Tuesday, October 23, 2012

Green Crude: The Quest to Unlock Algae’s Energy Potential

A host of startup companies are pursuing new technologies that they claim will soon lead to large-scale commercialization of biofuels made from algae. But questions remain about the viability and environmental benefits of what its developers are calling “green crude.” by marc gunther

In ... Columbus, New Mexico ... Sapphire Energy wants to [turn] ... a 300-acre expanse of desert scrub into the world’s largest algae farm designed to produce crude oil. Sapphire began making oil there in May, and its goal is to produce about 100 barrels a day, or 1.5 million gallons a year, of oil, once construction ... is completed next year.

“We take algae, CO2, water and sunlight, and then we refine it,” says Cynthia Warner, the chief executive of Sapphire....
Sapphire is one of scores of companies worldwide that today are making biofuels from microalgae, albeit on a small scale, according to the Algae Biomass Organization, a trade group. Solazyme, which is arguably the industry leader, last year sold an algae-derived jet fuel to United Airlines, which used it to fly a Boeing 737-800 from Houston to Chicago.... Synthetic Genomics, a company founded by geneticist J. Craig Venter and financed by ExxonMobil, is building an algae farm in the Imperial Valley of southern California. Other algae farms are under development in Hawaii, by Phycal, and in Karratha, Australia, by Aurora Algae, and in Florida, by Algenol. In Europe, the Swedish energy company Vattenfall and Italy’s Enel Group have been using algae, which is then made into fuel or food, to absorb greenhouse gas emissions from power plants, and Algae-Tec, an Australia-based company, has agreed to operate an algae-based biofuel plant in Europe to supply Lufthansa with jet fuel.

Although scientists and entrepreneurs have been trying to unlock the energy potential of algae for more than three decades, they don’t yet agree on how to go about it. Some companies grow algae in ponds, others grow them in clear plastic containers, and others keep their algae away from sunlight, feeding them sugars instead. To improve the productivity of the algae, some scientists use conventional breeding and others turn to genetic engineering.
After the 1970s oil shocks, the U.S. government created an algae research program that analyzed more than 3,000 strains of the tiny organisms; the program was shut down in 1996, after the Department of Energy concluded that algal biofuels would cost too much money to compete with fossil fuels....

... Sapphire’s annual production target of 1.5 million gallons for 2014 compares to U.S. daily oil consumption of 18.8 million barrels. Even algae’s most enthusiastic advocates say that commercialization of algal biofuels, on a scale that that would matter to the environment or the energy industry, is at least five to 10 years away.
In a thorough 2010 technology assessment, researchers at the Lawrence Berkeley National Laboratory estimated that producing oil from algae grown in ponds at scale would cost between $240 and $332 a barrel, far higher than current petroleum prices.
... Government scientists say the environmental benefits of algae remain unproven. Writing in American Scientist, Philip T. Pienkos, Lieve Laurens and Andy Aden, all of the National Renewable Energy Laboratory, say that the few life-cycle assesements of algae done so far have shown “unpromising energy returns and weak greenhouse gas benefits.” By phone, Pienkos acknowledged that, in theory, algae should produce low-carbon fuels because the CO2 emitted when the fuels are burned is absorbed from the air when algae grow. But, he says, calculating the true sustainability benefits of algae requires doing a detailed study of inputs and outputs and “that will be difficult until big algae farms are built.”

Algae are easy to grow, as any owner of a background swimming pool knows.... Algae grow rapidly, reaching maturity in days. They absorb carbon dioxide, a greenhouse gas. They thrive in fresh, saline or brackish water. And they don’t compete with food crops for land. According to the National Renewable Energy Laboratory, algae yield more lipids, or oil, than other biomass feedstock — as much as 30 times more per unit of land when compared to terrestrial oilseed crops like palm and soy.

... In New Mexico ...Sapphire is trying to drive extraneous costs out of its ponds (do they need plastic liners, or will dirt do?), out of the process of removing algae and returning water to the ponds, and out of the thermo-chemical process used to separate oil from the algae. 

None of this comes cheap: Sapphire has raised $300 million from investors including venture capitalists Arch Venture Partners and Venrock, British charity The Wellcome Trust, and Cascade Investment, which manages the personal fortune of Bill Gates. The U.S. Department of Energy awarded Sapphire a $50 million grant in 2009, and the company has secured a $54.4 million loan guarantee from the U.S. Department of Agriculture.

Solazyme experimented with open-pond technology in the late 2000s before deciding to abandon the sun.... The company now grows its algae indoors, in big industrial fermenters in a factory in Peoria, Ill., and feeds them biomass such as sugarcane or corn stover. ...

... Serving a variety of markets enabled Solazyme to attract investment from the likes of Chevron, British entrepreneur Richard Branson, and Unilever, and to generate enough revenue so the company could go public last year. (Its current market value is about $650 million.) More important, Solazyme plans to grow its production capacity faster than its rivals — it says it will produce about 142 million gallons a year of renewable oil by 2015.

By far the biggest opportunity to reduce the costs of algal fuels lies within the algae. Just as crop scientists have bred corn and wheat to improve yields, with spectacular results, the algae companies are using conventional breeding and genetic modification to develop strains of algae to grow faster, yield more oil, and repel pests.

Venter’s Synthetic Genomics is going a step further, studying natural algae in order to design, from scratch, a plant of its own.  For now, Synthetic Genomes is growing algae in a greenhouse in La Jolla, Calif. The company recently acquired 81 acres of land in the California desert, near a power plant that is expected to be a source of cheap CO2. ... ExxonMobil has promised the company $300 million over the next decade, provided that its research and development milestones are met; other backers include BP and venture capital firm Draper Fisher Jurvetson.

by Marc Gunther, contributing editor at Fortune, a senior writer at Greenbiz.com and a blogger at www.marcgunther.com. His book, Suck It Up: How Capturing Carbon From the Air Can Help Solve the Climate Crisis, is available as an Amazon Kindle Single. In previous articles for Yale Environment 360, he has reported on systems being developed to remove carbon dioxide from the atmosphere and on how technology can help consumers make greener choices.
October 15, 2012

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