Algae Biofuels Have a Promising Future

by Carolyn Austin

Algae could be the most promising candidate yet for the future of the biofuels industry.

Although algae-based fuels won’t be commercially available for several years, algae offers several advantages over other first-generation renewable fuels, such as corn and soybeans. For example, algae grows faster, requires less resources, can be used as jet fuel, can use existing distribution systems, and absorbs carbon dioxide and other greenhouse gasses.

And according to the WSJ, in theory the U.S. could produce enough of it to meet all of the nation’s transportation needs.

Although developing an economically viable process for refining oil from algae faces challenges on many fronts, interest (and investment) is growing.

Major players in the emerging industry include Exxon (XOM) (working with privately held Sapphire Energy and Synthetic Genomics), BP (in a development deal with Martek Biosciences Corp (MATK)), Valero (VLO) (invested in Solix Biofuels), as well as the U.S. Military. Smaller companies include Aquatic Energy, Aurora Biofuels, PetroAlgae, and Origin Oil.

Industry experts claim that in order to speed the process along, algae biofuel feedstocks must get the same benefits and incentives that first-generation biofuel feedstocks receive.

Just recently, Senator Boxer revised the definition of biofuels in the Renewable Fuels Standards of the Clean Air Act, previously defined as “cellulose-based biofuels,” to “advanced green biofuels,” as a way to include algae as a qualifying biomass material in the Renewable Fuels Standard provisions.

All of this syncs up neatly with a White House concerned with climate change and looking to develop “green energy” technologies with long economic coattails.

While it may be too early to call algae the clear winner in the biofuels race, at least for now, the future of algae-based biofuels looks bright.

Author's Disclosure: No positions in the stocks mentioned

Comments

[redbaron]

Energy out, must be significantly more than energy in, or this won't work. Too many of these projects result in less energy output, than input, and only work with subsidies. Ethanol is an example of that concept, IMHO.

2009 Nov 13 07:08 AM

[apppro]

The issue is not the fuels but what machinery or engines can run or use those fuels efficiently! Well - Capstone Turbine makes EXTREMELY efficient micro-turbines that will run almost anything.

www.capstoneturbine.com/

I hate plugging stocks, but someone needs to pay attention to a real energy solution.

2009 Nov 13 07:19 AM

[jamup]

Another rat hole for tax payer money and political graft.

2009 Nov 13 08:10 AM

[john s. gordon]

algal oil is interesting.
can the protein byproduct of the process be used as cattle feed?
(no point in wasting anything).
any K,N,P fertilizer required in addition to boiler stack CO2 and sunlight?
> jack

2009 Nov 13 08:25 AM

[Robert0713]

rebaron restates the laws of thermodynamics. You can't even break even. The reason fossil fuels work is that the process doesn't produce the energy bearing compound in real time, only moves it from point A to point B, which is generally a fraction of the energy density moved. Biofuels are producing an energy density in real-time (nearly), and in real-time, the laws of thermodynamics rule.

2009 Nov 13 09:11 AM

[123andy]

Algal biofuels are down the road perhaps. Now these are substantially research projects. Don't confuse promise and potential with reality. At best one in 10, and more likey one in a 100 of promising research projects lead to a commercial success. Thermodynamics does rule. Fossil fuel production energy was invested over a long period of time (millions of years) and we did not make the investment, nature did. Photosynthesis does it real time, slow and steady and nature makes the investment. When we manipulate for profit all kinds of issues come to light as we learn reality. Despite Senator Boxer's or any other politicians wish, and investmentf our tax dollars it will take time to learn how it works, and if it is a sink for dollars or the source of a return. One of the problems we now face is that venture capitalists who used to risk their own money are mixing it up with politicians to force policy decisions in their favor and are now leveraging their own investments with our tax dollars. Not a good thing in my view

2009 Nov 13 10:06 AM

[Ferdinand E. Banks]

Red Baron said that "TOO MANY...." That's correct - "too many", perhaps, but not necessarily all. Algae might be the way to go.

2009 Nov 13 10:15 AM

[ecorowe]

John S. Gordon and others --check out this link on algae's value chain:
petrosuninc.com/algacu...

Algae’s potential as a food or biofuel has been largely under foot but out of mind for most people, institutions and governments. This plant has received considerable attention as a pest but few have considered its potential to serve our planet.

Algae are uniquely positioned to provide a value chain of products and solutions for critical human needs. The 16 factor value chain includes sustainable foods, fuels, ecological and novel solutions represented in Algae’s Green Promise.

2009 Nov 13 10:43 AM

[edexter]

nrg and clc are both in the algae buisness in a way (they are using it to clean up smoke stacks).,.. Getting oil out of it is an entirely different issue but it can be used as bio-fuel and feed (I did alot of research on this and put my cash where my mouth is). You are also starting to see it being used in combination with waste plants to help with processing sewage. With carbon caps you might also see some benifit to planting palm trees for the oil using algae desalination in dryer areas like texas.. algae is here to stay the affordable oil part is the open question..

2009 Nov 13 10:58 AM

[User 471168]

We have spent over $2.2 billion dollars on algae research for the last 35 years and nothing to show for it. Algae has been researched to death at universities for the last 50 years in the US. The problem is as long as the algae researchers can say we are 3-5 years away, its too expensive and they need more research they get the grant money. Nothing will ever get commercialized at the university level.

The question you need to be asking is " Does the US really want to get off of foreign oil or do we want to continue to fund the algae researchers at the universities."

An investigation needs to be conducted on the entities tha have received algae related research grants and what has been commercialized to date. Look at the massive amounts given to universities for research nationwide vs. no monies given for real algae production companies in the US. We need monies going into algae oil production and stop wasting money on research. Algae researchers are incapable of commercializing anything!


On Nov 13 10:06 AM 123andy wrote:

> Algal biofuels are down the road perhaps. Now these are substantially
> research projects. Don't confuse promise and potential with reality.
> At best one in 10, and more likey one in a 100 of promising research
> projects lead to a commercial success. Thermodynamics does rule.
> Fossil fuel production energy was invested over a long period of
> time (millions of years) and we did not make the investment, nature
> did. Photosynthesis does it real time, slow and steady and nature
> makes the investment. When we manipulate for profit all kinds of
> issues come to light as we learn reality. Despite Senator Boxer's
> or any other politicians wish, and investmentf our tax dollars it
> will take time to learn how it works, and if it is a sink for dollars
> or the source of a return. One of the problems we now face is that
> venture capitalists who used to risk their own money are mixing it
> up with politicians to force policy decisions in their favor and
> are now leveraging their own investments with our tax dollars. Not
> a good thing in my view

2009 Nov 13 12:09 PM

[mike57]

again, no mention of petrosun!

2009 Nov 13 12:51 PM

[sdfsdf]

MATK is worth owning if this idea has any potential they have significant experience making stuff out of algae.

2009 Nov 13 12:58 PM

[Orville Wyatt]

I work for Sapphire. We are NOT working with Exxon. Only Synthetic Genomics has sold out like that.

Don't beleive any hype at all, just wait for our results . . .

2009 Nov 13 02:11 PM

[A_Fleming]

The reference to ExxonMobil working with Sapphire Energy is inaccurate. Our $600 million partnership is exclusively with Synthetic Genomics. exxonmobil.com/algae

Adrienne Fleming, ExxonMobil

2009 Nov 13 04:20 PM

[Global E]

Does anyone here, including the author, know what "algae" is? The word is spread from 200 ft macro "seaweeds" to 1 micron diameter Prokaryotes (a.k.a., "bluegreens, blue-green bacteria") and diatoms which measure somewhere in between. The large seaweeds have been fed to cattle (Scandinavia) for decades (milk/cheese tends to taste bad), and these, being bulky, could probably be used much as any plant debris as a source for biofuels. Some of the really small Prokaryotic forms actually produce CH4.Some of the grad students in our lab. entertained themselves by setting fire to the "air" released from large culture vessels which housed populations of said "algae". Diatoms produce oil in preference to carbohydrates for storage purposes. Just how much oil can be harvested from a creature that is about 1-100 microns in length?

BUT, harvesting any of these for the above produce is impractical. Profiting from bulk growth of any but the really large forms is not a sensible goal. No question that the vast array and biological activities of this EXTREMELY broad group of photosynthetic organisms offers intriguing possibilities (bioactive chemicals, waste treatment), but a windmill on the front lawn would offer better energy possibilities.

While I might welcome gov. support for research concerning some facet of promise possible in this vast array of organisms. I would greatly prefer energy investments (via taxes) be aimed at something more rational.

2009 Nov 13 04:44 PM

[SubsidyEye]

Don't you just love these articles? "Algae Biofuels Have a Promising Future". Sure. And so does cold fusion, massive solar arrays in space, and deep-ocean geothermal energy. This is Seeking Alpha, not Popular Science. Why does it run so many vapid articles like this?

Anybody who is curious about algal energy should read through Robert Rapier's "R-squared blog" articles on the topic:

i-r-squared.blogspot.c...

i-r-squared.blogspot.c...

Rapier knows what he is talking about. But,even more so, the people in the industry that he interviews know what they are talking about.

It would be nice if algae could live up to its hype. But that is 99% of what one reads about it these days: hype.

2009 Nov 14 06:18 AM

[bassmaster17]

Do any of you understand how Petrosun could become profitable. I know their CEO was in China sometime back, but if any of you understand the company please give me further insight. Thanks

2009 Nov 14 11:52 AM

[EVNow]

It is fairly clear - reading this article - that the authors don't know much about algae.

Here is a much better article :

www.nature.com/nbt/jou...

2009 Nov 14 03:29 PM

[SubsidyEye]

EVNow: the Nature Biotechnology article to which you provide a link is unusually objective and rich in information. Many thanks for the link.

2009 Nov 15 05:41 AM

[nerfer]

Do you have any supporting evidence for the $2.2 billion figure? EVnow's interesting and informative link states "The US Department of Energy (DOE) from 1978 to 1996 devoted $25 million to algal fuels research at NREL". Even if the total number is in the single billions, that is less than government-subsidized research into coal gasification or hydrogen research.
Algae takes power from the sun, but doesn't have the daily variations that wind or solar has (personally, I prefer geothermal for electric production). Since it can be grown intensively, using waste water, it can theoretically provide much more energy per acre than other, larger crops. (Much better than corn ethanol, even better than sugarcane ethanol, which is a feasible crop). I really don't see what all the fuss about "real-time" energy creation is for. All bio-mass is real-time (renewable). With the end of cheap oil upon us, we need to put real money into things that have real promise, if we want any kind of decent economy in the future. Obviously algae is not the only solution, but there won't be a single solution to replace oil, it's been so versatile and critical we will need every tool we can use going forward.

On Nov 13 12:09 PM User 471168 wrote:

> We have spent over $2.2 billion dollars on algae research for the
> last 35 years and nothing to show for it. Algae has been researched
> to death at universities for the last 50 years in the US. The problem
> is as long as the algae researchers can say we are 3-5 years away,
> its too expensive and they need more research they get the grant
> money. Nothing will ever get commercialized at the university level.
>
>
> The question you need to be asking is " Does the US really want to
> get off of foreign oil or do we want to continue to fund the algae
> researchers at the universities."
>

2009 Nov 16 12:53 PM