You're right, The competition is definitely stiff - aside from craig, there's ls9, amyris, sapphire and a dozen other solid companies. On the upside, the market is very big, and the problem is certainly worth solving.
If you solve it, do you think you'll get and accept an offer you can't refuse from the oil companies? Craig Venter seems to have already taken an offer that he couldn't refuse from said companies.
Do you think anyone in the field is brave enough to go around the oil companies or is their distribution infrastructure too much to ignore?
I think the goal is to create a new source of renewable energy. I think the right oil company could be part of the process...all that said, 'if you solve it' is a pretty big if :)
I just see him as an extraordinary tough target with his portfolio of relevant patents and endless financial resources. There are rooms for others of course, and it's great that people are trying... I would if I had the resources. That or algae farms.