Friday, December 20, 2013

Making the Most of Methane

There are few other more potent greenhouse gases than methane.  It is a major culprit in degrading the ozone.  Belching cows account for 16% of the world’s annual methane emissions to the atmosphere.  Some might suggest muzzling livestock, but a more effective approach is probably to find practical uses of methane. 

What is more, there are more practical sources of methane.  It is a major component of natural gas  -  87% by volume.  Ever increasing amounts of methane are expected as oil and gas exploration taps into previously stranded deposits of shale gas.
Privately held Calysta Energy is developing technologies to turn methane into valuable liquid fuels and chemicals using natural gas as feedstock.  The company was spun out of DNA 2.0, a developer of synthetic gene supplies.  Calysta has developed proprietary processes for the identification of enzymes and efficient gene expression.  The enzymes are used as biocatalysts to turn natural gas into alcohols, esters, oxides and olefins. 

Despite its bad reputation as a greenhouse gas, compared to other hydrocarbon fuels, burning methane produces less carbon dioxide for each unit of heat released.  Natural gas, which is mostly methane, burns well as a power or heat source without emitting sulfur dioxide, mercury, or particulates into the air or leaving ash behind.  This is a significant improvement over coal.  The switch by power plants from coal to natural gas has been a significant contributor to reduced carbon dioxide emissions in the U.S.

Calysta expects to locate near significant natural gas sources, capturing methane an converting it to valuable fuels and chemicals.  Management claims is will cost less than half to produce these fuels and chemicals than through algae- or sugar-based methods. 

Earlier this month Calysta Energy received $3 million in a Series A stock offering from a venture capital group led by Pangaea Ventures Ltd.  The financing will be used to support further development of enzymes and organisms that can convert natural gas feedstock to chemicals and fuels. 

The company has offered no introduction dates for commercial products as yet.  However, in June 2013, Calysta did forge a partnership with NatureWorks for the development of lactic acid for bioplastics.  I expect to hear more from Calysta in coming months about development partnerships like this one that could pave the way for commercial products.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.


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