SOUTH SAN FRANCISCO—The ice cream and caramels are delicious, but it's the brioche that really convinces you eating algae could be a winning idea. The oily, yellow, flour-like residue of wrung out algae—dubbed "algalin" by its marketers—can easily replace the butter and eggs in prototypical French pastry bread.

Even on its own, the algalin isn't bad. It tastes like pancake mix, minus the salt and baking soda but with the addition of olive oil. It definitely doesn’t taste like licking a bright green pond. "We were looking for biodiesel but found a product that's good for delivering fat," says Ken Plasse, vice president for business development at the algae company Solazyme. The brioche retains the oily, satisfying texture of baked goods but without the trans fats consumers have been taught to fear. The self-professed former consumer products guy adds: "I've never seen anything like it."

A tour of Solazyme takes me to the company’s headquarters, which occupies two nondescript buildings in this business-park city outskirts where companies move for the cheap rents and peace and quiet. The industry industrializing in South San Francisco is often the nascent synthetic biology business. A building that bears the logo of microbial fuel-makers LS9 is just up the road from the company that grows algae in the dark, Solazyme. To survive while Solazyme struggles with its original plan to develop fuels, the company uses its algae as a "conversion technology." In the words of co-founder, company technologist and president Harrison Dillon, the conversion technology of algae is a means of turning sugar into more lucrative molecules—and maybe saving the world in the process.

Plasse says, and my taste buds confirm, that algalin has "magical properties,” which allow it to replace butter and eggs in bread, craft healthy chocolate milk that tastes just a little bit salty or keep gluten-free breads from tasting dried out. An undisclosed set of companies have been testing the product since January, and Solazyme spokeswoman Genet Garamendi assures me sales of "whole algal flour" are expected soon. Making oil and algal flour for food represents a big change of direction for a company that originally intended to make biofuels from algae. "I'm not sure I knew what brioche was until I went down to that kitchen and tasted it," notes Jonathan Wolfson, co-founder and current company CEO.

Fuel cell

In 2003, college buddies Wolfson and Dillon started the company called Solazyme in a bid to turn algae into a source of fuel—for the hydrogen economy. That plan didn’t last long. "Hydrogen was not as feasible as we thought it was," Dillon notes, nor did open ponds prove a viable strategy for growing the algae, as they initially reckoned. "Oil is a much better thing to make."

Fuel was the reason they got into the business—it’s their plan to save the world. "Fuels are still a critical component in our future and the reason we get up in the morning," Wolfson says. "We're at the beginning with advanced biofuels. A lot of things people have tried won't work but that doesn't mean this isn't an area that will make progress." The company still has its test fleet of Volkswagens running on algal biodiesel, which employees drive on a rotating weekly basis.

But Solazyme had to diversify far beyond fuel, and today the company makes unexpected products ranging from anti-aging algal acids for its own cosmetic line to fiber for digestive health. "We're a fermentation company," Dillon explains.

The algae carrying out that fermentation come from the genus Prototheca and Chlorella, though the company refuses to identify which specific strains produce what. The oil production itself is relatively simple, taking advantage of the fact that, to deal with stress, algae produces oil in much the same way as humans produce fat. Grow the algae in the dark and feed them sugar and they swell up, making a milky tan broth full of cells that are more than 80 percent full of triglyceride oils, which can be used in everything from food to clothing.

Imagine grapes bursting with juice, only microscopic—that’s what the oil-swollen algal cells are like. Solazyme gets the oil just like a vintner would extract juice from grapes: by crushing the cells. The genetics of these microscopic oily grapes can be tweaked as well. Engineers can insert a yeast gene that enables algae to fatten up on sugarcane juice, or they can place the genetic pathways for eating cellulose. (The trick, according to chemical engineer Peter Licari, Solazyme's chief technology officer, is not to make too many changes to the genetics, because that can begin to adversely affect the oil production.) It helps that algae evolves quickly; the cells can divide every few hours, allowing the scientists to quickly isolate the best batches. Row after row of those batches await testing in Solazyme's labs, silently agitating in glass beakers. They’re protected from the light by Velcro-secured black sheaths that look and sound like the armbands familiar from blood pressure tests.

The oil itself does not qualify as genetically modified, even though Solazyme blasts DNA into the algae's genome to make it produce excess oil and the company’s oils don’t necessarily have natural analogs. ”We can generate oils that the world has never seen before," Licari says. The inserted genes come from many different plants and organisms, from obscure oily weeds to palm trees.

"There is nothing GMO about the actual product," Dillon argues, comparing the oil to French cheeses made with genetically-optimized enzymes that are also not considered genetically modified. Such algal oils or cheeses are exempt from GMO status because none of the modified genetics or proteins end up in the final product. Solazyme's algalin has already received the assent of the U.S. Food and Drug Administration and European food regulators.

More than food

Sugar will be Solazyme's weakest link; the price of sugar hit record highs in 2011 and, outside of Brazil and a few other areas, the ability to grow sugar takes too much scarce water. Expensive sugar limits Solazyme's ability to grow algae in the dark, and the impact of growing sugar make Solazyme's algal oil products less than environmentally benign. Eventually someone will have to figure out this photosynthesis trick or unlock the sugar molecules embedded in the non-edible parts of plants, like cellulose. "The algae are lined up and they're hungry," as Garamendi says.

That's especially true if Solazyme eventually wants to make fuel. The company has already provided fuel to the U.S. Navy, and many of the airplanes and ships certified on the algal fuel were part of the Great Green Fleet of 2012. "If you have kids, grandkids or even care about the future, we will run out of fossil fuels," Wolfson avers. "Even before that we will destroy our climate."

As Wolfson notes, electric vehicles, hybrids and other solutions may work well for passenger vehicles, but these options can’t yet replace diesel in trucks, bunker fuel in shipping or kerosene in airplanes. For that, a liquid biofuel may prove the only alternative—and the company has a plaque in the home office, a photo of a test flight from 2011 and a deal with United Airlines to prove it. Still, given the volume of fuel required, competing with oil is nearly impossible in the absence of specific legal policies such as biofuel mandates or a carbon tax.

So instead Solazyme has focused on displacing oil in more lucrative applications. For example, Solazyme has a partnership to develop algal oil for processing into chemicals with both Mitsui and Akzo Nobel. "I didn't think we'd be in cosmetics," Dillon adds.

When initially growing some of the algae, Solazyme researchers noted the tiny cells were trying to protect themselves against the agitated water and other assaults occurring in the dark. Isolating the molecular compound the cells used for that protection revealed a fatty acid that compared favorably to other such acids used for anti-aging cosmetics. To take advantage of the discovery, a new brand was launched—Algenist, which now has 20 different anti-aging salves and creams.

Perhaps one day the algal cells could also be turned into a drug. After all, an algal cell is a 10-micron sphere of custom-designed oil that the human body is primed to digest, and Licari's background includes working on oncology drugs and vaccines. "Algae for us is a catalyst to convert one commodity into a world-changing set of materials," Dillon argues.

To do that, Solazyme has partnered with agribusiness giant Bunge to build an algae production facility next to a sugarcane processing factory in Orindiuva, a city in the Sao Paolo state of Brazil. The cheap sugar from the cane will help feed algae that is grown in the dark and tricked into producing oils for soaps or other cosmetics. Solazyme is not the only would-be biofuel company that has seen the specialty oil light: synthetic yeast maker Amyris now focuses on cosmetics and chemicals at its Brazilian plant, also built to take advantage of cheap sugar.

Cheap sugar can also displace another agricultural blight: palm oil. Cooking oil, cookies and other fatty foods often contain palm oil, which is also found in everything from soaps to biodiesel. Producing that palm oil has led to the rapid deforestation of Indonesia, other parts of Asia, Africa as well as Central and South America. "We are laying waste to Indonesia, burning the forests so we can put palm in place," Vaclav Smil, an emeritus environmental scientist from the University of Manitoba, explained to an audience at the Breakthrough Institute dialogue in late June. "Why? Because you want to eat cookies." He added: "You don't have to eat so many cookies."

Solazyme's algae can be geared to produce the exact same molecules found in palm oil, only lower in unhealthy saturated fats and higher in protein. The oil also can be produced anywhere there is cheap sugar and a fermentation tank—and the oil is not subject to the whims of agricultural production, like how differing levels of rain on a palm plantation can create slightly different oil harvests. "If you want to make palm oil in the middle of Iowa in January because maybe something happens with planting season in another region, you can do that now," Garamendi notes.

Solazyme already has an agreement to produce similar oils for consumer goods giant Unilever, one of the world's largest users of palm oil and a company that once oversaw vast oil palm plantations from the Congo to Indonesia. Solazyme's algal fermentation facility in Peoria, Ill. can produce nearly 2,000 metric tons of oil per year and change the type of oil produced on a weekly basis. Another facility in Clinton, Iowa can make some 20,000 metric tons of oil per year. The new plant in Brazil will be even larger at 100,000 metric tons per year to start and should be in production by the end of this year. If Solazyme can continue to scale up its production, one day the company may even come full circle and become a full-fledged fuel-maker again.

Dillon calls Solazyme's core product a "renewable, designer oil." In the company kitchen at the end of the tour, I feel faintly covered in it. But even after 10 years, Dillon still followed me down to see if there were any fresh-baked algal oil cookies. This is the man who already had his birthday cake made with the oil back in 2008. Solazyme's algal oil may not quite yet be replacing fossil petroleum in our trucks and airplanes as hoped for, but it might just save some rainforest from palm oil.