BioDieselNow - Renewable biodiesel fuel

Hi,

 
I just joined this forum because I am doing extensive research into algae being grown for biodiesel production this summer. I have been looking over companies involved in many areas of the trade, including GreenFuel Tech, Victor Smorgon Group, Solazyme, Solix Biofuels, GlobalGreen / Valcent, Greenshift - GS CleanTech, Aurora, General Atomics / CEHMM, Aquaflow, Petrosun, LiveFuels Inc., etc...

 From all of these companies I have had the most challenge in finding actual numbers, figures, design schematics and financial information about their technology. Of what I have found I am now questioning whether it is worth including in my research... I have been reading over a lot of the threads and am realizing that a lot of the numbers I have found with these companies could be inflated values that are not possible in reality. The Krassen Dimitrov PhD. paper was a great read since I had before been assuming GreenFuel was the company to be the first to commercialize, not really anymore...

 I am wondering of the companies that exist, is it possible to take any of their numbers or figures as anything close to even a reliable estimate, or am I trying to go upstream without a paddle in looking for reliable data to report on? I want to be able to answer the question, at this point in the technology market, if I had $1 million, where would I want to put that money as an investment? Is any company really promising enough for consideration? Or would it be better to wait and see in the whole department?

Pete

 

You raise good questions, so here are a few things to think about.  First of all, growing algae to produce biofuel is not a new concept.  The first reported attempt at sequestering carbon by pumping power plant flue gas through an algae pond was in the 1950s at MIT.  The Department of Energy’s Aquatic Species program ran from 1978 to 1996.  If scientists have been working in this area on and off for 50 years, and if making biofuel inexpensively from algae was easy, it would have been commercialized a long time ago.  Commercializing algal biofuels therefore requires a high level of scientific achievement in a number of disciplines in order to succeed, such as phycology, materials science, genetics, and chemical engineering to name a few.  That does not mean it will not happen- but it means that success is only going to occur for a company that employs talented scientists who are experienced at each of the components involved in the process.  In addition, breaking into a market dominated by the world’s most profitable corporations - oil companies - is a real challenge as well.  Therefore, serious business talent is another component requirement for success.  So to help you narrow down the field of algal biofuel companies to the ones most likely to succeed, which seems to be your main line of inquiry, here is one major piece of advice.

Publicly traded over the counter (OTC)/pink-sheet penny stock algae biofuel companies are a scam.  They don’t have even a fraction of the necessary components for success.  Look at any of the publicly traded algal biofuel companies that have sprung up like weeds.  Most of these companies do not even list the members of their management team on their websites- in fact, many of them are not even real companies.  Some of them are mentioned in the fake stock tip spam emails that clutter your Inbox.  The press releases put out by these companies are absurd.  For example:

http://www.xltg.com/html/news/archive/120207.asp

Further, much larger scale, production facilities, in excess of 10,000 acres, are expected to be in planning by the end of 2007, and in production soon after. [are expected to be in planning- that means nothing.  I’m expecting to be planning my 50^th birthday party at the Playboy mansion, but does that mean it will happen?]

http://www.greenstarusa.com/news/07-07-09.html

Phase II testing included pushing the survival environmental envelope of the developed algae strain (zx-13) utilized by GSPI.  [To develop a novel biodiesel algae strain it takes either a very talented phycologist to isolate a lipid-producing strain out of the wild, or the ability to genetically engineer a known strain into a novel strain.  This is coming from a company that does not name a single employee on its website, much less a respected scientist.  zx-13 is nothing more than a name this company came up with to try and sound high-tech.  If they are actually growing any algae (doubtful) it is a strain that anyone can buy from a public strain collection.]

 
Consider, by contrast, a real company in this space- Greenfuel.  Greenfuel has raised over $20 million.  A high percentage of that was spent on R&D.  The company has hired respected scientists with real experience in relevant disciplines.  It is backed by venture capitalists who have successfully built companies in the past.  And yet it faltered in a huge way a few weeks ago, acknowledging that its technology so far has failed, laying off half of its employees, and making it known that the company is out of money (and therefore will be hugely diluting all of its investors and remaining employees by doing a down round to keep the company afloat).  If a company with all of that going for it faltered in such a big way, the notion that an OTC traded scam is going to give you a return on your investment is laughable.  The only Product a company like Green Star Products will ever sell is its stock, so you are tossing your money in the garbage if you invest in them or any of their brethren. 

 
That pretty much leaves the venture backed companies.  I would look at two things to try to sort them out.  First, look at the management teams, board members, and senior level scientists.  Second, when it comes to analyzing them, forget about everything except what are incontrovertible facts about them- how much money have they raised, who have they done deals with, things that cannot be fudged or hyped.  Ignore numbers that are acknowledged to be theoretical (“X thousand gallons per acre are possible, etc.”).  I can’t tell you which of those companies is going to succeed because no one knows. 

Hey Peterson,

 Thanks very much for the quick reply. I greatly appreciate your insight and I'm glad to have read a few of your comments on other threads in the past. Yeah, I originally had GreenStar as one of the companies I was researching but after seeing them cast as a fraud I was stunned. Made me rethink each and every company I was looking at. I see that my focus should indeed be on their venture capitalists, their employees, and their partnerships.


I recently received my undergrad degree in chemical engineering and have one more year before I complete my undergrad degree in biology; so I'm looking into interesting areas to focus my career. I am still new to this field so forgive me in advance if I ask some dumb questions. This question that is sort of unrelated to the last one, but of these companies that are refining laboratory test tubes or liters of algal oil, are these companies planning on making the biodiesel themselves or are most of the companies planning to sell and ship the crude algal oil to established refiners? Would it significantly lower the overall cost of the final product to give the crude algal oil to an established refiner instead of GreenFuel, Solazyme etc. trying to harvest and refine the oil themselves?

Also, looking at established open-pool companies like Earthrise and Cyanotech, which dont produce non-biofuel algae in their raceways, are there any white-papers at all remarking on their yields, efficiency, anything that talks about how well their algae thrive in their gigantic facilites? I keep thinking that those companies should be the blueprints for how to make an algal oil facility. The open raceway system seems to be successful enough for Earthrise and Cyanotech at least in terms of yield and return, would it not be so for algal oil?

Pete 

peterson2:

You raise good questions, so here are a few things to think about.  First of all, growing algae to produce biofuel is not a new concept.  The first reported attempt at sequestering carbon by pumping power plant flue gas through an algae pond was in the 1950s at MIT.  The Department of Energy’s Aquatic Species program ran from 1978 to 1996.  If scientists have been working in this area on and off for 50 years, and if making biofuel inexpensively from algae was easy, it would have been commercialized a long time ago.  Commercializing algal biofuels therefore requires a high level of scientific achievement in a number of disciplines in order to succeed, such as phycology, materials science, genetics, and chemical engineering to name a few.  That does not mean it will not happen- but it means that success is only going to occur for a company that employs talented scientists who are experienced at each of the components involved in the process.  In addition, breaking into a market dominated by the world’s most profitable corporations - oil companies - is a real challenge as well.  Therefore, serious business talent is another component requirement for success.  So to help you narrow down the field of algal biofuel companies to the ones most likely to succeed, which seems to be your main line of inquiry, here is one major piece of advice.

Picking up on that note, what is the verdict on Solix ? (They have been claiming from the very beginning to have realized Greenfuel's design errors."Needs too much energy for too little volume").

HI, i'm new here too. I am from Kosovo (Ballkans, Europe) and i just finished the facullty of Business Administration-Marketing, and i start digging for new ideas in business start up. I started with alternative fuels reading materials on the web, and i felt my self very exciting because imaging my self being e (bio)petrol producer :), but later when i started to dig more and more, i created a picture that the things which were on official web sites of companies which offer the BioDiesel production, actually does not fulfill all the the demands of being a successful producer. The algae cultivation and using it as crude oil was something like the big light in tunnel, but something still "smells wrong" in algae bioreactors. I've read a lot about the companies which now offer their technology for commercial mass-cultivation of algae species required for best biodiesel production. The BioKing company based in Netherlands offer this technology, but i still am bit confused with their offers, or maybe that can be explained because i am very new on this kind business.

The prices of BioKing for algae production goes like this:

Complete automated turnkey photo-bioreactor with production capacity of 1 ton dry biomass per day: 480 000 euros

Complete automated turnkey photo-bioreactor with production capacity of 25 tons dry biomass per day:  4 million euros

Complete automated turnkey photo-bioreactor with production capacity of 50 tons dry biomass per day: 6 million euros

Complete automated turnkey photo-bioreactor with production capacity of 100 tons dry biomass per day:  10 million euros

I would appreciate if someone explain me;  for example 50 tons of dry biomass, does this mean that this is same as saying 50 tons of feedstock (ready for production)?

I feel nice being now part this forum.

M.,

In your marketing course, did they explain vaporware?

Bioking has a lab scale processor.  They have built a pilot plant.

They may not have built any of the others.  Some people have questioned whether the reactors can be built and operated.

Even those algaes that produce a lot of oil, will often produce only 20% oil.  So 50 tons = 10 tons of oil.

It may not be necessary to dry the algae - it is quoted on a dry basis to have a repeatable standard of measure. 

Pete,

You are correct that it would be helpful to have info from Earthrise and Cyanotech, but I have heard that Earthrise is extemely paranoid about disclosing thier techniques. 

Pete,

Those are not dumb questions at all.  Essentially you are asking whether any companies that are actually making algal oil (how many are there really?) are planning on transesterifying the oil themselves to make biodiesel or just selling oil feedstock to biodiesel producers.  I have not read anything that indicates which route any company is planning on taking, so unless there is information out there I haven’t seen, I don’t think we know the answer.  There is nothing wrong with a company taking either route- the question is whether a company executes well on whichever business strategy it chooses.  If it chooses to go the whole distance and sell biodiesel, it would need to invest in the know-how and capital equipment to make biodiesel effectively in addition to investing in what is required to produce the algal oil.  That might cost more initially, but might also be the most profitable route in the long run.  

As for Cyanotech and Earthrise, I agree with Bobby- those companies are probably not going to divulge their yields.  If nothing else though, you can assume that their algae do thrive in their gigantic facilities or the companies would go out of business. 

And as for the verdict on Solix, I think it’s too early to tell.  The only verdict that is really in already is the fact that the penny stock algae biofuel companies are frauds.  There was a recent story on Solix in Popular Science you can read here:

http://www.popsci.com/popsci/science/ee6d4d4329703110vgnvcm1000004eecbccdrcrd.html

There are a few incontrovertible facts you can get from the article.  One is that they had their own management shakeup that resulted in the founder and CEO getting tossed out.  Another is that they have not made any algal oil.  It seems from the article that they are revamping their photobioreactor design.  

IMHO I've become quite skeptical about the viability of algae to biodiesel, based on the same facts that were given here, as well as other sources that seriously looked at the costs from a practical standpoint. Sure, the companies growing algae for health food supplements ie. Earthrise or whatever grow algae successfully, but you see their operating costs, and they are WAY above the costs needed for practical fuel production.

I'll remain skeptical about it until I see something in the real world. Not saying it's impossible just I have no reason to be excited about it myself. I'm not one to jump the gun and call something a surefire solution until it's well proven in the real world not on paper.

peterson2:

And as for the verdict on Solix, I think it’s too early to tell.  The only verdict that is really in already is the fact that the penny stock algae biofuel companies are frauds.  There was a recent story on Solix in Popular Science you can read here:

 http://www.popsci.com/popsci/science/ee6d4d4329703110vgnvcm1000004eecbccdrcrd.html

 There are a few incontrovertible facts you can get from the article.  One is that they had their own management shakeup that resulted in the founder and CEO getting tossed out.  Another is that they have not made any algal oil.  It seems from the article that they are revamping their photobioreactor design.  

 Hey thanks for the article, Pete!

Here's an interesting quote from it: "Later this year, Solix will test a new prototype design that will not include rollers—which pose the risk of wearing out the plastic bags—to agitate the algae; instead, bubbles percolating through the green slurry will ensure that the mixture is sufficiently stirred. Additionally, new multitiered, triangle-shaped compartments inside the bags will reflect the sun’s rays, illuminate the algae from multiple directions, and, ideally, bump up fuel yields."
 

Anyone having any idea what that actually means?? 

Hey,

peterson, liberty1, thank you for your replies and insight. It has been really helpful for me. I have found in my searches of companies that it appears that Aquaflow Bionomics in New Zealand is apparently the only company right now at commercial scale, anyone seen any articles to corroborate that claim? Most of the companies I've seen like GreenFuel, Solix, and Global Green are either just in their Pilot stage or in the process of constructing their pilot scale plants.

Also, Petrosun says that they are going to give a demonstration of their pilot scale technology some time next month (august). I haven't heard much information on what they are constructing but I am hoping that there will be good press coverage of what is shown there. Anyone seen any articles on Petrosun's Biorenewable plans yet, or will it be best to wait and see when they display in august?
 

snowplusbrd:

"...........................it appears that Aquaflow Bionomics in New Zealand is apparently the only company right now at commercial scale, anyone seen any articles to corroborate that claim? Most of the companies I've seen like GreenFuel, Solix, and Global Green are either just in their Pilot stage or in the process of constructing their pilot scale plants."

 

 Hey Snowy! In my searches I found that Aquaflow is not really growing algae, but it is harvesting already available algae, from public water bodies and sewage, in the process raking moolah for clearing them up, and subsequently also for getting fuel out the muck. This goes to show that they are currently the among the smartest people in business, as they are at least making some money (remember, some money is better than no money!), while they are still free to carry on with their own research for a high growth system. That said, I deem it fit to point out two things : Are they in their current form of business, worth calling Algae based biodiesel companies (where they do not even produce their own algae!)?? And secondly, can anybody realistically hope to survive in algae biodiesel business for long without their own biomass system? They did go for funding around Dec 2006, and I am guessing that calling themselves algae biodiesel companies mustav been of great help.......

 It seems to me that Aquaflow is a very smart water treatment company today. Maybe, it will someday be an actual biodiesel company. This means that they stand exactly where people like Solix and Greenfuel stand, except the latter are at least openly attempting to make their own biomass.

 

I can tell you that Aquaflow are still some months away from producing viable quantities of biodiesel.

 Like you guys I was seeking clarrification of how much algae was being produced and I emailed Aquaflow and had a response the same day, acknowledging that they had made BD from algae but were working on the scale up still.

 I also emailed Greenfuels, Solix and Bio King and got no response.

BioKing are ripping people off with the prices they are charging for their reactors.

Greenfuels sold several of their design reactors to DeBeers in South Africa and DeBeers are now buying into farms to provide oil seed feed stock so thay can try and recover their outlay.

I am a one man band, working alone on a design for a PBR that I have high hopes for but will not be able to report on production levels until I get it running - pretty close now. I know that I can grow algae in a PBR, I know I can manipulate the volume of lipids the algae produce, I know some algae produce huge amounts of carotenes. What I do not yet know is exactly how much my test bed will produce.

I guess that is a common thread at the moment.

 I have faith in the final outcome and viablity of algae for BD but, as I have said in this forum before, there is still a huge amount of research to be done.

Aquaflow sounds interesting, but I agree that skimming algae from ponds is not a sustainable way to make biodiesel, even though it is clever.  Nothing suggests they are anywhere close to commercial scale.  If they are responding to email and acknowledging their current (noncommercial scale) status, it sounds like the people behind the company are actually honest.

Petrosun on the other hand, is another penny stock scam looking for suckers.  Their PR stunt coming up will not amount to anything but smoke and mirrors- why else would they require anyone attending to sign a secrecy agreement to attend what is being billed as a public demonstration?  Before getting too excited about Petrosun you should take a look at this: 

http://www.insidegreentech.com/node/995

Also, while Greenfuel is a real company that did business with De Beers, it is now official that De Beers is and always was outright investor fraud:

http://biopact.com/2007/06/south-african-algae-biofuels-company.html

I keep getting weirded out by these companies that are being look upon like they are scams. Until they are publicly proven to be such, isn't it just hearsay and accusations without real proof that they are not all they say they are. In a business sense, companies run the risk of libel for any unsubstantiated claims they make about other companies.

Basically I'm just asking, when can you make the jump to accusing a company of being fraudulent? Where do they cross the line? I mean, a company can induce hype with their press releases, but dont all companies do that? And in the algae industry it just seems more so since it hasn't been extensively researched yet and claims are mostly from theoretical results... you cant say a business's claim on what is possible helps to label them suspicious, their claims are possible in theory.

I'm not saying speculation is bad at all, trust me, I just want to be able to draw the line between what is a suspected fraud and what is in fact a fraud.

I want to 2nd snowplus.

Some companies go to the well of public money to fund  their ideas. This doesnt mean they are frauds...it means that they are looking for intestors in an unproven technology that may or maynot work. There is a difference between pump and dump stock frauds and untested technology looking for research $.

froggy:

I want to 2nd snowplus.

Some companies go to the well of public money to fund  their ideas. This doesnt mean they are frauds...it means that they are looking for intestors in an unproven technology that may or maynot work. There is a difference between pump and dump stock frauds and untested technology looking for research $.

 I am in absolute agreement with froggy on that point. What 'grinds my gears' is that there are still a few failed companies, which are not honest about their attempts. Honest failures get the closest anyone can get to a win-win in such a situation. They get new perspectives on their own failure from people, while people themselves learn another way of how not to proceed. (Edison: I know ten thousand ways of how NOT to make a bulb!). A pump and dump scam usually tries to cover up, whereas others are pretty open about it.

Note: has greenfuel been open and honest, or has it's secret been bared otherwise?

Anyways, it seems increasingly clear that NOBODY is really anywhere close of getting 'someplace' in terms of either biomass yields and/or extraction of oil from the same, for the next two years at least. 

I see that the algal biodiesel bubble is slowly begining to burst. I've anticipated this for a while. 

There is massive potential in the algal field, but at the moment several of these bad apples are creating a negative vibe in the investment market. I firmly believe that algae and it's cultivation is here to stay and will be part of our future, it just needs the right type of people to push it forward. Edison did not get rich quick...which is the only reason the above companies are involved.

 But here is the million dollar question. I could name at least 5 commercial algal farms [all non-biodiesel]. Why don't you hear anything from them regarding foray's into the algae to biodiesel field? Surely they must have the expertise?

Picking out scams isn't an exact science, it's an art. You have to be intuitive and know how to make connections and understand the subtleties of language distinguish between a legit but slightly optimistic press relase vs an outright scam.

It also helps if you know a little bit about the real world limitations of the existing legit technology, and see if theirs is way out of touch with those limits.

example: claims of millions of gallons per acre, inventing a time machine in his garage, more energy out than was put in, eternal life elixir, -400C cloud point biofuel, etc. 1000000MW plants with $1,000,000,000 in upcoming contracts... those are hints, but it's still not a science.

They choose an industry that's hot in the news right now and then pop up suddenly claim to solve all the problems in that industry instantly without any downsides. They take the problems with current products, then give exaggerated claims that they solve those problems.

I.E. if cloud point is a problem...... our fuel will work at minus one million degrees! If yield is a problem, no problem ours yields 50,000 gallons per acre. If cost is a problem... we can produce ours at 10 cents per gallon!

Lots of exclamation marks, emphasis on displaying contracts with other companies and letters of endorsement rather than the technology itself, using them like trophies while ignoring the important information that a reasonable person would ask. 

If emissions are a problem... this fuel cleans the air when run in an engine, and look I can breathe the exhaust! Well, you get the idea.