A Bozeman biofuels startup is partnering with Montana State University to turn a fungus discovered in the highly acidic hot springs of Yellowstone National Park into sustainable energy.

The discovery -- a fungus pulled from a geyser basin in 2009 and now dubbed MK7 -- came from research allowed under a permit MSU has on file with the National Park Service. MSU has filed a patent on MK7.

Funded by a Small Business Innovation and Research grant from the National Science Foundation, Mark Kozubal and his startup company, Sustainable Bioproducts, will conduct further research and study the product's fit within the marketplace. Kozubal earned a doctorate in microbiology from MSU in 2010.

MK7 is the product of research done by Kozubal and co-inventors William Inskeep, a professor in the Department of Land Resources and Environmental Sciences, and Richard Macur, an assistant research professor with the department. They discovered that MK7 not only thrives in Yellowstone's extreme hot springs, it eats algae and, when dried, oozes oil.

The lipids that are the byproduct are also high in the kind of enzymes that industries often covet for the production of a range of goods.

"The most important part of our research now is to test the technology further and investigate the feasibility of using this organism to produce biofuels and other products," Kozubal said.

The $150,000 grant will help Sustainable Bioproducts do independent research at its facility on the MSU Innovation Campus, as well as sponsor a $50,000 research grant for work in MSU labs. Sustainable Bioproducts has licensed the technology for commercial enterprise.

While receiving six months of funding was clearly a vote of confidence in MK7, Kozubal said the goal is to have the technology showing enough promise to warrant a $750,000 grant for more research and development.

That would put MK7 in an excellent position for either sub-licensing the technology to a corporation or garnering the private equity investment needed to launch MK7-based products on its own.

MK7's discovery came as Kozubal was on a field trip to Yellowstone to teach Bozeman middle school students about microbial life in harsh environments. The trip was part of the educational outreach required of Kozubal as a doctoral student.

Kozubal, who is the sole employee of Sustainable Bioproducts, said he is confident that something good will come as he and his MSU partners continue their work on MK7.

Rebecca Mahurin, director of the MSU Office of Technology Transfer, said MSU remains committed to the goal of putting the science and technology from campus research labs into the hands of Montana residents.

"We're excited to see Sustainable Bioproducts moving forward with this technology," Mahurin said. "It's especially nice to see the license for a technology like MK7, which has major implications for biofuels production, go to a local company."


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