2008 Annual Report 1a.Objectives (from AD-416) To acquire, stabilize, characterize, and improve new microorganisms as biocatalysts to produce large volumes of high value bioproducts from glycerol and plant lipids to facilitate biotechnological innovation and to ensure increased income for U.S. farmers and the agricultural industry. 1b.Approach (from AD-416) Develop new microbial systems to modify the chemical and physical properties of soybean oil and its fatty acids to enhance their industrial potential as additives, specialty chemicals, physiologically active substances or for major components of cosmetics, lubricants, plastics, surface coatings and detergents. Microorganisms will be selected from the Agricultural Research Service (ARS) Culture Collection using the predictiveness derived from comparisons of deoxyribonucleic acid (DNA) sequences and from isolation from soil and wastewater samples collected from biodiesel productions sites. Products will be characterized and their production enhanced through enzymatic processes or from continuous production cell bioreactor technologies. Conversion pathway engineering by physical, biochemical and molecular biology will be undertaken. The most promising microorganisms will be selected for large-scale production process development and economic evaluation. 3.Progress Report A mini-bioreactor and a traditional fermentor were investigated for the production of oxygenated fatty acids. Due to the instability of strain ALA2 and synthesis of many products, it was not easy to produce a single product. Molecular engineering of strain ALA2 to block certain enzymes to prevent further conversion to other products is the key to success. Collaboration with University of Kentucky on the molecular engineering of strain ALA2 was successful in isolation and characterization of ALA2 monooxygenase gene. However, expression of this gene in Escherichia coli was not successful. During a search for new uses of bioglycerin, we screened cultures from the Agricultural Research Service (ARS) Culture Collection and found that glycerol can be converted to arachidonic acid and dihomo-gamma-linolenic acid (both are high valued essential fatty acids) by the filamentous fungus, Mortierella. Optimum production conditions were investigated. We found that 7,10-dihydroxy-8(E)-octadecenoic acid (DOD) produced from oleic acid by Pseudomonas aeruginosa PR3 has anti-microbial activities. In collaboration with the Kyungpook National University, South Korea, we found that DOD can be produced directly from vegetable oil through lipase-induction in PR3 system. This omitted one extract step in converting vegetable oil to oleic acid and saves expenses in industrial production. Yeasts from three phylogenetic groups were tested for production of the polyols, arabitol, mannitol and xylitol. One species from each of the groups was noted for high yields and one of the species produced nearly exclusively high levels of arabitol. A large number of growth conditions were tested to optimize production. This research addresses NP-306, Component 2. 4.Accomplishments 1. PRODUCTION OF INDUSTRIALLY IMPORTANT BIOCHEMICALS FROM AGRICULTURAL BY-PRODUCTS. Several fungi were demonstrated to produce industrially important biochemicals when grown on glycerol, an abundant by-product from the manufacture of biodiesel fuel from vegetable oils. Among these were arachidonic acid and dihomo-gamma-linolenic acid by Mortierella and arabitol, mannitol and xylitol by several yeasts. This research has produced novel targets for production of industrially important biochemicals and impact is evidenced by establishment of a new material transfer agreement and publications in high profile biotechnology journals. This research addresses NP 306, Component 4, Problem Area 4.1.1.1. 5.Significant Activities that Support Special Target Populations None. 6.Technology Transfer Number of New Commercial Licenses Executed 2 Number of Non-Peer Reviewed Presentations and Proceedings 1 Review Publications Bae, J., Kim, D., Suh, M., Oh, S., Lee, I., Kang, S., Hou, C.T., Kim, H. 2007. Production and Identification of a Novel Compound, 7,10-dihydroxy-8(E)-hexadecenoic Acid from Palmitoleic Acid by Pseudomonas aeruginosa PR3. Applied Microbiology and Biotechnology. 75:435-440. Lee, G., Bae, J., Suh, M., Kim, I., Hou, C.T., Kim, H. 2007. New finding and optimal production of a novel extracellular alkaline lipase from Yarrowia lipolytica NRRL Y-2178. Journal of Microbiology and Biotechnology. 17:1054-1057. Hilker, B.L., Fukushige, H., Hou, C.T., Hildebrand, D. 2007. Comparison of Bacillus monooxygenase genes for unique fatty acid production. Progress in Lipid Research. 47(1):1-14. Levinson, W.E., Kuo, T., Knothe, G.H. 2008. Characterization of fatty amides produced by lipase-catalyzed amidation of multihydroxylated fatty acids. Bioresource Technology. 99:2706-2709. Kuo, T., Rooney, A.P., Isbell, T. 2008. Conversion of lesquerolic acid to 14-oxo-11(Z)-eicosenoic acid by genetically variable Sphingobacterium multivorum strains. Current Microbiology. 57:55-60. Hou, C.T. 2008. New bioactive fatty acids. Asia Pacific Journal of Clinical Nutrition. 17:192-195. Chang, I., Bae, J., Suh, M., Kim, I., Hou, C.T., Kim, H. 2008. Environmental optimization for bioconversion of triolein into 7,10-dihydroxy-8(E)-octadecenoic acid by Pseudomonas aeruginosa PR3. Applied Microbiology and Biotechnology. 78:581-586. Hou, C.T. 2008. Production of arachidonic acid and dihomo-gama-linolenic acid from glycerol by oil-producing filamentous fungi, Mortierella in ARS Culture Collection. Journal of Industrial Microbiology and Biotechnology. 35:501-506.