Scum Power

Turning algae into fuel isn't ready for prime time. But it may be getting closer.
By RUSSELL GOLDJune 30, 2008; Page R10
It sounds too good to be true. Take some fallow land that is unsuited for growing food. Build some ponds and let microscopic algae bloom. Harvest the algae, extract the vegetable oil and turn it into a green-tinged transportation fuel.
Amid soaring crude oil prices, more companies are investigating whether green algae may hold promise as a biofuel. But challenges remain.
The truth is, it is too good to be true -- at least right now. While engineers can grow small batches of algae in beakers in laboratories and convert it into fuel, re-creating that process on an industrial scale has proved elusive and expensive when compared with the price of gasoline.
Still, with crude-oil prices soaring and concern growing that biofuels made from crops such as corn are creating a food shortage, interest in algae fuel is blossoming. Betting that in a few years algae will be ready for prime time, companies ranging from start-ups like GreenFire Energy of Salt Lake City to energy giants such as Chevron Corp. and Royal Dutch Shell PLC are investing in projects aimed at finding an economical way to turn algae into fuel.
"The promise is huge, the technical challenges are major," says Philip Pienkos, research supervisor at the U.S. Department of Energy's National Renewable Energy Laboratory in Golden, Colo. But "just like fusion, the potential for making a cheap source of energy with minimum inherent problems is too great to ignore," he says.
Putting an algae-based fuel into a gas tank isn't as far-fetched as it sounds. Biological material has long been the source of the world's dominant fuels -- from whale blubber in the 19th century to crude oil today. Crude oil is simply prehistoric plankton and other decomposed plants and animals that have stewed underground for millennia. That is why it is called a fossil fuel -- fossils are involved.
While it takes eons to create crude oil, scientists are trying to speed up the process of turning algae into oil. The characteristics of algae -- the microscopic single-celled organisms are tiny biological factories -- may help make that goal a reality. According to Royal Dutch Shell, some algae strains can double their weight three or four times a day; other strains can generate 15 times more vegetable oil than other plants used for biofuels, such as palm and rapeseed.
VEGETABLE POWER Algae cultures at the Natural Energy Laboratory Hawaii Authority
"Many scientists believe algae -- single-celled pond scum -- may be the perfect plant from which to derive biofuels," says Neil McMahon, an energy analyst at Sanford C. Bernstein & Co. who works out of both London and New York. "Algae can grow in waste water, even sea water, requiring little more than sunlight and carbon dioxide to grow in large volumes," he says.
It can take a ton of algae to produce just two barrels of vegetable oil, however, so much of the current research is focused on driving down production costs and boosting productivity by finding strains that reproduce quickly and produce a lot of oil.
Scientists aren't starting from scratch. In the 1970s, the federal government created the Aquatic Species Program in the National Renewable Energy Lab to study thousands of strains of pond scum in an effort to find the best candidates. Although research was shut down in 1996, when oil prices were low, the program's close-out document has given numerous scientists a head start on their algae research.
While scientists can grow the right kind of algae in a laboratory, that isn't of much use to companies that want to produce thousands of barrels of oil a day. The key is figuring out how to grow a good strain on a large scale.
"Growing the algae in a controlled way at commercial scale is a big challenge," says Randy Balik, vice president of business development at GreenFire Energy, which is seeking additional funding for its effort to find a way to do just that. "We are, optimistically, two to three years away, maybe four to five, from realistic, large-scale commercialization."
Empty algae growth ponds at Mera Pharmaceuticals in Hawaii.
Currently, there are two main options for growing algae, both of which have drawbacks. It can be grown in large, man-made open ponds, which is attractive because the ponds can be built on land that can't sustain agriculture, avoiding the problem of crop displacement that is plaguing corn-based biofuel. Royal Dutch Shell and Hawaii-based HR BioPetroleum Inc., for instance, announced plans in December to harvest algae from seawater ponds on the west shore of the island of Hawaii. The problem with this method is contamination. A company may start with the perfect algae strain, but contaminants such as bird droppings can result in the pond being overgrown with a strain that doesn't produce much oil.
The other option is to grow algae in enclosed plastic tubes -- photobio reactors -- that keep out contaminants. But because of the expense, the price of crude oil would have to rise considerably above $130 a barrel for algae from these closed systems to be competitively priced, industry participants say.
Today, the cheapest algae production -- done for the food-supplement industry -- costs $5,000 per ton, says F. Blaine Metting, a researcher at the Pacific Northwest National Laboratory, a U.S. Department of Energy facility in Richland, Wash. Still, he believes that if the crude oil stays at its current lofty price, algae-based oil could be competitively priced in five years if engineers and scientists can improve algae productivity per acre. "There are fundamental biological questions that need to be answered," he says.
POND SCUM'S PROMISE

• The Situation: Interest is growing in algae fuel amid a rise in crude-oil prices and criticism of crop-based biofuels.
• The Background: Algae needs only sunlight and carbon dioxide to grow in large volumes, which is why many tout its potential as a cheap energy source.
• The Bottom Line: Scientists have converted algae into fuel in the lab. The challenge is finding a way to re-create that process on an industrial scale.
Algae feeds on carbon dioxide as it multiplies, so it has the potential to help address linked challenges: the need to generate increasing amounts of energy without releasing increased amounts of carbon dioxide into the atmosphere.
Right now, the process of generating algae oil releases more greenhouses gases into the atmosphere than it consumes because harvesting algae takes considerable energy. But as companies race to find ways to harvest algae more economically, with less energy, algae-derived fuel will move that much closer to carbon neutrality -- when the amount of carbon dioxide released to make it is offset by the amount taken in.
Chevron, meanwhile, is working to develop algae oil that can enter existing refineries, pipelines, gas stations and car engines with relatively few problems.
Today, refineries take in crude oil from around the world, each with its own characteristics. The refining process is tweaked, depending on whether the crude being processed is from Mexico, Louisiana or Angola. Jeffrey Jacobs, vice president of biofuels for Chevron Technology Ventures, says the San Ramon, Calif., company's goal is to create an algae-based oil feedstock that refineries could process in much the same way and just as easily.
"The idea here is you want to be compatible with the existing infrastructure," he says.
But asked when motorists will pull into Chevron gas stations and fill up with fuel that is at least partially derived from algae, he says: "Your crystal ball is as good as mine."
--Mr. Gold is a Wall Street Journal staff reporter in Austin, Texas.
Write to Russell Gold at russell.gold@wsj.com