Title: Industrial Oil Seed Opportunities Linnaeus Plant Sciences Inc.
1Industrial Oil Seed Opportunities Linnaeus
Plant Sciences Inc.
- Jack Grushcow
- www.linnaeus.net
2Current Key Factors
- Cost and availability of Petroleum
- Environment
- Entrenchment
- Bio-tech Advances
- Patents
- Regulatory
- Canadian Infrastructure
3We need to look forward
to new industrial chemistry
4Overview
- About Castor Oil
- Core Technology
- Lubricant markets and economics
- Marketing Strategy
- Regulatory Strategy
5Castor Oil
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7Industrial Applications of Castor Oil
- Over 1,000 patented industrial applications
- Industrial chemistry established since 1900s
- Long recognized for outstanding properties
- including oxidative stability and lubricity
- US Strategic stockpile up to 70s
- Only commercial source of HFA
8Ricinoleic Acid
OH
Ricinoleic acid a reactive fatty acid capable of
numerous oleochemical conversions
9Problems with Castor
- Contains Ricin potent bio-terror weapon
- Main producers are India, China and Brazil
- India and others seek down stream capability
- Supply limited and variable
- Significant price fluctuations
- Largest user seeks alternative source
10Linnaeus Plant Sciences Hydroxy Fatty Acid (HFA)
Technology
Expression in Conventional Oilseeds
Hydroxylase Gene
Expression in Model
Ricinus communis (Castor)
Arabidopsis thaliana
11Advantages of (GM) Approach
GM Approach
Conventional Approach
- Goals
- High oleic
- Low saturates
- Low poly-unsaturates
- Limited profiles
- Goals
- Agronomics
- Infrastructure
- Limited regions
- Goals
- Higher functionality
- High oleic
- Low polyunsaturates
- Multiple crops
12Four novel hydroxy fatty acids
13Comparison of Fatty Acid Profiles
The HFA clearly replaces oxidatively unstable
polyunsaturates
Expressed in Brassica napus (hydroxy fatty acids
include ricinoleic and densipolic acid)
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15Industrial Applications For Linnaeus HFA
Technology
Discussed in current presentation
16Linnaeus HFA Oil As a Lubricant - Target Markets
and Drivers
- Engine oils
- Fuel economy, low phosphorus (ILSAC GF-4)
sulfur, reduced emissions, long drain - Hydraulic oils
- Improved lubricity and environmentally sensitive
applications - Two stroke oils
- Aquatic toxicity, reduced emissions smoke
- Chain bar lubricants
- Environmentally sensitive applications
17Total Fina ElfEnvironmentally Friendly Products
- Total Fina Elf products overlap application areas
for the HFA technology - The Linnaeus oil is likely to offer specific
benefits over current basestocks used by Total
Fina Elf e.g. better lubricity from HFA, lower
cost vs. synthetic esters
18Why Combine Conventional Specialty Oils?- Best
of Both Worlds
RBOT Rotary Bomb Oxidation Test (ASTM
D2272) Based on blended oil data (10-60 HFA
content)
Source Vegetable Oils Structure and
Performance, S. Lawate, et al, 1997, Tribology
Data Handbook, CRC Press, Ed. Rich Booser
19Linnaeus Oil Can Substitute Synthetic Esters-
Comparison
Based on blended oil data To obtain ISO 46
viscosity grade
20Linnaeus HFA Oil As a Lubricant- Benefits
- Will enable satisfaction of market drivers
(previous slide) - Better lubricity, lower emissions, improved fuel
economy, lower ecotoxicity, - Lower cost vs. synthetic esters
- Oils with varying viscosity can be made by
altering HFA content - currently this is a big shortcoming for vegetable
oils - beneficial for formulation Blue Angel hydraulic
fluids (can allow elimination of viscosity
modifier)
Based on blended oil data
21Motor Oil Opportunity
22What is the potential U.S. motor oil
market?Replacing 10 of 1.1 billion gallons
110 million gallons _at_ 50 gallons/acre would
require 2.2 million acres!
23Value Proposition
- Canola oil .40 CDN per pound
- Motor oil 1.25 USD per pound based on 2.50
quart - Add pour point and anti-oxidant package
- What about emission credits?
24Toxic Waste Metals from Used Engine OilTCLP
Analysis EPA 7470A and 6010B Methods
Sample oil derived from 2000 Ford Ranger Truck _at_
3,300 miles (5,310 km) August 10, 2001. The oils
remain nontoxic after normal engine use and can
be disposed of or recycled safely. 1ND None
detected (Aspen Analytical Lab)
25USPS Ford Explorer Observations
- Significant reductions in CO,CO2, HC and NOx
- 1.3 Improvement in fuel economy
- Approximately 300lb reduction in total tail pipe
emissions per vehicle per year. - It doesn't work without HFA
26USPS Ford Explorer Emissions EPA AnalysisDr.
Duane Johnson Supt., Northwest Ag Research
CenterDirector Institute for Bio-Based Products
MSU
1
Gas Reduction NMHC 25 CO 48 CO2
1 HC 32 NOx 80
Emissions data from paired oil evaluations show
significant decreases in all tailpipe emissions.
1 Probability 0.05 0.01 0.001
0.0001
27Fuel consumption with Titan GT 1 acc. to EG3 Test
Data of test candidate
28Why the Lowered Emissions?
- Petroleum oil molecules range from 20-40 carbons
in length and remain somewhat volatile when in
contact with hot engine parts. In fact, thirty
percent of HC and twenty percent of CO exhausted
from an engine are from the motor oils. Vegetable
motor oils are 55 to 65 carbons long and are
virtually nonvolatile (no VOCs). - Without oil as a contributor of VOCs, engines can
combust fuel at lower operating temperatures.
This increases engine oxygen uptake providing a
cleaner burn and engines run leaner (less fuel).
29One Example US Navy
- Total Oil Spilled (U.S. Navy statistics) 181,453
gallons 1,402 spills reported - Monthly use 600,000 gallons
- Replace 10 or 720,000 gallons/yr
- Requires 14,000 acres
- Generate 7MMUS annually
30Additional Lubricant Markets
- Hydraulic oils 210
- Metalworking Lubricants 68
- Diesel additive 66
- Two-stroke oils 19
- Chain bar lubricants 3
- 2001 US Market in Million gallons
- National Petroleum Refiners Association
- Canadian market estimates based on 2005 mandate
31Production Strategy
- Develop transgenic lines - several labs
- Use Bunge/Canamera HEAR Model
- Bulk up seed
- Contract grow/IP protect
- Contract custom crush
- Cargill, DOW and others follow similar model
- Provinces interested in supporting IP
32Marketing Strategy
- Use Kyoto/Monitization issues
- Leverage Government policy Some Provinces have
ongoing initiatives. Feds evolving - Target Military as well as fleets
- Possible partnership with TOTAL or others
- Control sales to maximize value capture
33Marketing Strategy continued
- Bio-lubes have historically suffered from poor
oxidative stability, high pour points. - Bio-technology is the solution this is NEW
- We are NOT traditional providers of veg. oil
- Marketing/positioning requires environmental and
life cycle consideration this is how margin
will be created. - Get high on the chain - OEM or better
34Regulatory StrategyCurrent CFIA Environment
- Regulations/Guidelines in major transition
- Introduction of Mol. Farming 12-18 months
- New guidelines promise to be challenging
- Opportunity exists to influence direction NOW
35Regulatory Strategy continued
- Highlight environmental benefits
- Participate in all policy forums
- Ensure that we go in under PNT guidelines
- Use HEAR as model
- Stress edible aspect (GRAS) of HFAs
- Go for food and feed status
36Forecast
- According to The Chemical Market Reporter
- Annual growth rate for bio-based lubricants is
projected at 7-10 compared to 2 for overall
lubricants
37Future of Oil Seeds
- Next canola requires biotechnology
- Canadians are world class producers
- Infrastructure is in place for big products
- Huge win - solve the expression problem
- One possible platform technology
- Look to Castors mechanism for bioreactors
38Genomics/Proteomics of CastorHow does Castor do
it?
- Long standing collaboration Prof. A. Slabas
- World leader in lipid metabolism
- 2.5MM committed over next 3 years
- List of known enzymes targeted
- Photoaffinity etc. for new discoveries
- Leverage 5 years of experience with Castor
- Support of TOTAL
39Summary
- There have been dramatic improvements in biotech
methods and tools - Systems exist to efficiently clone genes of
interest - Patents allow control of novel materials
- Regulatory approvals increasing
- It is possible to own a feed stock
- Plants hold the answer to CO2 issues