Exxon scientists once doubted algae biofuels, but this oil giant still heavily promotes them.

Company scientists do not agree with the way the project is presented to investors

A person dressed in a lab coat and wearing gloves is sampling from a long trough of green liquid.

In 2021, researchers collected algae samples at the Viridos laboratory in San Diego. Exxon funded the company to modify algae genes, attempting to extract enough oil to make the algae biofuel project technically feasible.

Documents reviewed by The Wall Street Journal show that in February 2020, Exxon scientists conveyed a discouraging message to senior strategic planning executives: the company’s high-profile algae biofuel project was far from achieving the publicly claimed goals.

The documents indicate that this was one of the reports scientists made multiple times to Exxon’s top management at the beginning of 2020: even the most promising algae strains struggled to produce large amounts of oil outside laboratory conditions.

Sources familiar with the matter revealed that a week later, Exxon announced to investors that algae could soon become a source of biofuel with higher yields than crops like sugarcane and oil palm. This statement shocked scientists, who did not agree with how the data was being presented to investors.

The Wall Street Journal reviewed internal presentation slides created by Exxon scientists in early 2020 and verified other related documents. Some previously unpublished files show that senior management was aware that this $500 million algae R&D project was not meeting targets outside the lab but continued to promote its potential value to investors.

The documents also show that days before investor presentations, members of Exxon’s investor relations team frequently communicated with core researchers to discuss the low outdoor yields of algae and how to pitch the project to investors.

An Exxon spokesperson said, “Our algae research stems from a pursuit of innovation, which has been at the core of ExxonMobil’s success for over a century. Breakthroughs in commercialization could have disruptive impacts. Are we passionate about this? Of course. But we also believe in transparency.”

“Our statements reflected the scientific understanding at the time. Once it became clear that this technology could not be scaled commercially, we terminated the project. Any contrary claims are lies.”

In 2021, scientists at Viridos observed cells under a microscope. The company’s predecessor was a synthetic genome company.

For years, Exxon claimed to shareholders that algae could change the future of energy in the United States. As one of the most abundant organisms on Earth, algae absorb carbon dioxide through photosynthesis and produce oil, which could theoretically be used to make transportation fuels. This environmentally friendlier alternative to fossil fuels was very attractive to Exxon—provided the company could increase algae’s energy density to make it commercially viable.

Exxon launched algae R&D in 2009, about two years after publicly admitting that burning fossil fuels worsened climate change. At that time, as climate concerns became mainstream, the company was eager to improve its public image.

After Darren Woods became CEO in 2017, he continued to promote algae as a potential fuel, helping Exxon play a more significant role in a cleaner energy future.

In 2024, Exxon CEO Darren Woods spoke at the Milken Conference.

“Over the past 135 years, we have continuously evolved and transformed,” Woods told investors in 2018. “From kerosene producers to automotive fuel suppliers, from fueling the Wright brothers’ first airplane to fueling space shuttles… From pumping gasoline to perhaps fueling algae biofuels in the future. Society’s needs are changing, and so are we.”

Over a decade, Exxon spent $150 million on advertising to promote the algae project, making it one of the largest PR campaigns of that period. Starting in the late 2000s, the company ran a series of TV ads touting the potential of algae biofuels, claiming they could power “trucks, buses, ships, cars, and even airplanes” in the future.

One ad from 2017 featured a voiceover stating, “Scientists have recognized its potential to change the energy future. By 2025, ExxonMobil aims to have the technology capable of producing over 10k barrels of algae biofuel per day.”

Exxon collaborated with Synthetic Genomics Inc., founded by human genome sequencing pioneer Craig Venter, later renamed Viridos. Over ten years, the oil giant paid the small company $320 million to genetically modify algae in an attempt to produce enough oil to make the project viable, and invested additional funds to build large outdoor ponds for research.

For years, the algae project remained at the core of Exxon’s clean energy plans. Even as other major oil companies abandoned similar research due to slow progress, Exxon persisted.

By early 2020, Exxon scientists began to worry about the project’s feasibility: the ideal results in the lab were difficult to reproduce in outdoor ponds exposed to natural conditions.

In February 2020, scientists reported to T.J. Woynar, Vice President of Corporate Strategy and Planning, responsible for capital allocation and investment strategies, including reporting to the management committee and preparing investor materials.

The scientists explained to Woynar that the best algae strains produced only about 6% of Exxon’s publicly stated oil yield targets when grown in large outdoor ponds.

In 2021, a lab technician collected algae samples in a photobioreactor at the Viridos lab in San Diego.

Viridos’ large algae cultivation tanks in a greenhouse.

Documents reviewed by The Wall Street Journal show that by 2020, Exxon’s top executives knew that even the best algae strains struggled to produce large amounts of oil outside the lab.

They further concluded that even if geneticists could accelerate oil production efficiency, the project was not economically viable. Scientists estimated that to produce 10k barrels of algae biofuel per day, Exxon would need to build ponds covering 35 square miles—six times the size of downtown Los Angeles—and handle more seawater than the city’s daily freshwater consumption.

Scientists stated that the project would cost at least $9.4 billion, making it unprofitable given the value of the biofuel produced.

Sources said that a week after the scientists’ report, Exxon updated investors on the project outlook, with statements causing concern among scientists.

Meeting notes show that former senior vice president Andrew Swigg told investors that the company was “rapidly scaling outdoor cultivation systems, testing different algae strains, and moving research from the lab to the field,” aiming to have “scaled production of algae biofuel” with a capacity of 10,000 barrels per day by 2025.

A chart in the March 2020 investor presentation showed Exxon “expected” outdoor pond fuel yields to be more than three times the measured data, with the claimed algae oil potential six times the scientists’ estimates.

“We have genetically engineered algae yields that are more than twice those of the next-highest source,” Swigg said.

Internal documents show that in outdoor environments, Exxon researchers reported results to Woynar indicating that yields from sugarcane and oil palm were higher than algae, while corn yields were roughly comparable to algae.

People close to the company said Exxon executives deliberately emphasized the technical feasibility of algae rather than its commercial viability.

A research assistant at Viridos loads quality control samples into a total organic carbon analyzer.

Exxon paid the company $320 million over ten years.

Algae samples.

Viridos’ former CEO Oliver Fezer said that the scientists’ cost estimates, combined with low first-year outdoor test yields, were “a shock to everyone.”

“Some Exxon scientists lost confidence in our R&D capabilities,” he said, adding that this “made people start to wonder how much longer we should continue.”

Fezer said his company later estimated the cost of commercial algae facilities: building 25 square miles of ponds would cost about $5 billion, a figure verified by the National Renewable Energy Laboratory. He believed the project could become profitable after many years. He also said that algae yield data significantly improved in the months and years following Exxon’s investor presentations.

University of California, Berkeley professor Sabihah Murchant, who served on Exxon’s Confidential Technology Advisory Committee evaluating synthetic genome company and Viridos’ algae research, said, “Given the scale of Exxon’s investment, SGI’s research results have not met the expected standards.”

Months after scientists expressed concerns, Exxon continued advertising the algae project. In late 2020, the company ran a colorful ad in The New York Times claiming that the future of energy “may come from the most unexpected places.”

About a year later, then-Exxon Vice President of R&D Vijay Shrupp told The Wall Street Journal that he was aware of outside perceptions that the company was using algae research to greenwash, but he believed the project and its progress were credible.

Exxon has never officially announced abandoning algae R&D. According to bankruptcy filings by Viridos, Exxon terminated its partnership with the company in March 2023. Viridos was dissolved in September. Woynar, Swigg, and Shrupp have all left Exxon.

Since the termination of the partnership with Viridos, climate-related investments have fallen out of favor with investors. At the peak of the sustainable investment boom in the early 21st century, Exxon pledged to invest $30 billion by 2030 in emissions reduction, carbon capture, and other climate tech projects.

After Trump returned to the White House and launched a crackdown on clean energy, Exxon cut this spending target by one-third and shelved plans to build a $7 billion hydrogen plant in Bexar, Texas—its largest single project in its low-carbon pipeline.

“If even ExxonMobil, with all its advantages, can’t find projects that deliver competitive returns, then other companies won’t either, and these businesses will eventually disappear,” Woods said at an energy conference in September.