Skip to comments.Not ready for slime time: Algae present challenges as fuel source
Posted on 04/07/2013 11:37:53 AM PDT by thackney
As debate continues over raising the ethanol content in motor fuel to reduce emissions, another form of green energy is coloring the discussion.
And its not just pond scum anymore.
On Jan. 1, Congress made algae-based fuel production eligible for a $1.01-per-gallon cellulosic biofuel production federal tax credit.
Cellulosic biofuels typically are made from woody, non-food material such as grasses or wood chips, in contrast to ethanol, which competes with the food market for raw material usually corn in the United States and sugar cane in some other countries.
But algae has another big advantage that makes it attractive to energy companies: It converts the greenhouse gas carbon dioxide into oxygen, which could be significant if the Obama administrations measures against climate change make carbon emissions more expensive.
The oil companies are making a long-term bet on algae, said Will Thurmond, CEO of Emerging Markets Online, a consulting service on bioenergy.
It is carbon negative, he said. They see it as a hedge against the risk if there is a carbon tax.
Legislation in 2007 mandated that refineries include an increasing amount of cellulosic biofuels in their products, reaching 16 billion gallons by 2022.
So far, cellulosic production has been insufficient to meet the government targets. The Environmental Protection Agency, which enforces the mandate, scaled back the 2012 target from 500 million gallons to less than 13 million gallons.
The American Petroleum Institute successfully challenged the 2012 target, arguing that even the lower level exceeded total domestic production.
But the industry continues the quest for cellulosic fuel.
Exxon Mobil Corp. invested $600 million in 2009 on algae-related research, partnering with California-based Synthetic Genomics.
Four years later, company officials say that while they know how to turn algae into oil, doing so economically at commercial scale remains elusive.
It is harder than we had hoped, said Exxon Mobil Senior Vice President Michael Dolan, speaking at the IHS-CeraWeek conference earlier this year in Houston.
The big challenge is extracting enough oil from an algae cell to make its production economic.
The process is hardly new: Algae and other organisms turn into oil naturally over millions of years in geologic formations.
And the water-borne single-cell creatures grow fast, making them theoretically capable of producing 30 times more energy per acre than land crops, according to the U.S. Department of Energy.
But growing a microorganism as a commercial commodity presents daunting barriers.
You have got to manage species competitors, predators, diseases and changes in the physical environment, said Jerry Brand, a biology professor at the University of Texas at Austin and the director of the Culture Collection of Algae.
And making it in sufficient quantities is limited by the large volumes of water algae require.
You look at an aquarium or a pond and they look dense, but they are relatively dilute, Brand said, and its difficult to grow algae in higher concentration.
Some biotech companies have used sugar to help encourage faster growth, but that doesnt provide an alternative to traditional ethanol raw materials.
Using a fuel to make a fuel doesnt make a lot of sense, said Riggs Eckelberry, CEO of California-based Origin Oil, which has developed electromagnetic pulse technology that encourages algae to clump together.
You can use carbon sources like wastewater and nitrates, and maybe some waste carbon, but you cannot use foods or fuels that defeats the whole purpose.
San Antonio-based refiner Tesoro recently announced that it plans to purchase algae-derived crude oil from Sapphire Energy, a California company that said Tesoro is its first customer. Sapphire has estimated that it will reach production of 100 barrels a day by the end of 2014.
Chevron Technology Ventures has been researching algae as one of the advanced biofuels Chevron Corp. could use to meet the mandates, along with forest-based plants, agricultural byproducts and crops grown specifically for the purpose, such as switchgrass.
It is our goal to meet these mandates as cost effectively as we can, said Desmond King, president of Chevron Technology Ventures. He said Chevron looks at the cost, sustainability and whether a biofuel source can be produced at a scale sufficient to meet future demand.
In simple terms, algae is about nine dollars a gallon three times the price of wholesale gasoline, and twice the cost of other advanced biofuels, King said.
King said the big constraint is the resources needed to produce even modest amounts of cellulosic fuel.
Algae need huge areas, he said. To produce a million barrels of fuel, we need a pond the size of Lake Erie. If we want to produce a million barrels a day from forest material, we would need a forest the size of New Mexico. The big challenge for these fuels is actually the biomass.
Looking for the key, researchers have experimented with hundreds of the 100,000 or so algae strains, looking for one with the highest oil yield.
We have had a worldwide search for the perfect algae, Exxon Mobils Dolan said. The most productive strain found came from Texas, but it is not productive or resilient enough.
Companies harvesting algae already are using it for higher-value products, including cosmetics, plastics and bio-concrete building materials.
Those in the business say tax breaks are key for attracting investment from venture capitalists, angel investors and oil and gas companies.
And thats where the new tax credit eligibility comes in.
There has been a huge push for algae to get a tax credit, so that these companies can get their fuels to the market more quickly and get more confidence from investors, said Thurmond of Emerging Markets Online. It gives a lot of the existing companies more oxygen and cash flow and more ability to work their way down that cost curve.
But any tax breaks are tied to production, not research, so it still could be years before any producers actually claim significant algae-related tax breaks, said Michael Webber, deputy director of the Energy Institute at the University of Texas at Austin.
Algae is still about 40 years away as a viable biofuel, he said. Its pseudo-mature.
It seems to me it would cut the cost of an electric car, as the battery size could be drastically reduced. It would need batteries, but only for times when it was not driving on an electrified road. This puts the costs out of the car, and into the generating plants and transmission lines. I believe those are more efficient than automobile efficiencies, either gasoline or current electric. It would increase the cost of building roads, but the actual coils added to the roads appear to be pretty low tech. I haven't seen any study on all costs of driving in this model vs. gasoline, but so far it seems more feasible than other technologies.
You would first have to replace every major road before you could eliminate the batteries.
My tax dollars better never be thrown away this way.
Road surfaces are continuously being replaced and maintained already. What the roads seem to require are simple metal coils connected to the electric grid, not complex technology.
We are in a domestic oil boom, but naturally that will not last forever. It took 35 years to build the original designated interstate highway system. Given the maintenance of that, it could take 40 years or so to lay these coils down. By the time our oil and gas boom starts declining, we will have something to replace it.
Just like Socialism/Communism has never worked to the benefit of mankind without tyranny driving it down people's throat at a cost to freedom that hurts everyone, so too does the propositions that preventive stuff is affordable, that alternative energy is affordable and that alternative medicine will advance longevity better than better living through chemistry!!!