Industrial Oil Seed Opportunities
Linnaeus Plant Sciences Inc.
Jack Grushcow
www.linnaeus.net
LINNAEUS
Plant Sciences
Current Key Factors
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Cost and availability of Petroleum
Environment
Entrenchment
Bio-tech Advances
Patents
Regulatory
Canadian Infrastructure
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Plant Sciences
We need to look forward…
to new industrial chemistry
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Plant Sciences
Overview
• About Castor Oil
• Core Technology
• Lubricant markets and economics
• Marketing Strategy
• Regulatory Strategy
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Plant Sciences
Castor Oil
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Plant Sciences
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Plant Sciences
Industrial Applications of Castor Oil
• Over 1,000 patented industrial applications
• Industrial chemistry established since 1900’s
• Long recognized for outstanding properties
including oxidative stability and lubricity
• US Strategic stockpile up to ’70’s
• Only commercial source of HFA
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Plant Sciences
Ricinoleic Acid
Ricinoleic acid: a reactive fatty acid
capable of numerous oleochemical
conversions
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Plant Sciences
Problems 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
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Plant Sciences
Linnaeus Plant Sciences
Hydroxy Fatty Acid (HFA) Technology
Hydroxylase
Gene
Expression in
Model
Expression in
Conventional
Oilseeds
Ricinus communis
(Castor)
Arabidopsis thaliana
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Plant Sciences
Advantages of (GM) Approach
Conventional Approach
Conventional Oils
Industrial
Oils
Canola, Soybean,
Corn
Lesquerella
(Castor) Vernonia
Goals
•High oleic
•Low saturates
•Low polyunsaturates
•Limited profiles
Goals
•Agronomics
•Infrastructure
•Limited regions
GM Approach
Combine
Conventional and
Industrial Oils
High oleic oils,
Castor
Goals
•Higher functionality
•High oleic
•Low
polyunsaturates
•Multiple crops
LINNAEUS
Plant Sciences
Four novel hydroxy fatty acids
0
2.5
5
7.5
10
12.5
15
17.5
min
Ricinoleic acid (12OH-18:1 9)
Densipolic acid (12OH-18:2 9, 15)
Lesquerolic acid (14OH-20:1 11)
Auricolic acid (14OH-20:2 11, 17)
LINNAEUS
Plant Sciences
Comparison of Fatty Acid Profiles
The HFA clearly replaces oxidatively unstable
polyunsaturates
Hyroxy
Fatty
Acid
(HFA)
Fatty
Acid
Name
Hydroxy Ricinoleic
Fatty Acid & Others
Linnaeus Canola Castor
Oil*
Oil
Oil
% Fatty Acid
15.6
0.0
89.2
C16:1
Palmitoleic
0.3
C18:1
Oleic
59.1
60.9
3.5
C18:2
Linoleic
11.3
21.0
4.2
C18:3
Linolenic
3.4
8.8
C20:1
Gadoleic
1.0
C22:1
Erucic
0.7
C12:0
Lauric
0.0
C16:0
Palmitic
5.1
4.1
C18:0
Stearic
1.7
1.0
1.8
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*Expressed in Brassica napus (hydroxy fatty acids include ricinoleic and densipolic acid) Plant Sciences
Soy Lines with HFA
50.0
'16:0
Percentage
40.0
'18:0
30.0
'18:1
20.0
'18:2
'18:3
10.0
ricinoleic
0.0
1
2
3
4
5
6
7
Line Number
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Plant Sciences
Industrial Applications For
Linnaeus HFA Technology
HFA
Vegetable Oils
Base Oil
Feedstock
Reactive
Component
Lubricants*
Fuels
Paints, Coatings
and Inks
Functional Fluids*
Oleochemicals
Polymers and
Foams
Process Oils
* Discussed in current presentation
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Plant Sciences
Linnaeus 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
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Plant Sciences
Total Fina Elf
Environmentally 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
Application
Base Oil
Motor Oil
4 Stroke Engine Oil
Hydraulic Fluid
2 Stroke Oil
Fuel
Chain Bar Oil
Feedstock
Biodiesel
Reactive Diluent
TotalFinaElf EF
Products 
Comments
HTX766
HTX822
Hydrelf Bio 46, Total
Biohydran (SE,
TMP), Fina
Biohydran RS
Total Neptuna 2
Aquazole
Total ChainBio
Synthetic ester based oil
Synthetic ester based oil
Colza
Rapeseed methyl ester
Polymer Raw Material Rislan B
Synthetic ester based oils,
Vegetable oil based
Synthetic oil based
Emulsified diesel fuel
Natural biodegradable
Reaction of hydroxy group
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Plant Sciences
Why Combine Conventional & Specialty
Oils?
- Best of Both Worlds
Castor Oil*
•RBOT** Oxidation = 29 mins
•Pour Point ~ -33C
•Viscosity @ 40C = 255 cSt
•Timken OK Load = 30 kg
•4-Ball: Scar = 0.6, Coeff. Friction = 0.04
•High reactivity
Linnaeus Oil***
•RBOT Oxidation = 18-25 mins
•Pour Point ~ -15C to -21C
•Range of viscosities ~50-120 cSt
•Timken OK Load =20-30 kg
•4-Ball: Scar ~ 0.6, Coeff. Friction ~ 0.06
•Moderate reactivity
High Oleic Canola Oil*
•RBOT Oxidation = 15 mins
•Pour Point ~ -15C
•Viscosity @ 40C ~ 37 cSt
•Timken OK Load = 20 kg
•4-Ball: Scar = 0.7, Coeff. Friction = 0.08
•Very low reactivity
**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
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Plant Sciences
Linnaeus Oil Can Substitute Synthetic Esters
- Comparison
Property
Test Method
Kinematic Viscosity ASTM D2270
@ 40 ºC
@ 100 ºC
VI
Pour Point (ºC)
ASTM D97
Flash Point (ºC)
ASTM D92
Toxicity
Cost ($/lb)
Need for Viscosity
Modifier*
* Based on blended oil data
** To obtain ISO 46 viscosity grade
TMP
Trioleate
High Oleic
Canola Oil
10% HFA
Linnaeus
Oil*
50 cSt
10 cSt
201
-33
>300
Possible
neurotoxicity
~ $1-$1.30
37 cSt
8 cSt
212
-15
>300
50 cSt
10 cSt
180
-18
>300
None
~$0.65
None
~ $0.75
No
Yes
No
LINNAEUS
Plant Sciences
Linnaeus 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
ISO Grade
ISO 46
ISO 68
ISO 100
ISO 220
Required % Hydroxy
Content
~10%
~20%
~60%
90%
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Plant Sciences
Motor Oil Opportunity
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Plant Sciences
What is the potential U.S. motor oil market?
Replacing 10% of 1.1 billion gallons
Automotive
Other
Bio potential
110 million gallons @ 50 gallons/acre
would require 2.2 million acres!
Value 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?
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Plant Sciences
Toxic Waste Metals from Used Engine Oil
TCLP Analysis: EPA 7470A and 6010B Methods
Element
Reporting Limit (ppm)
Canola M.O.
Mercury
0.0002
ND1
Arsenic
0.40
ND
Barium
0.40
ND
Cadmium
0.04
ND
Chromium
0.20
ND
Lead
0.20
ND
Selenium
0.80
ND
Silver
0.10
ND
Sample oil derived from 2000 Ford Ranger Truck @ 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.
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1ND
= None detected (Aspen Analytical Lab)
Plant Sciences
USPS 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
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Plant Sciences
USPS Ford Explorer Emissions EPA Analysis
Dr. Duane Johnson Supt., Northwest Ag Research Center
Director Institute for Bio-Based Products MSU
****
8
7
6
***1
5W30
*
Canola
M.O.
5
PPM 4
**
3
2
****
1
0
NonMethane
HC
CO
CO2 / 10 HC X100 NOx X10
% 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
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Plant Sciences
Fuel consumption with Titan GT 1 acc. to EG3 Test
Data of test candidate
PORSCHE
Model
911 Carrera Coupé
Speed
280 km/h
Fuel
Gasoline
Cubic capacity
3,387 Liter
Power
221 kW (300 PS)
Max. revs
6800 1/min
In comparison with SAE 15W-40:
Fuel/Diesel-Consumption
-6,4 %
Emissions NOx
-24 %
MERCEDES-BENZ
E 220 CDI
198 km/h
Diesel
2,151 Liter
92 kW (125 PS)
4200 1/min
-3,2 %
-16 %.
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Plant Sciences
Why 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).
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Plant Sciences
One 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
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Plant Sciences
Additional Lubricant Markets
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Hydraulic oils
Metalworking Lubricants
*Diesel additive
Two-stroke oils
Chain bar lubricants
210
68
66
19
3
2001 US Market in Million gallons
National Petroleum Refiners Association
*Canadian market estimates based on 2005 mandate
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Plant Sciences
Production 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
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Plant Sciences
Marketing Strategy
• Use Kyoto/Monitization issues
• Leverage Government policy: Some
Provinces have ongoing initiatives. Fed’s
evolving
• Target Military as well as fleets
• Possible partnership with TOTAL or others
• Control sales to maximize value capture
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Plant Sciences
Marketing 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
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Plant Sciences
Regulatory Strategy
Current 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
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Plant Sciences
Regulatory Strategy continued…
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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 HFA’s
**Go for food and feed status
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Plant Sciences
Forecast
According to The Chemical Market Reporter:
“Annual growth rate for bio-based lubricants is
projected at 7-10% compared to 2% for
overall lubricants”
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Plant Sciences
Future 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 Castor’s mechanism for bioreactors…
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Plant Sciences
Genomics/Proteomics of Castor
How does Castor do it?
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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
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Plant Sciences
Summary
• 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
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Plant Sciences