Interesting to see how algae biodiesel is beginning to get "slick" with their marketing (see the photo). But hype, unfortunately, is what it'll take for folks to sit up and take notice. Article here. 

The next big thing in energy: Pond scum?

GreenFuel Technologies is betting that algae will save the planet - and make the company filthy rich.

(Fortune Magazine) -- Sandwiched between two nondescript commercial buildings in a vacant lot squats what looks like a long, plastic-shrouded greenhouse. Hanging nearby is a cluster of five-foot-long plastic sacks bulging with green slime that resemble intravenous drip bags for the Jolly Green Giant. It doesn't look like groundbreaking technology, but these scum bags in Cambridge, Mass., just might help save the planet.

That, at any rate, is what Isaac Berzin, founder and chief science advisor at GreenFuel Technologies, wants to do. The curious setup is an experimental bioreactor that takes the stuff of pond scum - algae - grows it like mad, and turns it into "biomass" that can be processed into fuel for cars and trucks. Even better, the GreenFuel system could help to clean up coal too.

The idea is that a coal plant's CO2 emissions, rich food for algae, could be piped into the GreenFuel system, inducing the algae to grow. Since the algae are essentially eating the coal emissions, there would be no need to capture and store the CO2. The process answers the "trillion-dollar question that led to the founding of GreenFuel," says acting CEO Robert Metcalfe. To wit: "Why expensively sequester CO2 when it can be profitably recycled?"

That's a leading question, of course, and it glosses over major challenges. Capturing all of a coal-fired power plant's CO2 emissions would require a series of GreenFuel bioreactors covering hundreds, or even thousands, of acres. In densely populated areas, that could be a killer. And the process hasn't yet been proven technically feasible on a large scale, much less profitable.

Still, Metcalfe's question captures why scum is getting love in energy circles these days. Unlike other biofuels, algae can grow in arid places using polluted or salty water - no need to use up scarce arable land and fresh water. A 2004 analysis at the University of New Hampshire concluded that all the transportation fuels in the United States could be supplied by algae grown on less than 30 million acres of desert - an area equal to about 3% of the U.S. land devoted to farming crops and grazing for animals.

Because algae can grow so fast, such farms are expected to yield much more energy per acre than other biofuels. "If algae are shown to be a cost-effective way" to reduce carbon footprints, notes Berzin, "the power industry will become a gorilla pushing algae forward." That's not likely: GreenFuel's main research collaborators so far are electric utilities.

Existing biofuels are primarily made from food crops, such as corn and soybeans. U.S. production of corn ethanol, buoyed by federal subsidies, has soared from 1.6 billion gallons in 2000 to 6.5 billion last year. Its explosive growth has demonstrated biofuels' gusher potential. Of course, given recent oil prices, they may well be the locus of the next bubble, and there is clearly a backlash brewing. But biofuels that are not derived from food crops, such as cellulosic ethanol made from switchgrass, could be a major new source of transportation fuel. Think, said a McKinsey analyst last year, of its reaching Saudi-oilfield proportions by 2020.

In a move that galvanized biofuels entrepreneurs, the federal Defense Advanced Research Projects Agency (DARPA) in November launched a major research program to enable the cost-competitive production of military jet fuel from both cellulosic and algal feedstocks. The director of the program, Douglas Kirkpatrick, says he thinks major questions about algal fuels' technical feasibility will be answered in "the next three to five years."

That sounds about right: Algae-energy research is bubbling with new ideas and talent and is beginning to get backing from venture capital. "In the past the money in this area went only to academics," says Matt Caspari, CEO of Aurora BioFuels in Alameda, Calif. "Now it's reaching entrepreneurs who are applying technologies that didn't exist ten or 15 years ago."

Two-year-old Aurora is developing biodiesel from oil-rich algae cultivated in labs at the University of California at Berkeley. Solazyme, a South San Francisco biotech, is working to develop algae that produce more gallons of biodiesel per acre. And several players, including Kent SeaTech (San Diego), A2BE Carbon Capture (Boulder), and LiveFuels (Menlo Park, Calif.), plan to combine aquaculture with algae farms.

Of course, there are always entrepreneurs poking into odd corners; what's changed recently is that fuel from algae has proved credible enough that big business is also getting intrigued. Last fall Chevron formed a partnership with federal researchers to study algal fuels. In December, Royal Dutch Shell (RDSA) announced that it will build a pilot algae-growing facility in Hawaii with Honolulu-based HR BioPetroleum. A Honeywell (HON, Fortune 500) unit has developed technology to process algal oil into jet fuel. Boeing (BA, Fortune 500) and Raytheon (RTN, Fortune 500) are also investigating algal fuels.

The idea of using algae for energy is hardly new. Beginning in the late 1970s, scientists at what is now the National Renewable Energy Laboratory, or NREL, in Golden, Colo., spent 17 years investigating the possibilities. In 1995 they gave up, concluding that algae-derived biodiesel fuel would cost too much. The program was terminated in 1996. So algal fuel seemed a lost cause when Berzin, then a postdoctoral researcher at MIT, ran across the NREL team's final report. An expert on cell-culturing systems, he couldn't resist tinkering with novel bioreactors to grow algae. Before long, he was hooked; in 2001, a year that gas prices topped out at $1.66 a gallon, he launched GreenFuel.

Which raises an issue of great complexity and consequence: Was he nuts?

You can't look very far into this question without running into a curiously strident set of GreenFuel bashers. Flailing away in blogs and other forums, they argue that its strategy doesn't even make enough sense to qualify as hubris.

"It's bizarre, it's totally absurd," insists John Benemann, a biofuels consultant who worked on the NREL algal fuels project. To understand Benemann's view, as well as his vehemence, it helps to know that his team at NREL rejected bioreactors like GreenFuel's on the grounds they would be too expensive. The NREL researchers endorsed the use of open-air ponds, which is what almost all commercial growers of edible algae, such as Spirulina, use.

Berzin dismisses this conclusion. Growing algae in ponds, he argues, is limited because algae are less productive in the cold. Water must be continually replenished in the heat, and in the open, special oil-rich algae for fuel are susceptible to replacement by hardier, indigenous scum. In short, argues Berzin, while ponds may work in some places, bioreactors should work in many more.

That logic failed to wow potential investors during GreenFuel's early years. "We kissed a lot of frogs," says Holly Flesh, vice president of business operations and a co-founder. In 2004, GreenFuel found a prince, Access Industries, a New York investment firm that gave it $2.1 million in seed capital. Berzin, a brash, buoyant spinner of ideas, went right to work, installing a bioreactor on an MIT rooftop that became a big, green media magnet. Stories noted that the system captured up to 82% of the CO2 in flue gases from an MIT power plant fired by natural gas.

By mid-2006, GreenFuel had hired energy-industry veteran Cary Bullock as CEO, installed pilot projects at two utilities' power plants, and secured $17.8 million in venture capital. In November 2006, GreenFuel announced that it had recycled CO2 emissions at Arizona Public Service's Redhawk power plant into algal biomass for making both ethanol and biodiesel - a first.

In early 2007, GreenFuel installed a bioreactor at the same plant that was 100 times larger than its earlier test models. That bioreactor was meant to launch GreenFuel toward huge commercial systems. Instead, in an episode reminiscent of "The Sorcerer's Apprentice," it nearly cratered the company.

The system worked amazingly well at first, growing algae in the Arizona sun much faster than anticipated. "We thought, Oh, yeah!" says Berzin. "But immediately after, we thought, Oh, no!" The algae were growing faster than GreenFuel's team could harvest them. The overabundant algae clogged the system and began dying, forcing the team to shut down the bioreactor.

While fixable, the setback was a major blow, and not the only one. A few months before, GreenFuel had won a major contract to supply its technology to a biofuels developer in South Africa, but the company could not keep its promises and ceased operations in a swirl of fiscal controversy. Running low on cash, GreenFuel had hoped to win another round of venture funding in mid-2007 by showing that its Arizona scale-up was on track. Clearly it wasn't. Worse, during the week of the Arizona debacle an outside consultant reported GreenFuel's projected harvesting system would cost more than twice as much as expected. The bashers were beaming.

At a tense board meeting in June 2007, CEO Bullock told GreenFuel's main backers of the problems. In short order they cut about half of GreenFuel's 50-person staff and installed Metcalfe, a director, as acting CEO. Existing investors agreed to grant a $5.5 million bridge loan to keep the company going. Bullock stayed on as the marketing chief, racking up letters of intent for several major deals.

Meanwhile, Metcalfe reorganized the startup's technical side to improve productivity and ensure rigorous vetting of new designs. His leadership gives GreenFuel instant credibility. While many biofuels players are led by visionaries who dream of changing the world, Metcalfe has already been there and done that. Known as "the king of connectivity," he co-invented the Ethernet, a key enabler of computer networking, in the 1970s. He then went on to found networking pioneer 3Com and to win the National Medal of Technology, the nation's top honor for technical innovation. Under his steadying hand, GreenFuel has developed a new bioreactor- the one in Cambridge- that is simpler and cheaper than its predecessors.

Metcalfe says the company has now completed five of seven goals he set for its recovery. The remaining two, hiring a new CEO and securing a third venture-capital round, are on track. The company is negotiating deals that could provide funding to scale up several algae-growing systems to commercial size within a few years.

Has GreenFuel finally cracked the algae code? That, of course, remains to be seen. But the economics are making it look less like science fiction and more like a business in the making. With diesel costing nearly $4 a gallon- a third more than a year ago- the gap is shrinking between the projected costs of algal fuels and the real price of the fossil kind. Another few years at this rate and algal-fuel developers will no longer be worrying about making their products cost-competitive but about expanding fast enough to meet demand.

In reading the "top ten green section" when Fortune came out last week I found each article painted a promising future for the greening of industry. The demand for that quirky $30,000 hybrid commuter car and ocean fish farming article were great too. Let's just hope we don't spend the next 30 years waiting for green industries to become profitable. (remember the 1970 energy crisis and environmental movement?)

Great article, there is a lot more going on in the Algae scene, in the link below you will be able to find just a sample of some additional companies involved in Alga-2-Biofuel. I welcome any feed-back to this information. Eventually I plan to produce a full Algae Technology summary for investors and potential business partners. Please feel free to contact me at per.dahlen@aumbiz.sg for more information. Thanks.

http://seacleantech.blogspot.com/2008/04/algae-summary.html

 

Per

 

"We kissed a lot of frogs," says Holly Flesh, vice president of business operations and a co-founder. In 2004, .... that gave it $2.1 million in .....projects at two utilities' power plants, and secured $17.8 million in venture capital. In November 2006... plus 5.5 million = OVER 25 MILLION ....Who manages this place and where is the great technology for 25 MILLION? Show me the technology or at least the algae.  In Texas, we do it for a lot less than this: Invest in Petro Sun or Livefuels we do it domestically.