Gas costs are soaring, but adopting cheaper ethanol is sending food costs into the stratosphere as well. What is the answer to this troubling predicament? Some say the solution is old -- very old. There is growing hope that one of the planet's most ancient organisms, algae, can be used to produce economically viable biofuel without the negative societal impact of ethanol.
While corn and sugar crops are blamed for deforestation, fertilizer runoff, and societal damage, algae promises to possibly provide a better solution. Melbourne, Fla. based PetroAlgae is looking to test a commercial algae biofuel solution next year. The company uses strains of the tiny organism developed by researchers at Arizona State University. They are developing harvesting methods and bioreactors to take full advantage of the new fuel source, and allow it to be affordably mass produced.
Fred Tennant, PetroAlgae's vice president of business development, is among the leaders in the endeavor. He is overseeing the development of a process in which algae is harvested from fresh-water ponds and then converted to oil and refined to biodiesel. The byproducts are equally valuable, and can be used as a protein rich animal feed.
The plant may be able to strike deals with electricity utilities too, as the algae consume CO2, earning carbon credits. Says Tennant, "The laws that are being debated right now will change a power company's life. They will have to have a lot more renewable energy and get rid of CO2. Any power company in the world will be happy to pay us to take their CO2 away."
Other companies are also blazing ahead in the hot algae-based fuel market. GreenFuels Technologies is on the verge of closing a major European commercial biofuel deal, after working on a multi-year project with the Arizona Public Service department. Solayzme is working to develop fermentation based algae fuel production as an alternate method to photosynthesis driven approaches. LiveFuels hopes to using its genetically engineered algae to produce 100 million gallons of fuel by 2010.
Why is algae so promising? First it’s fast-growing. Secondly, it removes carbon dioxide from the air. Finally, it's a non-food crop and will have less impact on food prices. Algae has more energy density than soybeans, a typical high-energy land crop. This means less surface area will be needed to produce the fuel as well.
Michael Weaver, the CEO and co-founder of Seattle-area algae start-up Bionavitas states, "What's happening is there has been more focus recently on the food-versus-fuel debate, more focus on the price of feedstock, and more understanding that using an agricultural-based crop as a fuel is not sustainable. We're seeing that reflected in the marketplace."
While algae is more energy rich than other biofuel alternatives such as wood chips, grasses, or agricultural waste, the biggest obstacle is that growing it is not cheap. Tennant from PetroAlgae states, "Anybody can grow algae if cost is no object. Lots of algae companies have done a great job, but the system doesn't look like a massively scalable system."
PetroAlgae says geography is extremely important. Sunny hot places speed up the drying process, a lengthy production step, given that algae is 98 percent water. Ideally the plants would be located on 1 to 10 acre carbon generating locations, such as power plant grounds, the company says.
Technical difficulties exist as well too. During the GreenFuel's Arizona Power pilot program it experienced the surprising problem of growing too much algae, making it too expensive to harvest. Water recycling has been another key issue. Weaver of Bionavitas says another important problem is bioreactors (typically bags or tubes) limiting light and thus hindering photosynthesis.
He states, "If you have a series of tubes or plastic bags on the desert floor or wherever, you are still limited by the amount of photons that get in from the sun to create more algae. When the algae gets slightly dense, it starts blocking its own light."
Despite the problems interest in algae production both as a food oil alternative and as a commercial gas and ethanol alternative continues to mount as research, enterprise, and capital vested grows.
quote: What about comparing the unsubsidized cost of ethanol to the unsubsidized cost of gasoline? Why does everybody ignore the fact that Big Oil receives massive tax breaks?
quote: Please get it through your head: There is no such thing as a free market. Just like physics homework problems with "frictionless surfaces". It just doesn't exist in the real world.
quote: Furthermore, the average effective tax rate on the major integrated oil and gas industry is estimated to equal 38.3 percent. This exceeds the estimated average effective tax rate of 32.3 percent for the market as a whole.