Thursday, September 16, 2010

Why Harrison Dillon and His Algae to Oil Machine Need to Make Us Smile

When Harrison Dillon took the stage at TEDx Atlanta this week to talk about renewable oil and bioproducts, I was admittedly in continuous partial attention mode but soon the President and CTO of Solazyme had me fully engaged as he told his story about algae derived crude oil.

The Solazyme solution is technical elegance. Get the right kind of algae, feed it biomass in a fermentation plant, and extract the residual crude oil at an 80% yield. This renewable crude algae oil can be transformed into everything from fuel to facial cream.

Skeptical? Maybe you've seen far too much biotech and biofuel vaporware, but Solazyme recently delivered 1,500 gallons of jet fuel to the US Navy.

Crude Oil From Algae

Harrison is scary smart, well spoken and passionate. He has an impressive eye watering CV but presents authentically and humbly. His company was recently named to the Red Herring Global 100 list, has attracted rounds of investment from people such as Richard Branson, and is producing a tangible and transformational technology at a time when we are facing wicked energy and environmental problems. But Solazyme is facing one vexing problem: scale.

The Paradox of Scale

In order to break into existing markets, Solazyme has to meet the current market expectations of production scale - it's not cost efficient to buy from the "little guys" even if they are doing the right thing. Expectations of scale present a paradox - you can't scale if you don't sell, and you can't sell if you can't produce at scale.

One way to break out of the paradox of scale is to increase demand for your particular product or service. Two ways to do that are by increasing consumer demand, or by legislating demand via policy.

Harrison argues that the policy change needed is a comprehensive national energy policy but that is difficult because the cycle of change for energy is about ten years, yet our political cycle is just two years. This is yet another problem of scale, the scale of enacting an energy policy exceeds the scale of our political attention span.

Increasing the consumer demand is also another problem of scale, in fact it's a tragedy of scale.

The Tragedy of the Commons

In an impassioned plea, Harrison reminded the TEDx audience that "We are all in this together. We need to care. We need to innovate."

Harrison is right. We are all in this crisis of environmental resources together, but we have been trained to think and behave as if we are all in this alone. We are facing the problem of scale that Garrett Hardin described in 1968.
The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently, and solely and rationally consulting their own self-interest, will ultimately deplete a shared limited resource even when it is clear that it is not in anyone's long-term interest for this to happen. [ref: Wikipedia]
This is no more obvious than in the United States. We consume more oil than any other country. We produce roughly a third of what we consume. Twenty-two percent of our oil imports come from "unstable" or at risk countries - and yet Mills Snowden of Team HyPower reminded us that the number one selling automobile in America is the Ford F-150 (fuel economy: 19 mpg highway, 15 mpg city), followed by the Chevy Silverado (fuel economy: 20 mpg highway, 15 mpg city). If you walked through the parking lot for the TEDx event, SUVs reigned supreme. We are creating and perpetuating our own tragedy.

I'm not throwing stones, I'm as trapped in the tragedy as anyone else. The question is how do we get out?

Irrationality Has an Upside?

The problem facing innovators and problem solvers like Harrison in the midst of the energy and global warming crisis is our inability as humans to escape our own decision-making processes. As Dan Ariely says:
If you wanted to design a problem that people would not care about, it would basically look like global warming.
Ariely believes we need to attack the tragedy of scale in ways that scale, like the human ego.

What Harrison Dillon, Farmer D, Team HyPower and everyone else trying to make a dent in the sustainability tragedy of the commons is not more untimely and unmanageable legislation - they need help finding ways to make us smile, just like Prius owners.


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