Spokane-based energy company Avista (NYSE: AVA) has made an investment of an undisclosed amount in the Seattle-based biotech company Matrix Genetics, supporting the company’s development of blue-green algae as fuel and petrochemical substitutes.
The investment will likely allow Matrix to spin out from the agro-biotech firm Targeted Growth and enable it to continue its research agenda. Targeted Growth is still the majority owner of Matrix, although they are separate companies. Matrix presently has five employees, and hopes to add 10 more using the investment funds.
Should Matrix secure enough customers to use algae sourced from company-owned patents, Avista stands to make a very positive return on its investment.
Algae biofuels is a growing sector, thanks to the low cost and ease of operations involved. Unlike corn and soy-based fuels, it doesn’t compete with the food sector. Plus, compared to corn’s capacity to produce 400-450 gallons per acre in a year, algae can produce up to 2,000-3,000 gallons of oil per acre per year. Most recently, a Pacific Northwest National Laboratory report stated that 17 percent of U.S. oil imports could be replaced by algae biofuels.
Matrix is currently working on increasing oil content of algae through genetic engineering. According to senior director Mike Carleton, what they are doing essentially mimics what happens naturally below ground in the creation of crude oil.
A major challenge for the company now is achieving an economy of scale which can leverage further operations and scalability.