Business & Economics

EBI: Now more important than ever

David Zilberman

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

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Comments to "EBI: Now more important than ever":
    • e-papierosy

      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.

      [Report abuse]

    • Tony Ceyhan

      EBI: Truth needed more than ever

      Professor Zilberman expresses laudable concern for the environment and hunger, but his note is contradictory, misleading and inaccurate on five fundamental issues: BP’s political influence, the nature of university-industry partnership, the risks of biofuel technologies, EBI’s work on fossil fuels, and greenwashing.

      First, Professor Zilberman states that “the best policy … is to raise the price of fuel by introducing fuel taxes,” but he says nothing about BPs efforts to block such a tax. In fact, according to the California Secretary of State, BP spent $3 million to lobby California voters against CA Proposition 87, which would have taxed oil companies in order to provide public funds for research on alternative energy.

      Because Professor Zilberman is unwilling to challenge BP and others on their opposition to raising revenue for public state-funded research, he presents a false choice for the university – take corporate money and excel, or become mediocre. However, even on this point he is contradictory, saying that we needn’t worry that “BP will control the research agenda” because the EBI “is a small part of a large portfolio” – if that’s so, then perhaps we could have gotten along without the money anyways? Moreover, contrary to Zilberman’s suggestion, university-industry ‘partnerships’ are neither a necessary nor sufficient condition for producing socially important innovations. Indeed, there are plenty of disastrous innovations that have resulted from such partnerships, and many great innovations have arisen at universities without industry support.

      For Zilberman, BP’s lobbying against public funding for research and education isn’t a reason to criticize the EBI because “we are not responsible for our partners.” This is a remarkable statement – such an approach is a slippery slope that would not preclude receiving money, for example, from ruthless dictators or white supremacist groups. Even as he claims that UC is not responsible for its industry sponsors, he insists that we really need them: “Energy companies have the resources, supply chains and knowledge required to commercialize biofuels.” But BP actually has relatively very little experience with biofuels (UCB ought to have partnered with a Brazilian company for that) – Zilberman conflates market participants with a single mega-corporation. Zilberman wants to have it both ways – a cozy relationship, without any actual responsibility.

      Zilberman also groups together a range of organizations that “get into trouble”. The problem with this sort of elision between these organizations is that public funders are nominally accountable to citizens if they do socially undesirable things, private ones are not. In this sense, Zilberman – like so many economists caught up with their fantasy of individuals and free markets – has got his priorities upside down. We actually *are* responsible for our *public* partners as citizens who have a duty to monitor and modify the actions of our public institutions where and when they err – isn’t this the very basis of the social contract upon which democracies are founded?

      Zilberman understates the risks of biofuel technology and market developments that (1) can exacerbate hunger and greenhouse gas emissions by displacing food crops or carbon sequestering vegetation, or (2) can result in great threats if newly engineered microbes that can quickly digest lignin (the substance that gives woody plants structure) were released in forests, or if quickly spreading salt-water algae that secrete oil were to escape into the oceans.

      Oh, and by the way, Zilberman misleadingly claims that “the goal in creating the EBI” was “to generate new and improved fuels,” yet even on its own website, the EBI states that one of its core aims is “to develop highly efficient ways of reaching oil and coal.”

      Professor Zilberman’s account is also a bit naïve in suggesting that BP “came because they expect the university to conduct studies and generate knowledge that will lead to new opportunities.” In reality, it was also about ‘greenwashing.’ Sure BP might find a few things (Novartis/Syngenta didn’t get much) but perhaps more important is that the Berkeley deal was also a grand PR score, helping garner much publicity to bolster BP’s attempt to rebrand itself as a green company. (though the food crisis led many to question the wisdom of biofuels, and the economic crisis has driven down the cost of oil and hence weakened incentives for biofuels). With a few million dollars, BP was able to buy a veneer of green, and attempted to cover up its much greater and more lucrative investments in highly polluting activities such as tar sands and its reckless, greedy practices in deepwater oil extraction.

      Professor Zilberman states that we need to work on biofuels because “there is a limit to what conservation can do” and there are lots of worse sources, such as tar sands (he conveniently doesn’t mention BP’s investments in tar sands, which are far greater than its funding for the EBI). What his statement ignores however is that we are very far from the “limit to what conservation can do.” In fact, the rush to biofuel is often largely based on and exacerbates antipathy towards conservation. The misleading impression with biofuels is that we don’t have to change much except which pump handle to use at the gas station. This is a dangerous impression that drowns out conservation efforts.

      The real choice for the UC is between grabbing a few dollars, publications and news headlines as apologists for destructive, feudal multinational corporations with fake solutions, and restoring public integrity, democracy, and public funding for education and research.

      [Report abuse]

    • Andrew Blachut

      I’m from Australia and a major topic of discussion over here currently is the introduction of a carbon trading scheme. Given it’s such a political football I agree with your comments on the desirability of major polluters in meeting their social and environmental obligations.

      It’s always interesting to question whether university and research funding may sway the type and extent of research that is being done and how the results obtained are later reported. Vigilance is necessary.

      [Report abuse]

    • Ruth Miclat

      Hi David! While the Philippines is very much different from the US relative to researches in our state universities, I must say that we are probably one of the countries in the world who already have a law on biofuels, encouraging its use and therefore more research as lead by the government and thru various incentives to the private sector so they would cooperate and “invest” in a project. Recent developments in our country brought the Department of Agriculture and the Department of Environment and Natural Resources together presumably for a more sustainable food production and development vis-a-vis the threats of global warming, climate change, etc. Moreover, my short stay at UC-Berkeley and listening to your lectures (and to Roland David Holst) brought me a much much wider perspectives relative to “saving the environment” cliche! My best regards!

      [Report abuse]

    • Greg Yuhas

      Thanks for your candor and courage to offer a logical assessment of the situation. Education for it own sake is terribly important, as is art, history and numerous other fields of study. Education also lead to industrialization and many of the ills we face today. The University should feel honored that industry is willing to fund research that could produce so much good. Consumers of fossil fuels should feel obligated to fund, through a fuels tax, research and education that help address our energy needs.

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