Cellulosic ethanol has received the most hype as the eventual main replacement energy source for petroleum-based fuels, but the second most mentioned alternative within the past couple years has been biofuel produced from algae farming.

If you go to Web sites such as the one for Sapphire Energy, Inc., you might be convinced that algae-based biofuel is already flooding into the market. The Web site suggests it is an easy process to extract oil from algae.

“Nearly all of algae’s energy is concentrated in the chloroplast—the engine that turns sunlight and CO2 into organic carbon, resulting in oils easily refined into gasoline, diesel and jet fuel. Further, algae has a short growing cycle and does not require arable land or potable water. Algae’s number one nutrient source is CO2, consuming 13 to 14 kg of CO2 per gallon of green crude. Algae can be grown quickly in salt water in the desert,” the Sapphire Web site claims.

In actuality, it really isn’t that easy, and the volume of biofuel from algae that could make a difference in oil imports or replacing corn-based ethanol appears to be years away. Already, algae energy companies have come and gone. Only a handful of companies seem to have technology that matches even part of their companies’ vision. Claims of success largely have come before the science has been proven for large-scale algae biofuel production.

Start-up algae companies during the recent economic recession have had difficulty convincing investors to put their money in this new industry, mainly because of warnings by most scientists outside the industry that even the most promising algae biofuel production systems won’t be profitable for at least a decade.

What Appears Easy Isn’t

What has motivated so much publicity and companies to investigate algae fuels production is that the various forms of photosynthetic bacteria and single-cell microalgae, both commonly referred to as algae, are found worldwide. They have been given credit by some scientists as accounting for as much as half of the world’s oxygen production. Additionally, all algae needs to reproduce is light, appropriate temperatures for the type of algae, a source of CO2 and water.

Pond scum or green slime algaes found in nature do a good job of reproducing on their own, but are not easily reproduced in high concentrations because they block the light from each other. Not being able to get around that problem has been the downfall of several start-ups.

Biofuel from Algae Has ProblemsEven though the potential for algae biofuels remains far from being realized, the Department of Energy has shown strong support for the algae industry’s potential. DOE officials are betting on tomorrow’s science and investing government money for the future, but at best it appears if large volumes of algae biofuel could be produced, it would cost at least twice that of gasoline. Competitive pricing for algae biofuel is “off by at least a factor of two right now,” according to Steve Koonin, DOE’s undersecretary for science, as quoted during this year’s most recent meeting of the American Association for the Advancement of Science.

Unconventional Research

Joule Unlimited is a biofuel company that has received considerable attention recently as it has made claims that in the not too distant future it will be able to produce diesel fuel at a lower cost than any other biofuel production method.

The Joule company is not using conventional algae in its research but photosynthetic bacteria, which is called cyanobacteria. A simple explanation of the link to algae is that cyanobacteria at one time was called blue-green algae. Both cyanobacteria and other micoalgae for biofuels production are single-celled plant material, but they are “different domains of life,” explained Paul Voosen, an Energy and Environmental Greenwire reporter.

DNA-sequencing to look at different cyanobacteria and alter them for oil production has become a fast and fairly low-cost operation, according to Voosen’s sources at Joule. Donald Bryant, a microbiologist at Penn State University, also told the E&E reporter that it only costs $5,000 to sequence the DNA of a moderate-size microbe, and it can be done in less than a day.

Algae farming research is not confined to the U.S., although it appears more companies are conducting research and demonstrations in the U.S. than most areas of the world.

News releases from little known companies and those with somewhat proven technology just keep coming. Synthetic Genomics has announced that it has engineered algae to secrete oil continuously. The Algenol company claims its process produces ethanol from hybrid algae in a closed system.

Sapphire Energy is in an early stage of bioengineering algae for oil production. Sapphire plans to grow algae in ponds of salt water. They recently signed an agreement with The Linde Group, “the leading merchant CO2 supplier in the U.S.,” to co-develop “a low-cost system to deliver CO2 to commercial-scale, open-pond, algae-to-fuel cultivation systems.”

Monsanto recently signed a deal with Sapphire that would provide Monsanto access to genetic technology for isolating traits in algae that could be incorporated into crop seeds for crop improvements.

Cellana LLC in Hawaii claims it is ready to ramp up a commercial algae facility for oils and other algae products. It is easier technology to use algae production for those other products than biofuels. Some products are fish feed, dietary supplements and cosmetics.  

Solazyme is a company that is now producing algae ethanol, not biodiesel, in vats or fermenters using sugar to feed its algae. The University of Arkansas is advancing a technology to convert algae into butanol, an alcohol-based fuel that could be used as vehicle fuel.

Solix BioSystems is growing algae in “photobioreactors,” or panels that float and reduce the problem of the light reaching throughout a layer of algae. Solix BioSystems has a demonstration plant that uses waste water from coal-bed methane produced near the site and CO2 from a mine scrubbing plant. The two operations produce a lot of CO2 and nitrogen necessary for algae growth.

Some of the most logical algae biofuel production research is coming from universities and laboratories looking at similar biofuel production as Solix. Researchers at Lawrence Berkeley National Laboratory in California are touting their algae ponds concept in combination with wastewater treatment with oil as a byproduct. And Kevin Shurtleff, director of the Utah State University Energy Dynamics Lab, is heading development of technologies using the wastewater at coal-fired power plants or municipal sewage plants. Yet other preliminary investigation is going into municipal wastewater treatment and landfill gas sources as feedstock for algae.

Need for Investment and Tax Breaks

The algae biofuels industry, which is basically at the demonstration and research level, decided back in 2006 that it needed to be organized to lobby Congress for funding and tax breaks. The Algal Biomass Organization has been lobbying for equal treatment in funding with the cellulosic biofuels industry. Legislation providing tax credits to the biodiesel industry passed last year, but the legislation did not include provisions for feedstock like algae to qualify. The Renewable Fuels Standard does not currently include algae biofuels as an advanced biofuels.

As mentioned at the beginning of this article, many algae start-ups have not survived and more will not survive. Will Thurmond confirms this with his market research report, Algae 2020, Vol, 2.

“For the Algae 2020 study, I did my research the old fashioned way where you conduct an on-site visit, you kick the tires, and you say, ‘I understand you’re producing algae and you have a pilot project,’” Thurmond explained. He interviewed more than 200 algae-related companies and visited 30 in person.

In the report, Thurmond concluded that of all the current algae production companies, research and development ventures and public-private partnerships currently in play, “less than a dozen will graduate into pre-commercial, deployment-stage algae ventures using ponds, photo bioreactor and fermentation-based production systems.”