ARC Centre of Excellence in Synthetic Biology


Synthetic Biology

16, Jan 2023

The future of oil and gas could depend on microbes

Opinion piece by Thom Dixon 

One of the most important moves a fossil fuel company has made in decades has escaped notice.

Late last year Woodside Energy, Australia’s biggest independent oil and gas company, made a significant announcement that went largely unnoticed in climate concerned circles.  It was the signing of a strategic collaboration agreement with US company LanzaTech, a synthetic biology company specialising in carbon waste reuse for fuels, chemicals. More recently, Woodside has announced a partnership with Qantas on biofuels, showing the promise and potential of this technology.

These agreements represent a pathway to carbon neutrality for oil and gas companies.  But we don’t talk about it in Australia. The country’s adversarial politics has placed oil and gas on one side of the ledger and carbon neutrality on the other.  Australia has blinded itself, and we are at risk of missing the fact that the tools for building a third way to a carbon negative economy already exist.

Synthetic biology involves the management of microbes to transform waste into useful products. It offers a commercially viable and scalable technology for capturing emissions and transforming them into high-value products that can be sold on.

Lost profit line

From a shareholder’s perspective, the only question should be why the oil and gas sector hasn’t done this sooner? All that carbon being released into the atmosphere could have been used to generate industrial plastics and fuels – all via the power of engineered bacteria. It’s a lost profit line that is being released into the atmosphere and causing long-term negative environmental, health and economic impacts.

The US sees this. It has announced a National Biotechnology and Biomanufacturing Initiative to support what global consulting firm McKinsey forecasts to be $2-$4 trillion dollars in economic impact globally over the next two decades. This was further supported with President Biden’s recent Executive Order on the Bioeconomy. The US bioeconomy is already valued at US$950 billion. Boston Consulting Group says 40 percent of gross domestic product could be displaced by synthetic biology.

Carbon waste-stream management strategies should become standard across the corporate sector — especially for industries where a product’s carbon footprint is front-end loaded at the point of extraction, refinement and manufacture. For example, aluminium refining or liquified natural gas production are two areas with large but easily capturable carbon waste streams.

Circular economy crucial

Assoc/Professor Esteban Marcellin is doing just this at the ARC Centre of Excellence in Synthetic Biology. Esteban uses gas fermentation – capturing and re-using atmospheric carbon to synthesise high value chemicals and fuels. Creating a circular economy for chemical fuels is essential to developing a carbon neutral economy. Changing the oil and gas industry’s chief carbon source to atmospheric gasses should be the number one priority for the sector.

It will not be possible to build a profitable enterprise in the next decade without thinking about biology.

Traditional industries will be beaten on input costs, supply chain resilience and environmental sustainability – the golden trifecta for a future riddled with escalating geopolitical and environmental risk. Synthetic biology isn’t just going to disrupt industry. It’s going to fundamentally restructure economic relations.  The production pathway of extraction, manufacture, single use and long-lived waste once made sense.  But an economy based on non-renewable resources cannot infinitely grow.  Next-generation biotechnology will literally grow renewable advanced manufacturing.

Taking pole position

Australia should lead the world in adopting next-gen biotech. The country’s comparative advantages are immense, and Australia is uniquely placed to become the carbon neutral chemical and fuel manufacturing hub of the Indo-Pacific. This is the new vertical for the oil and gas sector, and any companies that miss this transition will cease to exist. Australia has all the resources, skilled labour and proximity to the Asian market to become a powerhouse in synthetic biology.

The partnership between LanzaTech, Qantas and Woodside exemplifies how Australia needs to work with our existing oil and gas Industry to build the infrastructure, technology and skills to transition into a sustainable energy bioeconomy. The opportunity exists now, but if we miss it, it will not come back.


Thom Dixon is a PhD candidate in the Macquarie University node