PUTTING BUGS TO WORK in an oil refinery is not a story-line dreamt up by an excitable Hollywood executive. It’s a very serious idea being developed by a small Texas technology company with big designs on the world oil industry. Energy BioSystems (EBS) of Houston is using genetic engineering to develop a radical new way of extracting sulphur from crude oil and petroleum products. Now armed with the evidence from pilot units, EBS executives are signing up partners and touting the technology that could one day earn a fortune for their small start-up company.

At the heart of the process, known as biocatalytic desulphurisation (BDS), are natural micro-organisms that literally consume sulphur. Long known in nature, it took scientists until the 1980s to isolate the micro-organism that has this extraordinary appetite. Once isolated it can be put to practical use. Biotechnology has already been applied successfully to develop organisms that can be used to help clean up after oil spills. BDS does the same to the sulphur in oil without devouring the carbons too.

The challenge taken up by EBS is to use genetic engineering to develop the biocatalyst at work in BDS so that it is commercially viable. BDS operates at ambient temperatures and is being touted as a ‘kinder, gentler’ alternative to the conventional hydrodesulphurisation method. If its performance can be boosted it will be a cheaper, more benign alternative to the high temperature, high pressure hydro units that are used to extract sulphur from oil today. ‘It will offer a 50 per cent capital saving and the aim is to be 10 to 20 per cent lower on operating costs,’ says EBS chief executive John Webb confidently.

Webb’s hopes of success are based on some obvious opportunities. Environmental regulations are forcing refiners to reduce sulphur content sharply. For example, the target figures for sulphur content in diesel fuel in Europe call for its reduction to about a sixth of current levels. While tighter regulations start to bite over the next 15 years, the sulphur content of the oil available to refiners is going to be rising. At both ends of the process, the pressure on the refiners is increasing. Based on industry projections, EBS foresees an additional need for 10-15 million barrels a day of desulphurisation capacity. Some industry estimates of likely spending on desulphurisation equipment over the next 10 years run as high as $25,000 million.

To capture a slice of this market, EBS needs to boost the efficiency of the enzymes produced by the bacteria in its system and establish its commercial viability with potential customers. It has signed a series of alliances to further develop the process and get it ready for commercial use.

EBS gas engaged some powerful partners with deep pockets. Petrolite has set up a $1.5 million pilot plant at its headquarters in St Louis capable of processing five barrels a dy. Petrolite has also invested $5.4 million in research and development and will share in any profits that are generated. MW Kellogg built the plant and will be the exclusive supplier of the basic engineering. Total of France is providing diesel for the pilot scheme and will set up its own pilot unit in France. If this succeeds Total plans to build a commercial BDS unit. Other alliances have been struck with Koch Refining and the exploration and production technology division of Texaco.

EBS hopes the pilot plant will validate the BDS process and the design of the unit. Webb and his colleagues are in no doubt that the targets will be achieved and that the process can be developed for gasoline and crude oil desulphurisation. And that is only the start of things to come. Biorefining has possible applications in reducing nitrogen levels, metal removal and viscosity reduction. In 1994 the company raised $24 million in a private placement, ending the year with about $30 million to fund further research and promote itself to potential customers. If Total goes ahead with construction of a commercial BDS unit in 1996, as planned, it will be money well spent.