A Conversation with Anna Rath

Posted on July 6th in news

South San Francisco, CA
INDUSTRIAL BIOTECHNOLOGY: Anna, congratulations on receiving the 2016 BIO Rosalind Franklin Award for Leadership in Industrial Biotechnology. As founder and leader of NexSteppe, a company pioneering the development and commercialization of  sorghum varieties tailored for the feedstock needs of multiple biobased industries, your career and commitment to the field certainly embody the spirit of Rosalind Franklin. This award recognizes the accomplishments and contributions of women in the field of industrial biotechnology. How would you describe your reaction on learning that you had been chosen to receive the award?

ANNA RATH: I would like to first say I am really happy that the award exists. There is a lot of good data out there that companies perform better when they have diversity, and I think we would all like to see women better represented, especially in science-related disciplines. My reaction upon learning I was chosen was that I am honored to receive it. I’m flattered to be in the company of [past recipients] Jennifer Holmgren [LanzaTech CEO] and Debbie Yaver [director at Novozymes], who have made amazing contributions to the field.

IB: As you have risen through leadership positions and watched the industry grow and evolve during your career, how have you seen the opportunities for and representation of women change at the level of the bench scientist up through management, and their ability to advance their careers and take on leadership positions?

ANNA RATH: There are definitely some places where women are very well represented, and I think increasingly bench science is one of them. But there are also places where women are still few and far between, and as [CEO of an] agricultural business, [I can attest to] agricultural fields being among them. I think the challenge is reaching the base, critical mass of women across all roles that is needed to then encourage more women to see those role models and feel able to follow in their footsteps. I think when there are no women, it’s really hard for women to look at a role, a job, and say, ‘I could do that.’ If you have women in those roles, who can mentor you, and can be seen as a role model, then it’s a lot easier to increase the representation of women in the industry.

IB: How did you become interested in science, and did you ever feel dissuaded from pursuing this interest?

ANNA RATH: I always liked science, even when I was a small child some of my favorite bedtime stories were actually science textbooks that my parents would read to me. My passion for biological and chemical sciences was always there and always felt supported. But I think there were definitely times, especially in the hard sciences like math and physics, where there were certainly things that could have deterred me. In junior high school, I got into the University of Minnesota Talented Youth Mathematics Program, where basically you would do two years of math every year, starting in seventh grade. My math teacher at my school sat down with me and said, ‘You know, girls generally don’t do very well in this program because they’re too social, so they don’t like to spend the time.’ For me, this was the best motivator I could have ever had to go into that program and put everything I had into being successful in it, which I was. I think those kinds of events can go both ways. It could be discouraging or you could take it as exactly the motivator you need to bear down and do the things people either tell you that you can’t or don’t believe you can. Sometimes it’s blatant; sometimes it’s not realized even by the person [doing the discouraging]. I’m a big believer in, ‘What doesn’t kill you makes you stronger.’ For me, every time you see a situation where somebody thinks you can’t because you’re a woman, someone is not listening to you because you’re a woman, or someone is not respecting your opinion in the way you would like them to because you’re a woman, I think it’s a motivator. It’s an opportunity to say, ‘ok, then let me show you that I can do this and that I belong here,’ whatever the situation is.

IB: What do you think the industry can do as a whole to increase diversity?

ANNA RATH: I think the key is role models and mentoring. It’s just so much easier to see yourself doing something if someone who you can relate to is already doing it. Debbie Yaver did an education outreach program [at the recent World Congress on Industrial Biotechnology]. It is exactly that kind of thing that gets results. Little kids that start out wanting to be an astronaut grow up and develop a more mature list of things that they want to do, but they do that based on what they’ve seen, what they’ve come across. And the more young women see women in science roles, management roles, and agricultural roles, the more they’ll say, ‘I could do that. That looks interesting.’

IB: How important is it at the current stage of development of the bioeconomy for a company to establish a world-wide network of collaborations to leverage its proprietary technology and realize the value of innovation at commercial scale?

ANNA RATH: In NexSteppe’s case, we knew getting into the business that there were a lot of things we couldn’t control. We couldn’t control policy. We couldn’t control commodity prices. We couldn’t control the pace of downstream technology development and infrastructure build out. But what we could do is focus on crops that can be grown anywhere in the world and then focus on optimizing those crops for multiple, different end uses. That way if one end market is developing slower than you had hoped, something else is going faster than you had hoped. That sort of diversity and inherent hedging I think has been really essential to NextSteppe’s success.

IB: In your view, how can we shift the discussion around biobased products from a focus on economics to a focus on overall environmental footprint?

ANNA RATH: I think the way the conversation is going to change is by providing the world with more examples of biobased products so consumers understand what that means and why that’s better, so they can then feel good about supporting it.
There are a few products out there, such as TerraVia’s Algenist or Coca-Cola’s PlantBottle, where the story has actually been told and given people an opportunity to feel good about that story. But there aren’t enough examples. A lot of the focus [in the industry] is on the science, as you would expect—how to best make lactic acid, succinic acid, gluconic acid—and that’s great, but none of that reaches customers or has customer appeal. What we need is more people doing things with those biobased raw materials that turn into consumer products that create awareness. Many of the products this industry creates aren’t consumer products, but the way you’re going to change the conversation is through that consumer awareness. Brands need to get in there and be willing to tell the story.

IB: How would you describe the mood of the industry at this time?

ANNA RATH: I think it’s really easy to look around the world right now and find reasons to be pessimistic about this industry. But a lot of those issues are going to be relatively short-lived. And if you look at the bigger forces that drive this industry, they are what got the industry started in the first place and the reasons why it needs to succeed. These forces are all still there, and in some cases in a much stronger way than ever before. The problem is we’ve gone through one funding cycle in this industry, and we haven’t yet gotten to the next one. As a result, you have a lot of people caught in that trough. We have to buckle down, keep that optimism, and get to the other side. What doesn’t kill you makes you stronger. It is always windiest near
the peak.

Editor’s Note: The following text is excerpted from remarks delivered by Anna Rath on receiving the Rosalind Franklin award
from the Biotechnology Innovation Organization (BIO) at the BIO World Congress, April 19, 2016, in San Diego, CA.

First, I’d like to thank BIO and the Rosalind Franklin society for collaborating to create this award in honor of Ms. Franklin’s critical work in X-Ray crystallography and foundational contribution to industrial biotechnology through enabling the elucidation of the structure of DNA. I’m extremely honored to be chosen for this award and flattered by the extraordinary company of former award winners including Jennifer Holmgren of Lanzatech and Debbie Yaver of Novozymes. In receiving this award, I read up a bit on the life of Ms. Franklin. Three things jumped out at me. First, I was incredibly impressed by all that she accomplished at a time when women faced such huge obstacles. Second, I felt a kindred spirit in her passion for using science as a means to solve problems. Finally, I learned that one of her early research positions was actually with the British Coal Utilisation Research Association. Given that one of the things NexSteppe is focused on is optimizing biomass for combustion to be able to displace coal, and much of what we do would not be possible without the work done by Ms. Franklin, I find it entertaining and a bit ironic that we have coal to thank for some of her early career development.
For anyone not familiar with NexSteppe, we are a global seed company committed to enabling the bioeconomy by developing high-quality, cost-effective, scalable and reliable feedstocks for the entire range of biopower, biogas, advanced and cellulosic biofuels and biobased products. As the commercial scale of these industries grows, so too does the need for and focus on the availability of sustainable and dependable raw materials, and we are excited to be doing our part to help drive the continued growth and development of the bioeconomy.
So, with all of that as background, let me say that this is an Interesting time in the history and development of industrial biotechnology to be receiving this award. The industry is faced with challenges on all fronts. We have:
. The lowest oil prices in thirteen years, and other commodity prices following suit
. A lack of policy support and stability in precisely those countries, like the United States, that everyone expected to be champions of and leaders in the bioeconomy
. Theoretical concerns about land use change, and, particularly here in the US, climate change deniers, having undue influence on policy debates
. The G20 still spending $452 billion per year subsidizing fossil fuel production relative to only $121 billion spent globally in subsidies for renewable energy production
. The Brazilian economic and political crisis – the worst recession in more than two decades, the longest downturn since the 1930s and a president facing impeachment
. A global economic slow-down – just last week the IMF cut its outlook for global growth in 2016 for the fourth time in the past year, and
. A generally difficult fundraising climate for early-stage companies, with public markets difficult to access, valuations on some high-profile privately held companies dropping, and acquisitions of new technologies by many of the agricultural, energy and chemical majors effectively on-hold due to the collapse in commodity prices – 91% of VCs in a recent Forbes survey expected valuations to decline this year (across all sectors) and 62% said their portfolios were cutting costs

As a result of all of this, many technologies are struggling to reach the scale necessary to really have impact and demonstrate the potential of this industry to fix some of the world’s most pressing problems.
Nevertheless, if we look out beyond the current environment, there is significant light at the end of the tunnel. Here’s my top ten list of reasons to be optimistic:

1. Advances in the industry
While it is proceeding more slowly than we had all hoped, technology development and infrastructure build-out is moving forward for biobased products and advanced and cellulosic biofuels, and more and more of these technologies are being proven at commercial scale and in real-world value chains

2. Gathering momentum around climate change
The US-China agreement on joint climate action was initiated in November 2014 and reaffirmed in September 2015.
Having the #1 and #2 emitters on board then paved theway for COP21, a historic agreement on climate change signed at the end of 2015. It will take time to implement all of the associated national policies, but the agreement to drive efforts toward a limit of only a 1.5 degree Celsius increase over pre-industrial levels is even more aggressive than what most had expected.
On the private side, there growing momentum around divestment of fossil fuel investments. The concept came to prominence through the commitment of major universities, including Stanford, Oxford, Georgetown, Syracuse and the UC system. The movement now includes more than 515 institutions ranging from pension funds to foundations, together controlling $3.4 trillion in assets.

3. Broader environmental issues related to fossil fuels continue, and there is increasing global awareness of these issues
Air quality is perhaps the one talked about most. All of us have heard about the issues in China, but India is even worse, and many other major emerging market cities are also just as bad or not far behind. We now have over 3 million premature deaths per year related to outdoor air pollution.
Similarly, we have all heard of the Deepwater Horizon oil spill, but just this month there was a spill out of the Keystone 1 pipeline in South Dakota of 17,000 gallons; last month 3,000 barrels were spilled out of a pipeline operated by PetroPeru, leaking into Amazon tributaries; and less than a year ago, 100,000 gallons were leaked out of a pipeline here in California, including 21,000 gallons into the ocean.

4. Increasing realization that the concepts of ‘‘food v. fuel’’ and ILUC are not grounded in reality
Global level data shows that between 2000 and 2010, increases in farming intensity, particularly multiple cropping, resulted in a significant net increase in harvested hectares for food, feed and fiber production even as total agricultural land shrank and biofuel production increased to over 25 billion gallons globally. This is consistent with our experience at NexSteppe, where in Brazil, our largest market, our crops are most often grown during the renewal period between sugarcane crops, when the land would otherwise be fallow, or as a second crop following soybean, which can actually increase soybean yields. A recent report funded by the European Commission found that increased demand for biofuels made from sugar and starch crops can be met with low impacts on land use change, and that cellulosic feedstocks have a low or even positive LUC impact.

5. Elimination of fuel subsidies
While low oil prices are clearly not perfect for this industry, they may actually be doing some medium and long-term good.
Specifically, these low prices have created the opportunity, and in some cases a forcing mechanism, for drastic cuts in fuel subsidies around the world, most notably in Indonesia and Saudi Arabia, but also in India, Egypt, Malaysia, Nigeria, the UAE, Bahrain, Oman, Angola, Cameroon, Cote d’Ivoire and Haiti.

6. Resurgence of energy security concerns
US politicians are happiest when oil prices are moderate – high enough to support domestic production and not too high to keep motorists happy. The original energy security concerns leading to RFS and other industry-supporting policies were, of course, coupled to high oil prices (though, back then, we thought $60 was high), but low prices create problems too.
Due to current low prices, US crude production is forecast to drop from 9.4M bpd in 2015 to 8.7 this year and 8.2 in 2017, and the oil and gas rig count is at its lowest level since 1999.
Meanwhile, with demand continuing to grow, daily crude imports over the past 13 weeks averaged 7.9M bpd, up from 7.1M in the 13 weeks ended July 3, 2015 when the oil price first dropped and stayed below $50.
While energy independence is a misnomer in a globally connected commodity world, a decline in the US industry at the hands of low prices, and the current refusal or inability of OPEC to do anything about these low prices, definitely dents the perception of increasing energy security and the complacency that this perception has created.

7. Rebalancing of global currencies
Dollar strength has been responsible for some of the commodity price drop and, for those of us who’ve moved beyond the US, has been hampering our revenue growth in dollar terms over the past few years. However, this strength has also meant that our global expansion is coming cheaper, and the recovery of other currencies relative to the dollar in coming years will now accelerate our revenue growth in dollar terms

8. Brazil
Its history as a leader in the bioeconomy, its agricultural prowess and the land opportunity it provides all remain. While the crisis is disturbing, the clear dominance of rule of law throughout the crisis is encouraging, and the example of Argentina shows that this kind of situation can recover very quickly once hope is restored.
In the meantime, high debt levels accumulated by both the government and Petrobras, the national oil company, over the past decade, have now forced the removal of the cap on gasoline prices, and by extension ethanol prices. On the power side, supply constraints and dependence on hydro mean that a small amount of economic recovery or a return to lower rainfall following El Nino could lead to a snap back in energy prices.

9. China
Has gone one step further than removing subsidies or caps and actually implemented a $40 floor on the price of oil, with proceeds going into an energy security fund. It has also announced a carbon cap and trade program coming in 2017
And, they are increasing their focus on remediation of contaminated land. They’ve publicly admitted that one-fifth of all farmland has levels of heavy metals high enough that these hectares should not be used for production of food or feed crops. This creates a massive opportunity for dedicated industrial crops that can provide both remediation and renewable energy.

10. What happens when commodity prices recover?
Significant reductions in R&D budgets among the agricultural, chemical and oil majors, in response to low commodity prices, means that as commodity prices do come back, these companies will be on the hunt for growth opportunities, and will be looking to the companies in this room to find them. What unites us all is using biotechnology in its many forms to disrupt conventional industries and provide solutions that are renewable, sustainable, cost-effective and reduce the world’s dependence on fossil fuels. The world needs us to do this. It needs our help to mitigate climate change, to reduce the air pollution and environmental degradation that comes with the use of fossil fuels, and to improve global energy security. So, I
encourage you all to see beyond the short-term negative factors currently affecting our industry, and to remain committed to realizing the brighter, cooler and cleaner future that all of our technologies enable.