EBI: Now more important than ever

In 2008, after a competitive bidding process, UC Berkeley, LBNL and University of Illinois-Urbana-Champaign started a ten-year research partnership with BP called the Energy Biosciences Institute (EBI). The goal in creating the EBI was to establish a research program where modern tools of biology are applied to generate new and improved fuels. I contributed to the proposal and am currently serving on the Executive Board of the EBI. I believe that this initiative is important for the world, the nation and our university.

Organisms like plants and algae can provide an alternative source of fuel, which is desperately needed due to climate change and the exhaustibility of fossil fuels. So, when I heard about the competitive bidding process started by BP about four years ago, my first response was, “it’s about time.” For me, it was an indication that major oil companies finally realized that they needed to begin looking for renewable fuel alternatives.

At the time I was doing research on the first generation of biofuel: the production of ethanol from sugarcane and corn. My research suggested that diversion of food crops to biofuel is likely to increase food prices. I was also aware that corn ethanol led, at best, to a modest reduction of greenhouse gases emissions compared to oil. However, research on biofuel was in its infancy, and with a strong track record of crop science to increase crop yields and the evolution of new tools of modern biology, I was convinced that if we made a concerted effort to develop efficient and environmentally friendly biofuels, we had a good chance of succeeding.

As an economist, I maintain that the best policy to address greenhouse gases and energy scarcity is to raise the price of fuel by introducing fuel taxes. The revenue generated by these fuel taxes would allow a reduction in either sales or income taxes, and higher fuel prices would lead to conservation and innovation. Another good policy is introducing product and zoning standards that can lead to energy conservation and are actually cost-effective.

But there is a limit to what conservation can do; even many ardent environmentalists drive cars. Furthermore, there are billions of people in the developing world who will increase their fuel use, so we will need new sources of fuel. The growing global demand for fuels will be met one way or another and some of the sources, including oil from tar sands and drilling from deep in the ocean, are not very pretty. When we consider new sources of energy, biofuels are among the most technically feasible, least expensive and renewable. This inherent renewable quality is what makes biofuel such an attractive alternative to fossil fuels. As such, I thought it was great that a major energy company decided to invest in biofuel. Energy companies have the resources, supply chains and knowledge required to commercialize biofuels. What they lack is a basic knowledge in biosciences, which is why they chose to work with and learn from universities that have top programs in the field.

In spite of our current economic problems, America is a huge success; one of the secrets to it is the “educational industrial complex.” Namely, we have many of the best universities that build human capital that allows industries to address new challenges. Moreover, university research provides the foundation to many cutting edge industrial initiatives nationwide. It also results in new concepts that are mostly proven in the lab, but require a large amount of money in development, regulatory research and commercialization to translate these innovations into the creation of new products.

Frequently, companies get the rights to university patents and invest in their development and commercialization, and university professors develop some start-ups*. Google, Yahoo, Hewlett Packard and Intel among others benefited from transfer of human capital and technologies from universities. Two university professors, Herb Boyer and Stan Cohen, invented the technique for recombinant DNA, a key building block of the medical biotechnology industry. Herb Boyer was a co-founder of the biotechnology giant Genentech of South San Francisco. Amgen, of Thousands Oaks is another biotechnology giant co-founded by a university professor. Every summer I organize a program called the Environmental Leadership Program where people mostly from developing countries come to California for a three-week period of learning and exchange on sustainability and development issues. What they want to learn most about is the innovative genius of California, Silicon Valley and modern life science, recognizing that universities are spawning much of the new industries and are the engines of growth.

In the past we neglected investing in alternative energy. Even now, government support for research in alternative energy is insufficient. Both public and private money is needed to catch up and enable universities to start the process of the co-evolution of university research capabilities and industrial capacity that would lead to a clean and affordable renewable energy.

Some people worry that when private companies give universities money, the company will take advantage of the intellectual property. In many cases, technology is a buyer’s market and one of the problems with much of university research is that a lot of great ideas are not commercialized, and having an interested party involved in the process is likely to increase commercialization. Furthermore, the outcomes of research of university projects like the EBI are uncertain. There is a high likelihood that some of the most important innovations would not be utilized by BP but would actually be of use to anther company. Finally, universities develop procedures to protect their own and their professors’ interests, and there is ongoing research that scrutinize the process of technology transfer and hopefully lead to their improvement.

I am really excited that the EBI has been established in Berkeley. Academia is competitive and to be successful you need resources. Berkeley is a public university, and though the state does a fabulous job providing us resources, that can only get us so far. The donations and contracts we receive from federal agencies and private companies, such as the support we received to manage the national labs, are crucial in making Berkeley a world-class university. They allow us to upgrade our infrastructure and recruit the best professors and top-notch students. Especially given the recent financial crisis and the resulting decline in state support, we have a choice between being “pure” and slowly becoming mediocre, or engaging in partnerships that will allow us to maintain excellence and to contribute to solving major global problems.

Some people ask me how I feel about the EBI in light of the recent BP Deepwater Horizon rig accident. Obviously this was a major disaster and even though I don’t have first-hand knowledge, I’m sure that BP made a lot of mistakes. However, BP does not own Berkeley, they are only partners, and we are not responsible for our partners. We collaborate with many organizations that get into trouble. We are not responsible for mistakes made by the USDA, mismanagement by the Federal Reserve, monopolistic practices of Intel and Microsoft, etc. Actually in the case of the disaster in the Gulf of Mexico, Berkeley faculty provided knowledge that helped BP and the government to analyze the situation that will improve the final outcome.

Another stated concern is that BP will control the research agenda of the Berkeley faculty. The range of issues that are included within the EBI is well-defined. My experiences on campus have taught me that a key criteria in getting tenure and being promoted as a Berkeley professor is research excellence and publication in top journals. How much money you bring and from where it is derived is much less important than the quality of your research. Professors will engage with the EBI as long as its agenda is consistent with their own research agenda. The EBI expanded the resource base in Berkeley and provided new opportunities, but overall it is a small part of a large portfolio.

Thus far, I have enjoyed my experience with the EBI. The EBI is hardly three years old, yet its research has provided new knowledge for more efficient and sustainable management of a perennial grass – Miscanthus – that is likely to be a very productive feedstock for cellulosic ethanol. EBI researchers have also identified a new class of fungal enzymes that increases the efficiency of converting cellulosic material into fuels. The EBI has allowed me to pursue my research that analyzed the impacts of biofuels on food prices, land use and greenhouse gas emissions; suggested that the best solution to our energy problem is taxing fuels (which would not serve the interest of BP); and raised concerns about various forms of biofuel farming in developing countries. The point is that BP has not controlled and is not likely to control our research agenda and findings because they didn’t come to the university knowing the answers and looking for refinements. They came because they expect the university to conduct studies and generate knowledge that will lead to new opportunities.

Recent developments like the accident in the Gulf of Mexico, the crumbling of the global negotiation on climate change in Copenhagen, and the failure of U.S. Congress to enact a meaningful climate policy, all emphasize the importance of initiatives that aim to produce efficient and green alternative energy solutions. We need more initiatives like the EBI to provide a knowledge foundation that will trigger a change in our energy and climate situation.

*If you would like more details on technology transfer from universities to the private sector, please see:

Graff, Gregory, Amir Heiman, and David Zilberman. “University Research and Offices of Technology Transfer,” California Management Review, Vol. 45, No. 1 (Fall, 2002), pp. 88-115

Graff, Gregory D., Susan E. Cullen, Kent J. Bradford, David Zilberman, and Alan B. Bennett. “The Public-Private Structure of Intellectual Property Ownership in Agricultural Biotechnology,” Nature Biotechnology, Vol. 21, No. 9 (September, 2003), pp. 989-995