2011-12-07

Co.Exist

Where's My Algae-Powered Car?

Algae was sold as a miracle cure to our fossil fuel addition--oil! produced by nature! But so far it has failed to materialize in large amounts. But new techniques and business models are on the verge of revitalizing the industry. The trick--make money on algae products that aren’t petroleum.

Algae, it seemed, would be the oil gushers of the 21st century. Grown in massive tanks, the microscopic plants can churn out enormous quantities of fuel already making its way into Army trucks, commercial airplanes, and select gas tanks.

The problem is that the process has been expensive and difficult to scale: Algae compete ferociously for sunlight, give up their oils only grudgingly, and demand lots of fresh water. Its prima-donna nature has forced a number of algae firms to declare bankruptcy. A 2010 report released by Berkeley’s Energy Biosciences Institute (EBI) says economically obtaining biofuel from algae is still a decade away. "Although well over 100 companies in the U.S. and abroad are now working to produce algal biomass and oil for transportation fuels, most are small and none has yet operated a pilot plant with multiple acres of algae production systems," according to the Institute. Two years ago, a 250-acre biofuel production system producing about 12,300 barrels would require oil prices of around $330 per barrel to break even, and about a 1,000-acre facility would need a price of $240 per barrel to avoid a loss. Regular fossil fuel oil costs less than $100 a barrel.  “It is clear,” says EBI, “that algal oil production will be neither quick nor plentiful."

But not impossible--and some companies are making advances in farming that could turn algae into an enormous cash crop. Two companies, Sapphire and Aurora Algae, are no longer using enclosed bioreactors, or pumping fresh or municipal wastewater. Instead, they are building thousands of acres of ponds to grow carefully cultivated strains of algae, and producing more biofuel (and other high-value products such as cosmetics and pharmaceuticals) at a lower cost than was possible before.

"This will turn out to be the corn of the algae world," says Dr. Bertrand Vick, chief scientific officer for Aurora Algae. The company recently broke ground on a new facility in Western Australia, where it plans to expand. The company, which recently published about its process in the Proceedings of the National Academy of Sciences, is using a unique organism, Nannochloropsis, to produce its biofuel--and more.

"It’s very difficult to produce fuel only, and it would be very difficult to do economically," says Vick. "It would take time to get to that point. You need to figure out cost and engineering." High-value products are a bridge to reach dedicated fuel production. So far, Aurora Algae has plans to start supplying food nutrients (Omega 3, currently harvested from unsustainable amounts of fish), protein shakes, and animal feeds in addition to fuel for your gas tank. All could be produced in the same ponds and extracted from the same feedstock.

California-based Sapphire Energy is pursuing a similar strategy at its 300-acre demonstration facility in New Mexico, which churns out one million gallons of oil a day. The company has teamed up with Monsanto to engineer better algae and is learning that to make algae work, it has to think like farmers and contend with variable seasons, weed species, and other challenges. Solving production and transport problems that keep costs high will be the key to expansion. If it does, the payoff will be enormous, says Sapphire, and not just because it will be replacing fossil fuels: Algae farms could earn as much as $19,000 per acre, according to the company, compared to just $400 per acre for traditional crops.

Despite the recent setbacks, and the ongoing uncertainty for algae production, the industry can claim some recent triumphs: A string of biofuel companies, like Solazyme and Amyris, have had successful IPOs, the oil giant Total is partnering to bring renewable diesel and jet fuel to a global market, and the U.S. Navy recently announced it would be buying 450,000 gallons of algae-derived biofuel this year. Now, it’s time to go big and cut costs, says Sapphire Energy president Cynthia Warner in an interview with Algae Industry Magazine.

"The great news is that all the first principles have actually been proved out, so we don’t have any lurking issue that we simply don’t know how to deal with," she said. "Now what it really is all about is scale-up, and scale-up is not a simple thing. … We know is that it is not impossible, but it’s going to take a lot of effort, and we need to be disciplined about it and not skip steps, because when you do that you risk making costly mistakes."

Aurora Algae

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