Executive Q&A viewpoint

Bob Walsh, Senior Vice President, Intrexon Energy, San Francisco, California 

The GTL market has seen new and smaller-scale technologies emerge over the past several years as production of liquid fuels from natural gas becomes more customized and localized. Some of these technologies have emerged from applications outside of oil and gas.

Intrexon Corp., a synthetic biology technology company, is focused on collaborating with other companies to create biologically based products. The company applies engineering to biological systems to enable DNA-based control over the function and output of living cells. Intrexon seeks to develop applications in energy for the production of renewable fuels and other resources.

Among Intrexon’s bio-based technologies is a proprietary methanotroph bioconversion platform for the generation of fuels and chemicals from natural gas, at a fraction of the costs of more traditional conversion methods. Gas Processing spoke to Bob Walsh, senior vice president of Intrexon Energy, about the recent developments in the GTL market and the future of transformative GTL production technology.

GP. What are the benefits of biological GTL processes compared to traditional refining?

BW. Compared to traditional refining, biological GTL conversion offers several benefits, particularly when taking into consideration the end product. Traditional refining technologies generally create a mix of products that require additional processing, thereby increasing both energy consumption and costs. This challenge can be overcome by developing specialized solutions for the production of targeted chemicals in a single and simple process. For example, recent breakthroughs in genetic engineering allow for the processing of natural gas into isobutanol, a high-value, alcohol-based organic compound that can be used as a gasoline blendstock and chemical intermediate.

This innovative process allows not only for the transformation of methane into a more valuable product—with more than 50% of the methane being processed into isobutanol in a fermentation process—but it also makes its production significantly more economical at smaller scale. Additionally, this innovative type of bioconversion requires less energy than traditional refining, further lowering the production cost and creating a compelling value proposition for refiners.

GP. What is changing in the GTL world?

BW. Traditionally, large-scale GTL projects have been limited to countries with abundant natural gas reserves, such as Qatar and Malaysia. As GTL technologies continue to evolve into economical solutions at even smaller scale, we are seeing more of these projects appear in other parts of the world, such as North America.

GP. What are the challenges of existing biological GTL technologies, and how can they be overcome?

BW. Most biological GTL technologies are still being tested. The biggest challenge facing the industry at this stage is finding the right organism for the job. While many companies focus on known microbes that naturally transform methane into different sources of carbon, others use devised solutions to alter these organisms and control what they can produce.

Using synthetic biology, Intrexon Energy was the first company to take a methane-consuming organism, called a methanotroph, and genetically engineer it to produce isobutanol. Intrexon’s methanotroph platform can transform the GTL industry by generating fuels and chemicals at a fraction of the cost of traditional conversion methods.

GP. How does Intrexon’s technology compare with proven Fischer-Tropsch (F-T) GTL technology?

BW. F-T technology was designed nearly 100 years ago, and it remains a costly and complex solution. In addition to the several steps and the refining required by the F-T process to convert natural gas into liquid hydrocarbons, this solution is also economical only when deployed on a large scale.

Biological GTL processes offer a much nimbler solution that is optimized to generate profits at a smaller scale, resulting in lower capital costs for refiners. Furthermore, the methanotroph can be re-engineered to produce select fuels and chemicals, which increases flexibility from an operational standpoint.

GP. What breakthroughs did Intrexon’s technology require to be successful?

BW. Over the past two years, Intrexon has worked to refine its “toolbox” of approaches for methanotroph gene modification. The methanotroph’s genetic code needed to be understood, broken down and then rebuilt for isobutanol production. Intrexon is now able to efficiently revise gene selection and consistently produce colonies with the traits needed to yield isobutanol. The energy division is moving closer to its 2016 goal of commercial plant site selection, with small-scale commercial production slated for 2018.

GP. How do you see new solutions like Intrexon’s affecting the GTL market?

BW. F-T platforms are only viable at a large scale in select parts of the world, which limits refiners’ ability to deploy them economically in other regions. Intrexon’s methanotrophic platform was designed with scale in mind and allows for a distributed model.

GP. Are you a competitor for other natural gas outlets, such as LNG?

BW. Thanks to its low cost and availability, natural gas is a highly sought-after commodity by different industries within the energy sector, including LNG. While the process of liquefying methane is key to making the resource transportable, it is an energy-intensive process that does not add value to natural gas. Instead, processing methane into products like isobutanol effectively transforms it into a cleaner-burning fuel that corrodes less, has a higher energy content and is compatible with existing pipeline infrastructure.

GP. Is stranded natural gas or biogas an option?

BW. The methanotroph is able to process stranded natural gas, as well as biogas. Some challenges exist in commercializing these sources. While stranded natural gas reserves are plentiful around the world, they can be found in remote locations, which often make them uneconomical to extract. Biogas, on the other hand, is available near urban centers, but the quantities produced are generally too small and variable for industrial processing. We will look for the right opportunities in this area.

GP. Why are so few biotech companies pursuing this technology pathway?

BW. The quest for cleaner-burning fuels has led many companies to create products that are expensive, inefficient or not scalable. Additionally, many companies prefer to explore opportunities with known organisms and develop alternative fuels using food sources, like corn and sugarcane, which compete for land and water. Intrexon’s proprietary approach focuses on bioengineering a new organism that can generate margins 5–10 times that of conventional fuels because inexpensive natural gas is used as feedstock.

GP. What global regions are likely to drive innovation in the GTL market, and why?

BW. At present, North America and parts of the Middle East are leading the way in the development and introduction of new GTL solutions, due to plentiful reserves and constant demand for natural gas from the rest of the world. In addition to being the locations where tremendous amounts of natural gas can be found, these regions benefit from existing infrastructure and extensive know-how, which make them a natural test bed for transformative GTL technologies. GP

Bob Walsh has served as senior vice president of Intrexon Energy since 2013. He has more than 30 years of experience in the petroleum and chemical industries. Previously, Mr. Walsh served as chief commercial officer of ZeaChem Inc., a cellulosic biofuel and biochemical company, from 2011 to 2013. He also served as chief executive officer of Aurora Algae Inc., an algae production company, from 2008 to 2010; as president of LS9 Inc., an industrial biotechnology company, from 2007 to 2008; as senior vice president and chief operating officer of Chemoil Corp. from 2005 to 2006; and as general manager of supply (Europe) for Shell Europe Oil Products from 2001 to 2006. Mr. Walsh holds a BS degree in chemical engineering from Purdue University.