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Judging from the flurry of venture-capital deals, big oil company investments, and attention from politicians on startups creating biofuels from algae, it might seem like the world has fallen in love with the technology to power vehicles with pond scum. But after all of the algae […]

algaefuel2Judging from the flurry of venture-capital deals, big oil company investments, and attention from politicians on startups creating biofuels from algae, it might seem like the world has fallen in love with the technology to power vehicles with pond scum. But after all of the algae euphoria this summer, we’ve started seeing a few signs of an algae fuel backlash, with several prominent investors publicly questioning the economics of algae fuel.

At the AlwaysOn’s GoingGreen conference, outspoken cleantech investor Vinod Khosla said his firm has aggressively been looking at algae technologies, but hasn’t found one viable plan after looking at “maybe two dozen.” “The economics of algae don’t seem to work,” he said.
(You can watch the video here by clicking on “Renewables at Scale.”)

In contrast, Khosla has been investing millions into biofuels made from cellulosic biomass. His sentiments also seem to be a change from the rhetoric just last year, when Khosla said at the Algae Biomass Summit that algae could “be a solution” and play a significant role in replacing oil.

Khosla isn’t the only one warning against too much optimism where algae fuel is concerned. At the EmTech conference this week, Jim Matheson, a general partner at Flagship Ventures, said he doesn’t think the costs calculate out either. “We just don’t believe in the economics,” he said, and added that he isn’t sure that “algae is going to come down the cost curve,” according to Technology Review.

At the same event, Technology Review also reported that David Eyton, head of research and technology at BP, which has invested in algae startups Synthetic Genomics and Martek Biosciences, questioned the viability of different types of algae technology, and more specifically the kind that Exxon Mobil recently invested $600 million in. “We don’t think that will ever reach the kind of cost or supply that we think people are prepared to pay,” he said.

Is the algae-fuel backlash snowballing into a full-on trend? Well, algae has always had its skeptics. As far back as three years ago, companies like Imperium Renewables were stating that producing significant amounts of algae for biodiesel was further away than cellulosic ethanol. “It’s not about whether algae can produce oil, but about whether it can meet a standard quantity needed for fuel,” then-CEO Martin Tobias said at ThinkEquity’s Greentech Summit in San Francisco back then. “It’s going to take longer than anyone wants to say at an investor’s conference.”

Nobody so far has been able to produce algae cost competitively in large quantities, and – in spite of all the promising ideas — it’s still unclear whether that will happen. Matt Horton, CEO of Propel and a principal at @Ventures, said his view of algae hasn’t changed in the last few years. “It’s one of the most promising opportunities in the liquid fuels arena, but the timelines for true commercialization are still years down the road,” he said. It’s tough for a company like Propel to work with algae companies at this point because it’s difficult to predict – with any certainty – when algae-based fuels might realistically be delivered.

When a technology like algae fuel gets as much attention as it has this summer — with politicians visiting algae fuel startups on a weekly basis — it becomes an easy target for the skeptics. What the industry needs right now is less hype and more proof that the pond scum can really come down in cost to reach mass commercialization.

Image courtesy of NREL.

  1. In all fairness, there have been algae skeptics for a long time. Algae has been a research topic for at least 30 years and no-one was able to make it work. Most of these start-ups haven’t really made any innovations to address the core scale-up issues. So there’s still room for some skepticism where true innovation has not been demonstrated. That’s probably how it should be.

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  2. Algae is renewable, it reduces cO2 emissions, it doesn’t require fresh water to grow, it doesn’t need to compete with crop land. We now have significant investment money to make it work. Skeptics beware.

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  3. People are missing the most basic point here. And that is, even if cultured algae produced oil for only $1 a gallon, instead of $33 to $100 as has been predicted – it is still an OIL.

    And all OILS float on water. And their uncombusted oily emissions phase separate from the earth’s water-laden atmosphere which we see and breathe as brown urgan smog. It is that simple.

    All hydrocarbon oils and coals are missing one necessary atom in their output fuel recipe. And that is oxygen, typically derived from H2O water. Same goes for biodiesel prepared using more plant-based oils or animal fats. It also phase separates from water on this blue planet.

    Chemically binding an oxygen atom to oils converts them into water soluble, oil soluble, coal soluble and biodegradable fuel alcohols.

    The key tenent when looking at any new alternative fuel is to first ask yourself (or the project’s proponents) “is this new fuel biodegradable? Will it dilute in the planet’s water bodies and then become a free lunch for bacteria, micro-organisms, phytoplankton or any green plant or living tree? When this basic question is reviewed, you’ll find that most new fuel ideas will fail this test. There are a few which don’t and people have been fed a litany of disinformation for the past couple of years now.

    There is a giant green Rumplestiltskin now quietly awakening, rubbing his eyes and preparing to step out of the woods and into the clearing. Soon, people will see examples of something new, large, lowcost, biodegradable and seamless for immediate use and application within the fossil oil refining business which delivers us freeway and jet airplane fuels.

    I’m glad that a few others are now questioning some of the validity of green algae vege-oil production. A couple of key editors within this biofuels space have been stirring up excitement herein, getting unknowledgeable folks rather gaga about something which will soon be going the way of the Hydrogen Hallucination which was being promoted by Dubya just three weeks before launching the invasion of Iraq where the real prize was to gain control of more float-on-water oils. Hummmmm….

    Gary

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  4. Gary,

    I think you are misinformed in a couple of points that you raise. I hope you don’t mind me correcting these errors.

    1. The “oil” (really triglyceride, not oil in the fossil fuel hydrocarbon sense) does indeed contain a significant proportion of oxygen. Even the biodiesel (methyl ester) that is yielded from the triglyceride still contains oxygen. The oxygen cannot of course combust (it is already fully “oxidized”) but does assist in more complete combustion of biodiesel compared to straight hydrocarbons. It also results in a slight reduction in energy density. But to say that biodiesel needs to be bonded to oxygen to make it water soluble is just not true.

    2. The “oil” that comes from algae is indeed biodegradable. Biodiesel will rapidly break down and be consumed by microbes. To quote the University of Idaho, “In tests performed by the University of Idaho, biodiesel in an aqueous solution after 28 days was 95 percent degraded. Diesel fuel was only 40 percent degraded. In a second study done in an aquatic environment (CO2 Evolution), various biodiesel products were 85.5-88.5 percent degraded in 28 days, which is the same rate as sugar (dextrose). Diesel degradation was 26.24 percent.”

    The combustion of biodiesel fuel from algae (or any other plant or animal source) does not cause any environmental problems. The growing and production of the biodiesel may not be able to make the same claims in all cases, and that is fodder for another blog. But the salient point here is that biodiesel storage and combustion is about as green as you can get. And producing that biodiesel from algae would appear to cause the least environmental impact. It could actually be a net positive to the environment if the algae is produced using waste water as the source of growth nutrient. The algae cleans up the wastewater by removing N and P and the produces an clean burning biodegradable fuel to boot.

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    1. David: This is a public discussion here, and of course I don’t mind you publishing your own comments critical to my post above. While I can understand your chemical points about traces of oxygen being contained within triglycerides or even biodiesel – this slight oxygen content is not nearly enough to make these ‘oily’ fuels dilute into water.

      Methanol contains 50% oxygen, ethanol contains about 33% oxygen content… Agri-derived Oils produced from green algae or animal fats or other plant oils like palm or soy still float on this planet’s water bodies just like a crude oil spill does – at least for a month or so.

      I’m also aware that these plant oils will finally break down in about a month’s time where crude oil does not. I still do NOT consider these algae oils to be biodegradable in the sense that alcohols will dilute and feed mother nature’s bugs and grasses and trees with an immediate and rather wholesome free lunch.

      In contrast, biodiesel produced from any source, be it algae, palm, soy, etc., is still clarified using copious quantities of fresh water. Anyone I’ve ever met who has worked closely with transestrification processes used to break glycerins apart from the plant oils actually combusted as a diesel substitute – begin to quickly realize the folly of this process.

      Recycling waste restaurant grease becomes one aspect herein – growing hundreds of thousands of acres of agri-oily plants for new biofuel feedstock is quite another.

      Beyond this first element to consider regarding real-world elements of biodegradability, I’m content to wait and see anything truly real concerning the scaleability of such intensive algae growing systems.

      Scientists are already doing a fair amount of genetic manipulation in this particular alternative fuels industry as well. I get a bit nervous when I read about nastier types of e-Coli biobugs being created as another process driver to break lignins down into simple sugars for second stage traditional fermentation with yeast.

      The last quote I read herein regarding algae oil volume outputs per acre under rather diligent cultivation schemes would take 73,000 acres of algae-growing space to equal the same volume outputs of a new gas to liquids higher alcohols synthesis plant with a total footprint on maybe 15-20 acres.

      I simply see and interpret the present state of misplaced public gaga/enthusiasm about algae oil these days as something akin to the Hydrogen Hallucination going around just prior to the USA’s invasion of Iraq. Were we really going in there to displace Saddam and chemical weapons – or perhaps to gain control if this country’s oil? You decide.

      Gary

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  5. I would also highlight that the oils are produced inside of the algae cells – they have to be split open in order to be harvested (only Synthetic Genomics has said they have gotten away from that). The other difficulty is scale-up. Algae farms, using open-track ponds amount to large swimming pools many acres in size. Building swimming pools many hundreds-of-thousands of acres in size seems a bit impractical. Factor in that you must pump every gallon of that volume in order to harvest and separate (even if it does phase separate) requires a lot of input energy and infrastructure. That’s also a bit impractical.

    These are some pretty steep challenges. But they’re worth the financing to address. But they are legitimate points of skepticism. Let’s hope they can be overcome.

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  6. [...] stage, show the most variation of any other tech category. They still have plenty of skeptics, including aggressive cellulosic biofuels backer Vinod Khosla. Lux writes, however, that “While the majority of companies are still trying to decide upon [...]

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