Algae oil; technology and investment

Republicans were cheering "drill, baby, drill" all summer long, hoping to convince Americans that the opening of offshore oil leases would impact gasoline supply and pricing in less than ten years.  In the meantime, there continues to be exciting research into a technology that provides some real promise of an American solution; biofuels derived from algae.

I've written about what I referred to as Oil 2.0 a number of times here.  Big feature articles appear this month in Men's Journal and Esquire.  There are now a number of well funded startups who have already made a viable product and recently signed big development deals with major oil companies.  And these companies are projecting the technology will become increasingly available over the next several years.  In June, amid all the loud "drill, baby, drill" cheering, I wrote:

Count me as a believer in the power of innovation.  The ultimate solution to our oil habit is not with drilling any and everywhere.   It's smart people thinking outside the box, developing innovations like Volt automobiles and Oil 2.0.

The basics of deriving oil from algae is fairly well known.  Algae stores energy for its metabolic processes in the form of fatty lipids (or oil) that is extracted and refined into fuel.  Where each of the companies doing development differ is in the process of farming the algae and these methods form the basis of their intellectual property.

The Esquire article highlighted four methods for raising the algae:

  -  Open ponds.  Cheap and fast, but with risk of contamination and weather effects.  HR Biopetroleum mitigates the risks by growing the algae first in a sterile enviroment and transferring it to the open ponds.  Shell Oil partnered with HR Biopetroleum last December as is building a pilot manufacturing facility in Hawaii.   HRBP believes it can have a commercial facility manufacturing a million gallons a year by 2011.  Other companies doing work in this arena are Aurora Biofuels, GreenFuel Technologies and PetroSun.

  -  Dark fermentation.  The algae is raised in the dark and allowed to feed on input biomass rather than sunlight.  As a result, the conversion time to manufacture the lipids is reduced from weeks to days.  Solazyme is a proponent of this approach, and has signed a development contract with Chevron.  Solazyme as already manufactured a diesel fuel that is equivalent to crude oil based diesel fuel.

  -  Hanging gardens.  Valcent uses this technique; using greenhouses to take advantage of the photosynthesis process and not subject the algae to the risks of contamination faced in the open ponds approach.  While the process is more expensive than open ponds, Valcent believes it can maximize yield more efficiently and result in a self sustaining, quickly growing system.

  -  Synthetic algae.  The lipids produced by algae lends itself to diesel fuel production.  Sapphire Energy has developed technology to genetically modify the algae to produce longer carbon chains, facillitating the refining to gasoline.  Sapphire also claims it's gasoline product is carbon neutral.  Sapphire is one of the best funded of the algae startups, having raised more than a $100M (including a large investment from Bill Gates).

Exciting stuff.  There's, obviously, no guarantee this algae from oil thing will be the panacea, the end all solution to carbon spewing imported oil.  But the technology obviously has the interest of Big Oil and, with luck, form a component of an energy strategy that makes "drill, baby, drill" just election year hyperbole.

I sure do wish these guys success.

Comments

[small cap energy stocks]

Hi,

Until a more economically viable technology comes along for producing and processing algae into fuels - we are a long, long way from using it in any practical way for fuels. If you think differently, you haven't noticed that none of the algae oil development press releases include any details regarding costs and market pricing - and you haven't personally examined the technologies available adequately.
small cap energy stocks

[Pest control las Vegas]

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[Jay McDonough]

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