Memphis Bioworks Heads to the Farm

The Daily News
June 4, 2008
By Scott Shepard

The Memphis Bioworks Foundation has taken the next step in its development strategy by formally targeting biofuels and related products.

Since it was founded in 2001, Bioworks has concentrated on human medicine, and mainly on real estate issues; one of the first needs was lab space to help recruit scientists, which involved the 2005 implosion of Baptist Memorial Hospital along Union Avenue to make way for the UT-Baptist Research Park.

Bioworks also has renovated nearby properties and worked with the University of Tennessee Health Science Center on several projects.

With those steps now in motion, Bioworks is expanding its horizon by forming a dedicated AgBio Division and forming a partnership with BioDimensions, a consulting firm that has relocated its headquarters to Memphis to serve clients in the Delta.

“BioDimensions brings a wealth of expertise in critical areas of AgBio that will jump-start the foundation in this critical area,” said Steve Bares, president and executive director of Bioworks. “They bring the connections that we’re trying to learn. They bring a connection to the farmer. If you look at where we are today, we need a strategic plan. It’s one thing to know you have the assets, but another thing to prioritize and create an action plan.”

Strong assets

BioDimensions brings experience and key contacts in areas such as new crops and crop science, Bares said, plus agricultural bio-based technology, federal and state program management, AgBio business planning, overall farm science and industrial biotechnology.

In 2003 Battelle released a study commissioned by Memphis Tomorrow recommending key industries in which Memphis has a competitive advantage. Best known today are orthopedics, musculoskeletal products and oncology.

Those dovetail with the local logistics industry, which provides regular overnight delivery of medical products; in the case of emergency trauma, companies such as Smith & Nephew Orthopaedics promote same-day service by using a next-flight-out strategy.

Those same assets also dovetail with AgBio, Bares said. Memphis is at the center of a vast farming area and is home to a number of large chemical companies.

“We have the land, the low-cost logistics and a very successful chemical industry,” he said. “The only difference with AgBio is that the raw material is not a barrel of oil but a product from a farm field. We’re at the cusp of a transition from an oil-based economy to a bio-based economy.”

Heading the initiative is organic chemist Randall Powell, former president of Eastman Chemical Co. in Batesville, Ark. While there, Powell led a leveraged buyout of the plant and became president and plant manager of the newly formed Future-Fuel Chemical Co.

Dependent on petroleum as feedstock, the plant had huge, underused capacity, competing with imported chemicals from countries such as Indonesia, which have an abundance of oil underneath. Powell reorganized the plant so it could process locally grown crops into products.

“This is a talent business,” Bares said. “I met Randy three years ago in Batesville, and I kept in touch. When he was ready to leave, I offered him a position.”

Staying away from ethanol

AgBio is much more than biofuels, Powell said, and will involve a wide range of renewable agricultural and forestry materials.

“It’s about using these materials as the basis for new industrial processes that generate less waste and provide eco-friendly alternatives to the use of petrochemical feedstocks,” he said.

One area that definitely will not be pursued is corn-based ethanol, Bares said. The Midwest Corn Belt is organized as an agricultural factory to produce and process corn; most of the new ethanol factories are being built there.

“We have not and will not think about corn-based ethanol,” Bares said. “Ethanol is going to be the lowest-margin business, and for us to compete we have to have a very strong edge.”

Ethanol also may be a house built on sand; critics say that producing ethanol consumes more energy than it yields, meaning a net energy loss. Critics also have said ethanol is only financially viable because it gets more than a dollar per gallon in direct federal subsidies: a 51-cent tax credit and a 54-cent tariff that blocks imports. Corn farmers also collect federal crop subsidies: $56 billion in the last 12 years, with a high of $9.4 billion in 2005, according to the U.S. Department of Agriculture.

The National Corn Growers Association, whose members receive those benefits, argues otherwise, saying ethanol is a fledgling industry and needs the protection to become viable.

Bares cited projects already working in East Tennessee where crops and agricultural waste are converted to basic sugars for manufacturing fuel. One product likely to become big in the Delta region is switchgrass.

“Switchgrass grows on marginal land that doesn’t compete for food,” Bares said. “A cow eats grass and converts cellulose to sugar in a biologic process; we want to do that.”

This creates new opportunities for biological scientists in Memphis, he said, who can study the chemicals and enzymes in the gut of cows and build a synthetic version of the process.

Another intriguing crop is camolina, a type of rice that would grow well in Arkansas and yields a bio-based lubricant.

“Unlike the corn industry in the Midwest, we don’t have an indentured crop base, so we can make the switch more easily,” Bares said.

In recent years soy-based biodiesel has garnered a lot of attention, but that’s also likely to change. Soybeans are an essential component in a number of other products, and, at 20 percent oil, are not the best source for diesel.

Jatropha is a shrub native to the non-farm scrublands of New Mexico that has a 35 percent oil content; canola grows well on marginal land in the upper Midwest with up to a 44 percent oil content.

In Hawaii, where coconuts are considered akin to a pest weed, their fruit yields 43 percent oil that’s being converted locally into biodiesel.

The Hawaii example is what Bares likes for using crops as locally as possible to cut costs, bearing in mind that chasing fuel is going with the herd. He intends for Bioworks and Memphis to blaze new trails.

“Fuel is exciting, but sugars for ethanol are at the bottom of the market,” he said. “At the high end, where we want to concentrate, are things like new fibers and new plastics grown in the form of plants.”