A much-trumpeted partnership of one of today's most celebrated scientists and the world's largest publicly traded oil company seems stalled in its aim of creating mass-market biofuel from algae, and may require a new agreement to go forward. The disappointment experienced thus far by scientist J. Craig Venter and ExxonMobil is notable not only because of their stature, but that many experts think that, at least in the medium term, algae is the sole realistically commercial source of biofuel that can significantly reduce U.S. and global oil demand.

Venter, the first mapper of the human genome and creator of the first synthetic cell (pictured above), said his scientific team and ExxonMobil have failed to find naturally occurring algae strains that can be converted into a commercial-scale biofuel. ExxonMobil and Venter's San Diego-based Synthetic Genomics Inc., or SGI, continue to attempt to manipulate natural algae, but he said he already sees the answer elsewhere -- in the creation of a man-made strain. "I believe that a fully synthetic cell approach will be the best way to get to a truly disruptive change," Venter told me in an email exchange.

Venter made his remarks before a conference this week on the future of energy at the New America Foundation in Washington, D.C., and in subsequent emailed replies to questions.

Read on to the jump for the rest of the story including Q&A.

A drive to reduce dependence on fossil fuels -- because of vulnerability to the volatile Middle East, concern about global warming, and the hundreds of billions of dollars spent on oil imports -- lies behind such efforts to create a scaled-up biofuel. Since up to half of algae is already oil in its natural state, many experts say it is a superior alternative to biofuels created from agricultural products such as corn, palm and switchgrass, which contain much smaller percentages of oil.

When announced in July 2009, the Venter-ExxonMobil alliance of colossals attracted wide publicity. It called for ExxonMobil to spend up to $600 million if publicly undisclosed milestones were reached in the lab. The Wall Street Journal said the partnership might signal "a coming of age" for algae biofuel. Greenbang fretted that the alliance might actually prove "unholy," but not Gigaom, which said it could be "algae's big break."

The terms of the alliance omit the fully synthetic approach that Venter is now advocating, so he is conducting "an ongoing dialog" with Exxon about a new agreement, he said. He appeared to suggest that such a new compact would require more Exxon investment.

ExxonMobil spokesman Alan Jeffers suggested that the company has a different assessment of the alliance's state of play. "The ExxonMobil-SGI algae project is ongoing and has reached no such conclusions as characterized in your note," Jeffers told me in an email. (I had asked whether it is true that the alliance had failed to find a suitable strain of natural algae, and that Venter was seeking to shift to a new stage of research.).

What we may be witnessing is simple friction between the well-known conservative ways of Exxon and the free-wheeling, iconoclastic Venter. In this case, Venter from the outset may have wanted to move directly to the test-tube and create his own algae, while Exxon -- holding the purse-strings -- advocated a less-expensive, step-by-step approach starting with existing strains. There is no sign of anything approaching a rupture. But if the alliance does eventually fail, it would be a serious blow for Venter, who has said that to succeed he needs access to the deep pockets of a Big Oil company, and to a significant but lesser degree for ExxonMobil, which has widely promoted the partnership as evidence that it is a forward-looking company (see video below).

In the email exchange with Venter, I sought elaboration on his remarks at the conference Wednesday. I'm pasting in his responses in full. Venter:

To clarify my views, the alliance with Exxon is ongoing and is still exploring a variety of options for the best means to handle algae for biofuel development. What I said yesterday, what I have been saying and what I believe is natural strains of algae will not get us to where we need to be in terms of scale of production for a viable alternative fuel and that is being proven. Genetic engineering/manipulation of native strains is currently the best/fastest/most cost effective way to deal with algae to get them to produce lipids, and SGI and Exxon continue to work on this.

I personally believe that ultimately we will need to explore a fully synthetically constructed algae cell (and SGI is pursuing this with internal funding) to get us to the necessary levels of production of algae but that is not a part of the Exxon Mobil/SGI alliance currently. I did say and I do hope that it might be something that SGI and Exxon work on together.

SL: My notes are that you said that the phase of the work exploring the feasibility of using natural strains of algae toward your goals has run its course, which is why you are seeking now to explore the fully synthesized approach. Are you saying that this is inaccurate -- that as part of the alliance you continue to work through the former approach using natural strains? If not, what remains of the alliance's work?

I think your notes are accurate but leave out a key part. It has been clear to me that unmodified native strains could not get us where we need to go. The SGI-Exxon collaboration is focusing on seeing if via metabolic engineering and gene changes we can greatly increase hydrocarbon production to needed levels starting with these natural strains that we have been studying. I believe that a fully synthetic cell approach will be the best way to get to a truly disruptive change that we discussed yesterday.

SL: How do you characterize the discussions with Exxon toward moving to the next stage that you seek -- the fully synthetic approach? Beginning of talks? Is Exxon receptive?

I assume that our skill set in this area has been one of the attractions for Exxon to work with us. Our success at building the first synthetic cell is only from last year and had not been achieved when we formed the agreement between SGI and Exxon. So I would say it is an ongoing dialog.