The first photo of an ignitable algae-based fuel, taken in January during a bench test at Texas-based Sustainable Power
Sun 28 Sept 2008 – Occasional observers of the algae biofuels movement were stunned recently when Sapphire Energy, a company which has yet to make a pilot-scale product, concluded its new round of financing by topping the $100 million mark, a first for a biofuels venture. Notable among its investors are Cascade Investments, the personal investment vehicle of Bill Gates, and Venrock Partners, an investment partnership for the Rockefeller family.
But it shouldn’t have been too surprising, except for the fact that Sapphire is receiving support in lieu of other companies pursuing the technology. For the stakes are huge: replacing petroleum gasoline with an alternative fuel brings a market worth more than $600 billion per year into play; and as much as $2.5 trillion worldwide.
Even in the thin-margin world of fuel production and distribution, the industry can hope to generate annual global profits of between $100 and $150 billion, enough to support a market valuation exceeding one trillion dollars. A dominant player – and who better than famous monopolists like Bill Gates and the Rockefellers to understand the power of monopoly – could realize a market value at or above a half-trillion dollars. That’s what makes $100 million investments look affordable risks.
Why algae? It’s possible to make enough of it – unlike first-generation biomass, which is unlikely to replace more than 10 to 30 percent of the global fuel supply and yet cause price disruption in commodities like corn or sugar cane (or, at least, prompting fierce debate over its potential to do so).
On paper, algae is not the most promising fuel source. Probably hydrogen is, if we only knew more about how to make, transport and store it safely and at an affordable cost, and make affordable cars that run on it. Algae is one of the most efficient organisms on earth in terms of converting sunlight to biomass, at an energy efficiency approaching 5% compared to less than one for fast-growing crops like sugarcane. Only cyanobacteria, at around 10%, has more efficiency, but the science of producing fuel from cyanobacteria is just not far enough along to establish a timeline and production goals.
We know a lot about making microalgae, courtesy of a twenty-year programme at the National Renewable Energy Laboratory (NREL) that was shut down in 1996 but recently revived when oil prices began to skyrocket.
We don’t yet know enough about making it at commercial scale in an economically viable manner. And, we don’t know enough about which of the more than 30,000 strains of microalgae have the right characteristics for biofuel production – among factors such as lipid (oil) content, resistance to contamination and ease of oil recovery. We don’t know nearly enough about harvesting algae oils in a continuous manner at commercial scales and affordable costs. We don’t even know if we should target algae oils for biodiesel production or use the whole organism is a gasification process that converts biomass to green gasoline or diesel and avoids the problems of fuel conversion.
So, we have serious questions. Companies like Sapphire, Solazyme, PetroAlgae, PetroSun and Green Star are working hard in the US on answering questions about algae production and recovery. Thoughtful observers like Tyler Krutzfeld, President of MontVista Capital and a board member of the Algal Biomass Organization, theorize that Europe and China may well end up as the leaders in the global algal fuel industry.
Further, companies that can use algae oil or biomass as a feedstock are hungering for the algae producers to scale up capacity. Sustainable Power in Texas has tested its Rivera process using algae as a feedstock. Companies that are working on synthetic gasoline and diesel from biomass, like LS9 or UOP Honeywell, are watching developments closely. Early-stage algae companies like Bionavitas are rumoured to have strong intellectual property collections.
The Defense Advanced Research Projects Administration (DARPA) has a project underway to develop algae fuels for military use. Their interest is serious, going back to certain war game scenarios run earlier in this decade that showed the US military grinding to a halt for lack of fuel, prior to achieving its military objectives –the same crisis that saved the Allies in the Battle of the Bulge in World War Two when the Axis forces literally ran out of fuel while following up a successful breakthrough in the Ardennes forest.
Right now, production is measured in the tens of thousands of gallons, not the million or billions. The most perplexing problem at the moment is harvest, but all of the challenges mentioned previously are daunting, real, potential game-enders, and will take years not months to resolve.
As of now, there are four processes under examination. The traditional method is open pond cultivation, using large ovular ‘raceways’. Most of the NREL work focused on this technology. Contamination is an issue, both from competing organisms and other microalgae. The problem of shade is perplexing too: as algae blooms, sunlight is blocked and limits the growth of the system when it is reflected rather than absorbed.
Photobioreactors are the other popular method. These are closed tubes in which nutrients, CO2 and sunlight are fed in a controlled manner. The issue? The cost per tonne of biomass is, at this time, still prohibitive in the trials that have been widely reported.
Solazyme, in California, is pursuing a novel approach. The Solazyme team grows microalgae in giant fermentation tanks based on a diet of sugar, carbon dioxide and nutrients, but no sunlight, which they say allows them to achieve the scale of open pond cultivation while retaining the control over contamination that makes photobioreactors attractive.
The fourth method is wild harvest, which Aquaflow is pioneering down in New Zealand, harvesting from rivers; Aquaflow is reportedly in line to become an eventual fuel supplier for Air New Zealand.
Who’s in the lead? It’s hard to say. Solazyme continues to make small batches of algae fuel and insists that it is limited less by technology than access to capital to scale up its process. PetroSun has commenced development of some demonstration-scale facilities. Canadian technology company Bioco has a new harvesting technology they are ready to trial.
Two organizations have sprung up to serve the fledgling industry. The aviation industry is, by and large, backing the Algal Biomass Organization, based in Seattle. Boeing, the Air Transport Association, IATA, and Air New Zealand are among the sponsors, along with some of the better known scientists in the field. Small entrepreneurs have been flocking in decent numbers to the National Algae Association, founded by investment banker Barry Cohen, based in Houston. The organizations are already bickering, and even managed to schedule their important autumn conferences on the same days in different cities.
One organization that has not yet fully joined the ‘algae bloom’ is the Department of Energy, which has limited its activities to a resumption of research at NREL and talk of a Request for Proposal (RFP) to support demonstration-scale algae fuel. DOE officials were notably absent from industry gatherings a year ago, but have been more visible in past months.
What can we say about the timeline and viability of algae? The technology is promising, but the breakthrough awaited is in the harvest: algae production and conversion to fuel are parts of the process less fraught with peril. Issues such as carbon capture and offsets are under consideration; though important, are not yet on critical path until microalgae reaches scale and carbon sourcing becomes an issue.
Visions of making algae in large sections of the sun-drenched western American desert from carbon sequestered from power plants are science fiction. Transporting the fuel out of the desert would require massive changes in infrastructure, not to mention cost. Transporting carbon dioxide and massive quantities of water into some mythical desert location is even less feasible. Diagrams showing endless arrays of algae bioreactors belong in EPCOT, since they are part of an experimental prototype community of tomorrow we do not yet know how to engineer.
Instead, algae is likely to be made right where it is used, in ever-smaller micro-plants that minimize the carbon expended to move feedstocks and fuels from source to plant to market. A good 10 million-gallon-per-year technology with a low water usage, continuous harvest and a process that can be duplicated by college graduates, not just rocket scientists, might just be the ticket.
“Maybe a week, maybe a year, maybe never,” said the fictional Dr David Drumlin in the movie Contact when asked when a vital breakthrough in that film’s storyline would occur. It is much the same with microalgae but, for now, cautious optimism and a timeline looking at commercial scale by 2015 looks feasible.
Possible, probable, preferred: so goes the futurist division of the world into scenarios. So where’s algae? Given its bloom rate, scale up could be rapid, and there is every reason to rate algae as a “possible” to become a major component of the Renewable Fuel Standard by the time the 36 billion gallon target is reached in 2022. Given a breakthrough in continuous harvest, we could well move the status up to “probable”. And for sure, we can already rate it “preferred”.
The author, Jim Lane, is Editor of Biofuels Digest, the widely read and respected daily international newsletter. To sign up for a free email subscription go to http://www.biofuelsdigest.com/.
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