via one ofthe following:♦ Traditional procurement methods

a. Federal Acquisition Regulation (FAR)contracts

I. For FAR contracts, the primecontractor must be registered(www.ccr.dlis.dla.mil) and incompliance with various rules.

II. For individuals/institutions/industries with no priorexperience with DOD, it isrecommended that the first

award be obtained as a sub-contractor rather than as theprime contractor.

III.Opportunities for FAR contractsmay be found atwww.fedbizops.gov.

b. SBIR, STTR, and Fast TrackI. SBIR provides up to $850,000

to small businesses for R&D.II. STTR provides up to $850,000

per project for R&D to univer-sity/small-business teams.

III.Fast Track is a method of increa-sing the chance of obtainingSBIR or STTR awards and ofobtaining continuous fundingfor small businesses that canattract outside investors.

♦ Non-traditional public/private partnerships,such as

a. Cooperative R&D agreements (CRADAs).b. Patent licence agreements (PLAs).c. Transportation Security Administration

(TSA).d. Cooperative agreements, enhanced

use leases and other R&D transactions.

Overcoming Barriers to Growing a Biobased

Economy

Moderator: James Hettenhaus (CEAssist)

Recorder: Padu Krishnan (South Dakota State

University)

Barriers to growing a biobased economy in-clude lack of technology validation, need fortraining, lack of available feedstocks, publicperception/acceptance, government policiesand the need to engage stakeholders in theagricultural community. Farmers’ concerns interms of issues and benefits must be addressed.Only conflicting, anecdotal information is avai-lable. A transparent information base is needed.There is also need for a “better” business modelfor the farmer.

Issue: Feedstocks

The magnitude of scale involved in the collec-tion of feedstocks needs to be appreciated. Theagricultural sector continues to be focused onthe production of food, feed and fiber. Cropshave not been bred specifically for biomass; bio-

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energy represents a significant shift in emphasis.The challenge is how to shift beyond food cropsto energy crops.

Additional factors worthy of considerationinclude uncertainty in the energy market, prob-lems inherent in pioneering activities, and theage-demographics of farmers. Questions existon sustainability and environmental impact (notill, soil moisture, erosion, need for cover crops,topography and soil compaction). Storage sta-bility of biomass must be addressed; productspecifications will need to be standardized.

Farmers will need stable governmental agri-cultural policies. Studies will be required onequipment needs and tools for assessing sus-tainable biomass production and collection.

Issue: Business Models

Biomass production in significant amounts willrequire a long-term commitment from farmers.Large capital investments will be needed inprocessing plants. Parameters will need to bedefined in terms of processing-plant size; sub-sidies may be needed for small plants. Explo-ratory studies will be needed on transportation,preprocessing and storage. There is need forboiler-plate technologies.

Issue: Policy

Government support is needed in the launchingof any new technology. Social policies will needto keep pace with government policies to sup-port the new effort.

How will equity be raised?Issues requiring policy decisions include the

rural economy, the environment, and fuel security.

Using Industrial Biotechnology to Improve

the Bottom Line

Moderator: Marc Henniker (Strategic Decisions Group)

Recorder: Padu Krishnan (South Dakota State

University)

Although the number of participants was small(seven) they were diverse in affiliation and ex-perience. An informal discussion of experiencein industry and government occurred. Partici-pants were from Proctor and Gamble (P&G),the government of France, the government ofCanada and the American Chemical Society. Arepresentative of P&G used polylactic acid (PLA)and polyhydroxyalcanoate (PHA) as examples

of biotechnology initiatives. P&G has been in-terested in a bleaching alternative in the contextof the detergent phosphate ban.

A discussion of genetically modified organismsconcluded that the public debate had beenmishandled. Many consumers believe that littlebenefit will accrue from biotechnology. A govern-ment document that examined twenty-one biotech-nology case studies showed a positive bottomline. Governments seemed to approve of thetechnology.

Examples of alternatives to current practicesand uses were discussed, including zinc insteadof gypsum, PLA in “Armani” products, andenzymes in baking. There is no good handleyet on economic impacts. Key will be people,products and profit.

Building a Biobased Economy: Policy and

Financing Challenges (Sponsored by the US

Department of Energy Office of Policy and

International Affairs)

Moderators: Stephen D. Eule (DOE) and Andrew D.

Paterson (Environmental Business International)

Recorder: Arvid Boe (South Dakota State University)

The objective of this workshop was to help iden-tify the most critical business risks associatedwith building a biobased economy. It was de-signed to elicit industry input that could helpguide the development of policies and tools toaccelerate market penetration and addressfinancing issues underpinning industrial biotech-nology. Although industrial biotechnology hasthe potential to provide an alternative to conven-tional energy and chemical processes that are cost-competitive and have fewer environmental draw-backs, many hurdles remain to be overcome tofulfill this potential and make biorefining com-mercially successful.

The moderators distributed a documentDOE Risk Framework Study for Bio-refineries andBio-processing: Review of Key Risks, Federal Incen-tives and Financing Altenatives, by S.D. Eule andA. Paterson. The document was drafted specificallyto stimulate discussion by attendees at thismeeting. In it, the authors presented severalleading questions:♦ How have market factors and business risks

shifted since 2000 to favor construction ofbiorefineries (e.g., rise of oil prices and phasing

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out of MTBE)?♦ Few biorefineries are being built. Is it primarily

a matter of cost? Other business risks? Policies?♦ Which risks and policies most deter construc-

tion and operation of commercial-scale biore-fineries?

♦ Which policies could encourage wider com-mercial adoption of biorefineries (e.g., environ-mental regulations, state and federal financialsupport)?

♦ How can risk-targeted incentives improveprospects for biorefineries and bioproducts?

The attendees were invited to describe theirinterests relative to the focus of this workshop:

♦ Flexible farmer-owned biorefineries (e.g., in-vestors receive money from sale of corn whencorn prices are high and from ethanol whencorn prices are low).

♦ Integrated multi-partnered biorefineries.♦ New products from soybean.♦ How to utilize government to enhance/

support biobased programs.♦ Ethanol production from cassava.♦ Value-added benefits to farmers (e.g., demo-

cratizing ownership of new industries, personaland community benefits, feedstock diversity).

♦ How to unite multiple stakeholders.♦ How to finance multiple feedstock/multiple

products businesses.♦ Consumer willingness to pay premium for

“greener” products.♦ How to bring in farmers to maximize their in-

volvement in the value chain [e.g., producingcrops with multiple uses (habitat for wildlifeproduction and feedstock for biore-fining)].

Risks/concepts/issues presented in thedocument were discussed, more specifically:

♦ The roles of the various players (e.g., DOE,regulators, enzyme sellers, labs/universities,chemical companies, growers) and varyingviews of risk.

♦ An overview and approach to risk frame-work with emphasis on “showstoppers”such as energy policy incentives, systemperformance, enzyme costs, price of fossilfuels, and agricultural policies.

♦ Risk framework, with different risks at eachphase of investment.

♦ Reactions of a total of thirty respondentsrepresenting chemical/production com-panies, reagent suppliers/tech firms, labs/universities, and associations and govern-ment agencies to a Risk Questionnaire de-signed by the DOE Policy Office–Office ofClimate Change and Environmental Bus-iness International. Biotechnology RiskRatings were calculated using a probabilityx severity index for feedstock, delivery, bio-processing, and market issues/concerns.

The ensuing discussion included the followingquestions/concerns/concepts:

♦ What are consumers willing to pay for“green power”?

♦ What will be the public’s and environmentalactivists’ reactions to genetically modifiedorganisms being used in biorefineries?

♦ What are the prospects for governmentalpreferred procurement of biobased products(e.g., ink made from soybean oil)?

♦ Farmer involvement/support is crucial tothe success of biorefineries, without anymajor changes in public policy.

♦ Powerful momentum, driven by energy-security issues and climate change, exists forimplementation of biorefineries.

♦ Financing structures and federal assistanceshould focus on key risks.

Patent Protection and Patenting Strategies

for Industrial Biotechnology Inventions

Moderators: Lila Feisee (Biotechnology Industry

Organization), Blair Hughes (McDonnell, Boehnen

Hulbert and Berghoff), Paula DeGrandis (Cargill, Inc.)

Recorder: Arvid Boe (South Dakota State University)

The focus was on issues unique to patentingindustrial biotechnology inventions, includingidentifying and accurately disclosing a biotechinvention before it is proven or well understood.Discussion was expected to address:♦ tactics for perfecting early invention rights

and identifying the most valuable inventionsto patent, and

♦ strategies for obtaining the broadest possibleprotection.Attendee expectations included:

♦ to learn more about current trends in indus-trial biotechnology, intellectual property stra-

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tegies, and protection vs. trademark vs.trade-secret approaches,

♦ better understanding of opportunities forpatenting and protecting R & D entities,

♦ how to develop start-up companies fromuniversity-developed methodologies,products, etc.,

♦ expanded knowledge of patent law as itrelates to biotech, and

♦ increased understanding of process patents.The moderators described procedures

necessary to draft a patent application thatwill result in a valid claim. They pointed outthat a US patent is only enforceable in the US,and that US patent laws are quite liberal relativeto those of most other countries. Biologicalmaterials (e.g., processes, methods, biotechnology,DNA sequences, targets) and their uses insideand outside humans are patentable in the US.Many other countries do not allow patentingof bio-logical materials.

The moderators offered views on how todraft an application that will result in a validinvention claim. An invention exists when ithas been reduced to practice (i.e., when adefinite and permanent idea of an operativeinvention is known, including every feature ofthe subject matter sought to be patented). Aclaim will be valid provided that it is suffi-ciently described and enabled in the patentspecification. This requires, in most cases,detailed descriptions while not overreachingthe claim (i.e., claim only what is enabled).

The moderators initiated discussion on vari-ations in patent laws among countries. BIO ispushing for international harmonization of patentlaws since biotechnology is globally useful. Con-sensus is difficult to achieve, thus bilateral agree-ments are a place to start. Discussion addressedthe European Union’s progress in unifying patentlaws and creating enforcement programs.

A question—what is a continuation-in-part(CIP)?—stimulated discussion on filing strate-gies. Hypothetically, a CIP in the biotech areamay involve adding new data/claims to aninitial discovery filed earlier. The actual filingdate will depend on the nature of the newinformation. Dis-cussion continued on strate-gies for filing patent applications. Opinionsvaried, from keeping the invention a secret as

long as possible before filing a broadly encom-passing application to filing early which hasbecome the prevalent cor-porate strategy. Themoderators suggested filing a provisionalpatent application when commercial utilizationis not imminent. However, if commercializationwill likely occur in the near future, a provisionalshould not be filed. When filing for a patent of aprocess of lab-bench scale—although it may nottotally apply to the commercial level—make thedescription broad enough to adequately supportsuch a claim.

In response to a question on the relative valueof trade secrets vs. patents, the moderators statedthat in the health sciences, trade secrets are common;whereas, in biotech, platform technology isgenerally patented. If a trade secret is not createdor a patent application made for a process, descri-bing it in a published paper will preclude someoneelse from patenting it. Publishing a CIP alsowards off competition.

Should an application contain the mini-mum amount of information or be a fulldisclosure of the process? As much detail aspossible should be described. If unwilling todisclose information to competitors, don’t filean application.

If in possession of the best current process,but it will be several years before commercia-lization, what are pros and cons of filing now?The first filing should describe the method. Theprocess may be more complex several yearslater, but the basic steps will likely be the same.It depends on whether or not the invention is asingle step or a complete process and whetherthe invention at laboratory scale will be carriedthrough to commercial scale. From a researchstandpoint, file as early as possible; most fre-quently, advantage accrues to the first inventor.Patents in the United States are presumed to bevalid, therefore there is incentive to disclose techn-ology. When filing for a process or product, it’sa good idea to involve commercialization peoplewhen constructing the application.

To what extent does a patent prevent a rivalcompany using a proprietary process in theirinternal research? This would be infringement,but it is difficult to control. Negotiating researchlicenses is one approach, generating data in acountry that doesn’t recognize the patent isanother.

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DOE Genomics—the GTL Program and

BIO—Forging a Critical Partnership in

Industrial and Environmental Biotechnology

[Sponsored by the US Department of Energy

(DOE) Genomes to Life (GTL) Project]

Moderators: John Houghton (DOE), Michael Knotek

(Consultant for DOE), Ari Patrinos (DOE), and

George Michaels (Pacific Northwest National Laboratory)

Recorder: Arvid Boe (South Dakota State University)

The focus was on microbes that maintain theplanet’s geochemistry and have diversecapabilities for using myriad energy sources.It was stressed by the moderators that, oncedeciphered, microbial capabilities will be thefoundation for a new biotechnology that willmeet DOE mission needs and will help fuel theIndustrial and Environmental section of BIO.The result will be creation of new net-zero car-bon-emitting energy sources, reduction in depen-dence on foreign oil, sequestration of greenhousegases, and remediation of contaminated environ-ments. The workshop introduced DOE missionchallenges that reflect pressing national andinternational needs, presented the DOE GTLprogram, and identified potential partnershipopportunities and avenues for further discussion.

Presentations by each moderator, followedby discussions with the attendees.

John Houghton explained the US DOE’sinterest in clean-energy technologies and indeveloping biotechnological tools to mitigatethe effects of global climate change.

Michael Knotek presented the potential roleof biotechnology in the National Climate ChangeTechnology program. He apprised the group ofthe national commitment to understanding andmitigating climate change, as indicated by theUnited States signing on to the United NationsFramework Convention on Climate Changeand the formation of the Climate Change ScienceProgram and the Climate Change TechnologyProgram. He pointed out that microbes and bio-technology will play important roles in solvingour energy, climate, and environmental problems.He identified the DOE Genomics: GTL programas a foundation for solving those problems andlisted numerous way in which biotechnologymay contribute.

Ari Patrinos discussed the DOE Genomics: GTLprogram and the DOE’s high-throughput faci-

lities. He stressed that the DOE started thehuman genome project and that their goal nowis to “break the mold on how biological researchis done.” The GTL program takes a systemsapproach to understanding critical microbialprocesses useful for the DOE missions of cleanenergy, environmental remediation, and carbonsequestration. Biotechnology can play a major rolein the global energy technology portfolio, andserious R & D efforts should be started immediately.The knowledge base resulting from GTL activitieswill transform the life-sciences landscape andprovide a new foundation for biotechnologyapplications and solutions to DOE missions(e.g., development of efficient ways to produceenergy and removal of contaminants from theenvironment).

Patrinos explained why the DOE is focusingon microbes for its genomics work. They com-prise about 60% of the biomass on Earth, andmediate our existence. Sequencing their genomeswill increase understanding of the mechanismsthey have harnessed and will stimulate new bio-technologies. Exploration of microbial systemshas begun in the areas of industrial processes,radioactive-waste cleanup, and mitigation ofglobal climate change (e.g., the bacterium Shewa-nella can immobilize uranium from ground-water and precipitate it on its membranes).

Patrinos outlined the goals of the GTL program:♦ to identify and characterize the molecular

machines of life,♦ to characterize gene regulatory networks,♦ to characterize the functional repertoire of

microbial communities, and♦ to advance understanding of complex bio-

logical systems and predict their behavior.These goals will be accomplished in associa-

tion with computational tools needed to createuseful databases. He stressed the importance ofproviding the right facilities to democratizeaccess to system-biology resources and freescientists to get involved in biological discovery.Such geno-mics-user facilities, for which accesswould be awarded on a competitive basis,would include:♦ production and characterization of proteins

and molecular tags,♦ characterization and imaging of molecular

machines,

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♦ whole proteome analysis, and♦ analysis and modeling of cellular systems

and microbial community dynamics.

George Michaels commented on DOE’s planto put in place facilities to enable scientists towork together and have access to instrumen-tation otherwise unavailable. Genomics wouldbe treated as an information science, with DOEcontributing the computational science to achievewhatever needs to be done (e.g., access to dataat an unprecedented rate, modeling of fundamen-tal cellular processes).

Question from an attendee: How will GTLinterface with the industrial community?

Moderator’s answer: GTL will provide thefundamental discovery work. Microbes containcountless yet-undiscovered genes that haveenormous potential for biobased industrialuses. DOE hopes to see the jump from scienceto marketplace dramatically shortened as thedistance between scientist and technologist iscorrespondingly shortened.

Q: What is the role of the Industrial AdvisoryBoard?

A: It will prioritize what research will beconducted at the facility. Scientists will submitapplications for sequencing activities, and thescientific community will determine who willbe allowed to use the facility. DOE would liketo see an industrial coalition to help guide GTLand provide a level of validation.

Q: How do you use genomics to predictwhat a particular organism will do in a partic-ular situation?

A: This will become possible once we under-stand how microbes interact with their envir-onment.

Q: How do you plan to work with the inter-national community?

A: Those possibilities are in place. DOE hasthe flexibility to fund almost anybody, anywhere.

Identifying and Overcoming Barriers to the

Diffusion of Industrial Biotechnology in the

Chemical Industry

Moderator: Larry Drum (BIOLarry Consulting)

Recorder: William Gibbons (South Dakota State

University)

The following items were cited by the group asbarriers to penetration of biotechnology in thechemical industry:

♦ lack of availability of capital for small companies,♦ need for examples of successful programs

with profitability for use by large and smallcompanies to show that the technology canyield significant value,

♦ lack of cooperative efforts that can or havebenefited industry,

♦ need for examples of deal structures that workfor the chemical industry—value sharing vs.margin in deals,

♦ replacement technology examples vs. newproduct economics,

♦ large amounts of capitalization are neededto be successful in the industry:

– biorefineries—scale vs. product mix– feedstock quality– infrastructure for feedstocks,

♦ industry development model—top down vs.bottom up (technology driven goes to thehighest value targets first and a low-costraw material driven effort goes to the largevolume uses first),

♦ elucidation of the drivers that will compelthe industry,

♦ for companies that have not been involvedin the life sciences and even for those thathave, in some cases, risk is perceived ashigher with biology-based technology thanwith chemistry-based technology,

♦ for performance-based chemicals (andpolymers) determining product value is anadded hard-to-assess dimension,

♦ there is need for comprehensive studies:– value-chain benefits for all– need for inclusion of the consumer in

the equation– full life-cycle analysis,

♦ there is need to shape policy with comprehensiveinformation,

♦ isolation of the chemical companies from theend-consumer and the impact of that on pro-duct development—consumer companies aregetting into the act (Toyota, P&G) becausetheir suppliers are not responding to theirneeds and are not coming up with the solu-tions they seek—plastics traceability is anexample,

♦ time to market should favor biotechnologyas the technology advances,

♦ critical mass of product to make a complete

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change (the plastics industry has many pro-ducts and to make a complete change somecompanies will need many new product intro-ductions in new polymers, not just one or two),

♦ vertically integrated companies are resistantto change because of sunk capital.

After much discussion, votes were taken andthe most important were deemed to be:♦ degree of capitalization needed,♦ need for comprehensive studies,♦ deal structures that work for the industry

When these issues were addressed, direc-tions became less clear. We need a standar-

dized process that can deliver low-cost rawmaterials to allow quick penetration of thetechnology. Certainly, sponsorship of researchthat allows the use of the lowest-cost rawmaterials is needed. Partnerships with farmerswill also be needed. The development ofscaleable processes and the use of dry millconcepts are details to be addressed.

On the need for studies and deal struc-tures, industry, universities and governmentshould work together. Many thought thatuniversities should be at the center of theeffort. Others thought it should be driven byindustry.

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