Algae Startups Confront Promise of Miracle Fuel With Big Summer

After years of hype as the mucky green grail of the oil crunch, algae is finally taking on its "impossible" hurdles to move from test tubes to barrels. With key players in this budding industry laying their bets on the winning biofuel formula, how long will it take before slime powers your life?
Researchers studying genetically modified superplants and algal cultures at the Natural Energy Laboratory Hawaii Authority soon will utilize the new "hybrid" tube-to-pond system currently being constructed by HR BioPetroleum. (Photography courtesy of Shell)

The fluorescent green mantle of biofuel savior has come to rest upon algae—slimily, sure, but for good reason. Algae grows in fresh water or salt water or sewage, rather than competing with food crops for land or resources. And algae actually sucks out the pollution from coal-fired power plants, with a theoretical yield of oil per acre that's hundreds of times greater than, say, corn.
But after all the hype—and there's been plenty of it—the fact remains that nobody has yet proven they can cheaply and reliably transform the stuff from a thick, green slurry to a finished fuel capable of making a dent in America's 870 million–gallon-per-day petroleum habit.

"I get a lot of people telling me that they've got thousands of gallons, but when I actually ask for a sample I can get maybe two," says Jennifer Holmgren, director of the UOP renewable energy and chemicals division, which is working to refine jet fuel from feedstocks that include algae.

"Google some of the numbers, and you've got people claiming that right now they're producing 35,000 gallons per acre per year, and they'll be producing 100,000 gallons—and that's just impossible," says Solix Biofuels lead scientist Bryan Wilson, a veritable grandfather with two successful years in the fledgling algae industry. "There's probably not more than a few barrels floating around right now."

Two years ago, there were less than a handful of companies chasing the next wave of so-called "pond scum" power. Today, there are dozens, many backed by big energy industry players such as Chevron and Shell. Last year, DARPA granted UOP $6.7 million to study how "second-generation" feedstocks, or nonfood crops, could turn into JP-8 jet fuel for U.S. Air Force and NATO fighters. Just this month, Airbus and JetBlue announced goals to replace 30 percent of jet fuel with second-gen biofuels by 2030. Air New Zealand and Dutch airline KLM have similar plans in the works.

All that's missing, for now, is all that oil they need to refine.

"It's frustrating for the outside world, but we've been learning how to do agriculture for about 5000 years, and we've been learning how to make oil from algae now for only a couple of years. So there's a lot of learning, and the curve is pretty steep," Wilson says. "This is probably going to be the first summer that you're getting anything more than just test tubes of oil produced."

This is algae's second coming. The first attempt, run by the U.S. government in the wake of the last oil crisis, was killed in 1996 by the Clinton administration while oil hovered around $20 per barrel. But even now, with record-high petroleum prices, algae stands in no position to compete, and hurdles remain at every stage of production.

Just choosing which kind of algae to start with is a herculean task. There are well over 100,000 species, each adapted to grow in different environments at different rates, and each capable of producing different amounts of oil—or none at all. The government collected more than 3000 different strains from all over the world in the 1980s, 300 of which were deemed promising. Today, many algal strains have been engineered into genetically modified superplants—the secret formulas of biofuel startups—but there is, as yet, no proven winner. Not to mention, there remains the small matter of how to make the algae flourish, how to cheaply dry several million gallons of subsequent slush, and how to get the oil out of minuscule cell walls and into the metaphorical barrel.

"It's not as easy as running a combine through a field of canola to get the seeds and crush them," says Michael Weaver, CEO of the Washington biofuels company Bionavitas. "For anybody who thinks that we can go from ‘Hey, let's look at algae,' to full-on fuel production in the period of the past three to five years, it's just never going to happen that way."

A number of pilot plants scheduled to come online in the next several months will likely give the most accurate glimpse of algae's future: how much oil it can produce, how soon and whether it will live up to its promise. GreenFuel, one of the oldest names in algae, already operates a pilot plant in Arizona, where it houses algae in large, clear plastic bags. Solix will break ground this summer on a new plant in Colorado, growing algae in what are essentially 230-ft.-long, 5-ft.-high freezer pops, suspended vertically in shallow pools; a smaller array, with eight 65-ft.-long bioreactors, has entered production in recent weeks. HR BioPetroleum, which signed a deal with Shell last year to produce biodiesel from algae, is currently building a pilot plant in Hawaii using a "hybrid system"—growth begins in long, clear, horizontal tubes before being dumped into open ponds to multiply further. Blitzing the ponds with algae for a short time has the advantage of rendering species invasion a nonissue, the company says.

"The jury is out on all of them—nobody has fully demonstrated that their system is going to be affordable and scalable, and be robust in terms of operations and maintenance and the ability to produce a large amount of oil routinely," says Ron Pate, a researcher at Sandia National Laboratories who evaluated algal oil in conjunction with DARPA's jet fuel project last year. "There are a lot of naysayers out there, and that's fine. It's good to be skeptical. But at the same time, I think there's enough promise with algae that it needs to be given a better shot than what's been done in the past."

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