Algae biofuel propels a braves’ new world

Ancestral land is being used to test facilities that can turn pond weed into biofuel
Dominic Rushe
The sun shines on Coyote Gulch for an average of 300 days a year. The land in southwest Colorado belongs to the Southern Utes, the region’s oldest continuous residents and now one of the wealthiest American Indian communities.
Beneath their ancestral lands lies one of the world’s richest natural-gas fields. Energy and property investments have made the Utes a wealthy people. Now they believe they have spotted another opportunity: they have literally gone green.
Coyote Gulch is home to a high-tech plant that uses algae to make biodiesel. Pond scum and its relatives are fast becoming one of the hottest research and investment areas in biofuels, part of a second generation of fuels trying to escape the controversies that tainted their forerunners based on food crops such as corn.
As a fuel crop, algae have a lot of advantages over corn and other plants. They are among the fastest-growing plants in the world and about 50% of their weight is oil. Grown in either open-pond or closed-pond systems, once the algae have been harvested, the oils can be extracted and refined to make biodiesel.
Exxon, considered by some to be the world’s least green oil company, has put $600m (£366m) into algae research and thinks that when the system has been developed it could yield 2,000 gallons of fuel per acre each year. Corn yields 250 gallons per acre a year.
The Coyote Gulch experiment is being run by Solix Biofuels. The Utes contributed almost one-third of the $20m in capital raised by Solix and have donated land and equipment to the project.
Doug Henston, Solix’s chief executive, said many challenges remain. Rival firms are concentrating on finding the best types of algae to use. “We’ve had thousands of years to domesticate other plants. Nobody has domesticated algae,” he said. Solix is “algae agnostic” and is concentrating instead on the other big dilemma for algae growing — open ponds versus closed ponds.
Algae fuel is not a new idea. The US Department of Energy conducted studies using open ponds for 18 years. It shut down the programme in 1996 after concluding that algae oil could never compete on price with fossil fuels.
However, open ponds are subject to contamination and Henston believes closed systems, while expensive now, could increase efficiency and, with scale, bring down the price of the final fuel. He is confident that the company has the technology to grow algae efficiently in tanks — known as photo-bioreactors — using less space than open ponds and allowing for more controlled conditions.
Solix is looking for partners among the large oil companies that already have the systems in place. Scaling up the technology will be all about those partners, he said.
Bob Zahradnik, who oversees the Utes’ multi-billiondollar energy investments, said the tribe had three main criteria for making renewable investments. “First, it has to be technically feasible. It might not have everything in place, and there may be some bugs to iron out, but it’s got to be possible,” he said.
Second, the project has to be “truly environmentally sound”. The tribe ruled out investments in corn ethanol because they did not like the idea of using food for fuel. “For us, in a world with seven billion people, competing with food even for space is not a rational proposition,” he said.
Third, it has to make economic sense. “We are long-term investors but we want to make money,” said Zahradnik.
The Utes’ interest comes at a low point for the biofuels revolution. The recession, falling oil prices and “irrational exuberance” have all taken their toll, said Henston.
According to the National Biodiesel Board, an American trade association, two-thirds of American biodiesel production capacity now sits unused. Last year biofuels were blamed for soaring food prices and the use of food for fuel has become political dynamite in some countries.
The surge in food prices led to a leap in algae investments last year, according to New Energy Finance (NEF), the research firm. Biofuel investment has reached $3.6 billion in the past two years and next-generation technologies such as algae now account for more than a third of that money.
Harry Boyle, an NEF analyst, said: “I was extremely sceptical about algae to begin with. It seemed like a classic area for venture-capital investors with little or no energy experience, simply seeing the big exit as where you sell your technology to an oil company or a utility.”
Boyle said several factors, had now made algae more attractive. The first two are political. The rise in food prices has put fresh impetus behind the new generation of biofuels that do not need to use food crops. And algae can be raised on land that is not suitable for farming, avoiding arguments about using arable land to produce fuel.
Boyle said algae technology also had some inherent advantages of its own. Algae biodiesel can be used as aviation fuel — last year Continental flight 9990 became the first example of an airliner testing algae fuel during a commercial trip.
The process, he said, is also a useful way of sequestering carbon dioxide, the greenhouse gas thrown off in harmful amounts by power stations. The unique properties of algae mean they can be used to clean up the environment.
Nasa scientists are working on a project that uses municipal waste water to grow algae. The system purifies waste water at the same time as producing oil. A cost-effective way of reducing carbon-dioxide emissions would provide a powerful boost for the algae industry.
America has set a target of injecting 36 billion gallons of biofuels into the fuel supply in 2022, up from 11.1 billion gallons in 2009. Present trends — both political and scientific — suggest that if the American government is to hit its targets, algae and other second-generation fuels will have to be part of that mix.
Despite last year’s ructions, the Utes’ long-term view may turn out to be a green investment in more ways than one.
Green Idea
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