Supercrude Scum: The Algae-To-Biodiesel Battle

Most greentech watchers have lost their sense of wonder over the fact that pond scum, a.k.a. algae, could be one of the most efficient ways to make biofuels for our cars. These tiny chemical factories can turn sunlight and nutrients into fuel with an efficiency unrivaled by traditional crops, all while using the CO2 that would otherwise go into the atmosphere. It seems almost impossibly promising, which is one reason that a host of companies working with algae, including Solazyme, GreenFuel, GreenShift, and Inventure Chemical have all received funding in the past year.

Of course, there are also host of problems (VCs might call them opportunities) involved in actually creating energy from algae. These problems mimic those of agriculture: there is a constant trade-off between the yield and the amount of money required to invest in the “crops'”production. The two culture methods — open and closed pond systems — each have their pros and cons. In the open system, the algae grow in what are essentially just ponds. It’s cheap, but keeping out “weed” organisms is difficult. Closed pond systems, on the other hand, work more like greenhouses. They are expensive to construct but it’s much easier to regulate the growing conditions.

Today’s startup profiles look at two algae-to-biofuel companies, Live Fuels and Solix Biofuels. When it comes to both culture systems and funding, the two have taken divergent approaches, but they aim to have the same end product: biocrude (or as Live Fuels calls it, “supercrude”). Instead of attempting to convert algae directly into ethanol or biodiesel, these companies are attempting to create green crude that could be fed directly through the nation’s current refinery system. If it works, the technology would require fewer changes to the nation’s energy infrastructure than other biofuel approaches currently out there.

Company: Live Fuels
Hometown: Menlo Park, Calif.
Founder: Lissa Morgenthaler-Jones
Financing: $10 million
In Their Corner: Quercus Trust, Sandia National Labs
Product: Biocrude
CoreTech: Open-pond algae bioreactors
Commercialization: 2010

Company: Solix Biofuels
Hometown: Fort Collins, Colo.
Founder: Jim Sears
Financing: NA
In Their Corner: Colorado State University
Product: Biocrude
CoreTech: Closed-pond algae bioreactors
Commercialization: 2009?

Live Fuels has received $10 million in financing from the Quercus Trust, David Gelbaum’s well-known environmental funding group. The company believes that driving down costs is paramount to pushing out their technology, so they are taking the open-pond approach to algae culturing. A major component of the group’s core technology is the cultivation of an open-pond ecology that keeps high-value algae producing while preventing unwanted natural competitors from taking over. Working with scientists from Sandia National Labs, Live intends to be price competitive with crude oil.

Solix Biofuels is a venture that consists of private entrepreneurs Jim Sears and Doug Henston, Colorado State professor Bryan Wilson, and Colorado State University itself. Working to refine and scale Sears’ original bioreactor design, the group has called on the resources of CSU’s Engine and Energy Conversion Laboratory in constructing a working prototype of the closed-tank bioreactor. Simply put, the system grows algae in cheap plastic tubes, which keep out unwanted algae while keeping capital costs low.

The company has said that construction will begin this year on its first, large-scale bioreactor at the New Belgian Brewery in Fort Collins, Colo., where waste CO2 produced in the making of delicious beers like our personal favorite, Fat Tire, will be used to feed the algae. Solix eventually plans to license its technology, a process the company believes will speed its product to market without the huge capital investment necessary to build its own plants.

Algae is the most promising biofuel “crop” on a per-acre basis, but the technical hurdles involved in finding (or bioengineering) the right oil-producing algae, the right nutrient mix, the right culturing system, and the right business model mean that scale production of any type of fuel from algae is probably a long way off. Still, it’s going to be an exciting bout to watch as all these startups move through the various stages of funding and start to turn these ideas into factories and fuel.