I just received the schedule for my plenary talk at the 2009 Bio Pacific Rim Summit in November; 07:15 AM Hawiian Time, on Wednesday the 11th. That's Pacific Time minus two hours. The coffee better be damn strong.
September 2009 Archives
News today that a federal judge has rejected the approval of GM sugar beets by the USDA. The ruling stated that the government should have done an environmental impact statement, and is similar to a ruling two years ago that led to halting the planting of GM alfalfa. As in that case, according to the New York Times, "the plaintiffs in the [sugar beet] lawsuit said they would press to ban planting of the biotech beets, arguing that Judge White's decision effectively revoked their approval and made them illegal to grow outside of field trials." The concern voiced by the plaintiffs, and recognized by the judge, is that pollen from the GM beets might spread transgenes that contaminate GM-free beets.
A few other tidbits from the article: sugar beets now supply about half the US sugar demand, and it seems that GM sugar beets account for about 95% of the US crop (I cannot find any data on the USDA site to support the latter claim). A spokesman for the nation's largest sugar beet processor claims that food companies, and consumers, have completely accepted sugar from the modified beets -- as they should, because it's the same old sugar molecule.
I got lured into spending most of my day on this because I noticed that the Sierra Club was one of the plaintiffs. This surprised me, because the Sierra Club is less of a noisemaker on biotech crops than some of the co-plaintiffs, and usually focuses more on climate issues. Though there is as yet no press release, digging around the Sierra Club site suggests that the organization wants all GM crops to be tested and evaluated with an impact statement before approval. But my surprise also comes in part because the best review I can find of GM crops suggests that their growing use is coincident with a substantial reduction in soil loss, carbon emissions, energy use, water use, and overall climate impact -- precisely the sort of technological improvement you might expect the Sierra Club to support. The reductions in environmental impact -- which range from 20% to 70%, depending on the crop -- come from "From Field to Market" (PDF) published earlier this year by the Keystone Alliance, a diverse collection of environmental groups and companies. Recall that according to USDA data GM crops now account for about 90% of cotton, soy, and corn. While the Keystone report does not directly attribute the reduction in climate impacts to genetic modification, a VP at Monsanto recently made the connection explicit (PDF of Kevin Eblen's slides at the 2009 International Farm Management Congress). Here is some additional reporting/commentary.
So I find myself being pulled into exploring the cost/benefit analysis of biotech crops sooner than I had wanted. I dealt with this issue in Biology is Technology by punting in the afterword:
We do live in interesting times.
A few other tidbits from the article: sugar beets now supply about half the US sugar demand, and it seems that GM sugar beets account for about 95% of the US crop (I cannot find any data on the USDA site to support the latter claim). A spokesman for the nation's largest sugar beet processor claims that food companies, and consumers, have completely accepted sugar from the modified beets -- as they should, because it's the same old sugar molecule.
I got lured into spending most of my day on this because I noticed that the Sierra Club was one of the plaintiffs. This surprised me, because the Sierra Club is less of a noisemaker on biotech crops than some of the co-plaintiffs, and usually focuses more on climate issues. Though there is as yet no press release, digging around the Sierra Club site suggests that the organization wants all GM crops to be tested and evaluated with an impact statement before approval. But my surprise also comes in part because the best review I can find of GM crops suggests that their growing use is coincident with a substantial reduction in soil loss, carbon emissions, energy use, water use, and overall climate impact -- precisely the sort of technological improvement you might expect the Sierra Club to support. The reductions in environmental impact -- which range from 20% to 70%, depending on the crop -- come from "From Field to Market" (PDF) published earlier this year by the Keystone Alliance, a diverse collection of environmental groups and companies. Recall that according to USDA data GM crops now account for about 90% of cotton, soy, and corn. While the Keystone report does not directly attribute the reduction in climate impacts to genetic modification, a VP at Monsanto recently made the connection explicit (PDF of Kevin Eblen's slides at the 2009 International Farm Management Congress). Here is some additional reporting/commentary.
So I find myself being pulled into exploring the cost/benefit analysis of biotech crops sooner than I had wanted. I dealt with this issue in Biology is Technology by punting in the afterword:
Obviously we will all be talking about biotech crops for years to come. I don't see how we are going to address the combination of 1) the need for more biomass for fuel and materials, 2) the mandatory increase in crop yields necessary to feed human populations, and 3) the need to reduce our climatic impacts, without deploying biotech crops at even larger scales than we have so far. But I am also very aware that nobody, but nobody, truly understands how a GM organism will behave when released into the wild.The broader message in this book is that biological technologies are beginning to change both our economy and our interaction with nature in new ways. The global acreage of genetically modified (GM) crops continues to grow at a very steady rate, and those crops are put to new uses in the economy every day. One critical question I avoided in the discussion of these crops is the extent to which GM provides an advantage over unmodified plants. With more than ten years of field and market experience with these crops in Asia and North and South America, the answer would appear to be yes. Farmers who have the choice to plant GM crops often do so, and presumably they make that choice because it provides them a benefit. But public debate remains highly polarized. The Union of Concerned Scientists recently released a review of published studies of GM crop yields in which the author claimed to "debunk" the idea that genetic modification will "play a significant role in increasing food production" The Biotechnology Industry Organization responded with a press release claiming to "debunk" the original debunking. The debate continues.
We do live in interesting times.
Here is Michael Specter's article on synthetic biology "A Life of Its Own".
Last week's Economist has another story on biohacking, "Hacking goes squishy", that contains a nod or two to the economic context and also has a version of my cost curves. I have a couple of thoughts.
The cost curve figure in the article was finished early August, and since then I have decided to add additional data points. Just a couple of days ago, an ad from Mr. Gene (a division of GENEART) showed up in my inbox advertising synthesis for $.39/base pair. I haven't had time to figure out why GENEART itself charges $.44/base, but presumably there is some additional customer service/sequencing/etc. thrown in. The latest commercial cost for oligos (in low volume) appears to be about $.15/base, which is actually a slight increase compared to prices I found a couple of years ago. More on this later.
On the sequencing side of things, Illumina has delivered its first commercial human genome at $48,000. Here is the Bio-IT World summary: "Illumina completed the sequence at its CLIA-certified laboratory, producing more than 110 billion base calls, good for 30X coverage of the genome and the identification of some 300,000 novel single nucleotide polymorphisms." I'll call it $8x10^(-6) per finished base, even though they actually sequenced many more bases than are in a human genome.
In other sequencing news, Complete Genomics just announced (PDF) the sequencing of 14 individuals for various academic projects. They claim to be on track to offer $5000 human genomes in the next six months. Helicos made a lot of noise last month with the publication of Steve Quake's genome at a cost in reagents of ~$48,000. While all the numbers in the article are impressive, like many observers I still have questions about the actual cost per base in a commercial operation. Labor? Cost of capital? Nonetheless, the technology is impressive.
The cost of sequencing continues to fall rapidly. The race to the bottom is well under way. Here is the figure:
It is interesting that the oligo and gene synthesis numbers have the appearance of slowing down. I don't believe this is evidence of a real trend, but rather that the cost of synthesis is now about labor and finance rather than about raw materials. And sequencing (proof reading) of synthetic genes now accounts for a good hunk of the cost, depending on what exactly you are synthesizing. Since I have now seen several different technologies that can be used to reduce costs, I expect prices to continue falling in the years to come. One technology nearing the marketing stage enables the use of unpurified oligos in gene assembly, including those synthesized on chips, through true error correction rather than error removal. While the consequent reduction in the cost of raw materials may not add up to much, there should be substantial cost improvements from 1) reducing required sequencing and 2) the ability to automate assembly.
I can also now update my "genetically modified domestic product" (GMDP) numbers for the US. My earlier article "Laying the foundations for a bio-economy" (journal link), contained an estimate that genetically modified systems generate revenues that are the equivalent of about 1% of US GDP. It turns out that is too small.
The reason for the underestimate is that I was overly trusting of reporting by The Financial Times, Nature Biotechnology (upper left panel), and others, who all published stories claiming that 2007/8 revenues from genetically modified crops were about US$ 8 billion worldwide and a bit over $4 billion in the US. It is interesting to me that all these organizations misreported in exactly the same way a number published by the ISAAA in its report "Global Status of Commercialized Biotech/GM Crops: 2008". In their defense, the reporters probably just had access to the executive summary, which contains the phrase "the global market value of biotech crops... was US$7.5 billion", and they were probably in a hurry to meet deadlines. But the very next sentence in the executive summary reads "The value of the global biotech crop market is based on the sale price of biotech seed plus any technology fees that apply." So that ~$8 billion worldwide is just seeds and related fees. And seeds grow. Into bigger things. With greater value. Like crops.
A quick visit to the USDA reveals US revenues from GM crops that is in the neighborhood of $100 billion. Here is a nice figure showing crop adoption since 1996, which gives us the percentage of acres planted in GM seeds. Then, jumping over to the National Agricultural Statistics Service, you can figure out the revenues per crop. Put it all together and you find out that in 2007 the value to US farmers of revenues from GM crops was close to $70 billion.
Here is a table from Biology is Technology that lays out some of the global numbers up through 2007:
I left out of the book any discussion of what benefit GM crops give compared to non-GM crops because I don't yet trust any of the numbers I have found; estimates range from -30% to +30%. When I have time to sort it out for myself, I will publish something. Until then, I would note that it seems unlikely to me that farmers around the world would keep buying GM seeds (that are more expensive than non-GM seeds) -- and buying more GM seeds every year -- if they didn't benefit financially from making that choice.
By the way, for those who have asked or are curious, I just learned that the book comes off the presses in the first week of December, though I don't know when they actually will be available in stores and whatnot. No news yet on e-versions for the Kindle, etc., but let me know if you are interested.
Anyway, although not all the numbers for 2008-2009 are available (including GDP), at this point I am pretty comfortable with the estimate that revenues from GM systems in 2009 will be the equivalent of about 2% of US GDP. That is a big number. As big as mining in the US. And there is no way mining is growing at ~15% a year. The future of the economy is biology.
The cost curve figure in the article was finished early August, and since then I have decided to add additional data points. Just a couple of days ago, an ad from Mr. Gene (a division of GENEART) showed up in my inbox advertising synthesis for $.39/base pair. I haven't had time to figure out why GENEART itself charges $.44/base, but presumably there is some additional customer service/sequencing/etc. thrown in. The latest commercial cost for oligos (in low volume) appears to be about $.15/base, which is actually a slight increase compared to prices I found a couple of years ago. More on this later.
On the sequencing side of things, Illumina has delivered its first commercial human genome at $48,000. Here is the Bio-IT World summary: "Illumina completed the sequence at its CLIA-certified laboratory, producing more than 110 billion base calls, good for 30X coverage of the genome and the identification of some 300,000 novel single nucleotide polymorphisms." I'll call it $8x10^(-6) per finished base, even though they actually sequenced many more bases than are in a human genome.
In other sequencing news, Complete Genomics just announced (PDF) the sequencing of 14 individuals for various academic projects. They claim to be on track to offer $5000 human genomes in the next six months. Helicos made a lot of noise last month with the publication of Steve Quake's genome at a cost in reagents of ~$48,000. While all the numbers in the article are impressive, like many observers I still have questions about the actual cost per base in a commercial operation. Labor? Cost of capital? Nonetheless, the technology is impressive.
The cost of sequencing continues to fall rapidly. The race to the bottom is well under way. Here is the figure:
It is interesting that the oligo and gene synthesis numbers have the appearance of slowing down. I don't believe this is evidence of a real trend, but rather that the cost of synthesis is now about labor and finance rather than about raw materials. And sequencing (proof reading) of synthetic genes now accounts for a good hunk of the cost, depending on what exactly you are synthesizing. Since I have now seen several different technologies that can be used to reduce costs, I expect prices to continue falling in the years to come. One technology nearing the marketing stage enables the use of unpurified oligos in gene assembly, including those synthesized on chips, through true error correction rather than error removal. While the consequent reduction in the cost of raw materials may not add up to much, there should be substantial cost improvements from 1) reducing required sequencing and 2) the ability to automate assembly.
I can also now update my "genetically modified domestic product" (GMDP) numbers for the US. My earlier article "Laying the foundations for a bio-economy" (journal link), contained an estimate that genetically modified systems generate revenues that are the equivalent of about 1% of US GDP. It turns out that is too small.
The reason for the underestimate is that I was overly trusting of reporting by The Financial Times, Nature Biotechnology (upper left panel), and others, who all published stories claiming that 2007/8 revenues from genetically modified crops were about US$ 8 billion worldwide and a bit over $4 billion in the US. It is interesting to me that all these organizations misreported in exactly the same way a number published by the ISAAA in its report "Global Status of Commercialized Biotech/GM Crops: 2008". In their defense, the reporters probably just had access to the executive summary, which contains the phrase "the global market value of biotech crops... was US$7.5 billion", and they were probably in a hurry to meet deadlines. But the very next sentence in the executive summary reads "The value of the global biotech crop market is based on the sale price of biotech seed plus any technology fees that apply." So that ~$8 billion worldwide is just seeds and related fees. And seeds grow. Into bigger things. With greater value. Like crops.
A quick visit to the USDA reveals US revenues from GM crops that is in the neighborhood of $100 billion. Here is a nice figure showing crop adoption since 1996, which gives us the percentage of acres planted in GM seeds. Then, jumping over to the National Agricultural Statistics Service, you can figure out the revenues per crop. Put it all together and you find out that in 2007 the value to US farmers of revenues from GM crops was close to $70 billion.
Here is a table from Biology is Technology that lays out some of the global numbers up through 2007:
|
Table 11.1 Revenues from genetically modified systems in 2007 |
||||
|
Sector |
Worldwide revenues ($ billions) |
US revenues ($ billions) |
% of US GDP (total of $~14
trillion) |
Revenue growth rate in US (%) |
|
Biotech drugs ("biologics") |
79 |
67 |
.48 |
15-20 |
|
Agbiotech/GMOs |
128 (est) |
69 |
.49 |
10 |
|
Industrial |
~110 |
~85 |
.61 |
15-20 |
I left out of the book any discussion of what benefit GM crops give compared to non-GM crops because I don't yet trust any of the numbers I have found; estimates range from -30% to +30%. When I have time to sort it out for myself, I will publish something. Until then, I would note that it seems unlikely to me that farmers around the world would keep buying GM seeds (that are more expensive than non-GM seeds) -- and buying more GM seeds every year -- if they didn't benefit financially from making that choice.
By the way, for those who have asked or are curious, I just learned that the book comes off the presses in the first week of December, though I don't know when they actually will be available in stores and whatnot. No news yet on e-versions for the Kindle, etc., but let me know if you are interested.
Anyway, although not all the numbers for 2008-2009 are available (including GDP), at this point I am pretty comfortable with the estimate that revenues from GM systems in 2009 will be the equivalent of about 2% of US GDP. That is a big number. As big as mining in the US. And there is no way mining is growing at ~15% a year. The future of the economy is biology.
