Spring 2011 Algae Technology & Business

INSIDE: PROJECT SCALE AND RISK; AND ALGAE CO2 PROJECTS

spring 2011

The

Strength of the Strain

Efforts in Algal Strain Selection Pay Off Page 22

Plus

Breaking Through the Bottleneck Page 14

Making Algae Work in the Midwest Page 18

And

NREL Algae Program Revival Page 26

www.biorefiningmagazine.com/algae-technology-business

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contents

spring issue 2011 VOL. 01 ISSUE 01

features

14

18

22

INDUSTRY

REGION

Identifying and improving weak links in the algae value chain

By Bryan Sims

A new algae research center in Ohio will spur regional development

By Erin Voegele

Breaking Through the Bottleneck

Making It Work in the Midwest

26

BIOLOGY

The Strength of the Strain

New, productive algae varieties hold powerful promise

By Luke Geiver

RESEARCH

Making History

The revival of NREL’s groundbreaking algae program

By Erin Voegele

Contents DEPARTMENTS 4

Editor’s Note

The New Era

By Ron Kotrba

6 NAABB

8

Overview of NAABB’s Algal Biofuels Consortium

By Jose A. Olivares

ABO

Not Your Father’s Algae

By Mary Rosenthal

9

Events Calendar

10 Legal

Commercialization of Algae Projects: Hurdles Remain

By Anna J. Wildeman

11 NAA

The Time for Commercialization is Now

By Barry Cohen

30

InSIdE: PROJECT SCALE AND RISK; AND ALGAE CO2 PROJECTS

spring 2011

The

Strength of the Strain

Co-location

CO2 and Algae Projects

By Sam A. Rushing

People, Partnerships & Deals

Page 22

PluS

Breaking Through the Bottleneck Page 14

Making Algae Work in the Midwest Page 18

And

NREL Algae Program Revival

32

Page 26

12 Business Briefs

Efforts in Algal Strain Selection Pay Off

www.biorefiningmagazine.com/algae-technology-business

Scale

Algae Project Scale and Risk

By Mark J. Hanson

ON THE COVER: A Targeted Growth researcher works on an algae strain characterized to have a “beer belly,” or an algal cell with an enormous amount of lipid for industrial needs.

spring 2011 | 3

editor’s note

Welcome to the inaugural issue of Algae Technology & Business. For years now, specifically in publications such as Biodiesel Magazine,

New Era Ron Kotrba, Editor rkotrba@bbiinternational.com

which I have been a part of for more than six years as a writer, senior writer and lead editor, anything related to algae has been hot and highly read on the websites.

Interest in algae has not subsided. In fact, it has increased during the past several years.

Our coverage of the developing world of algae is not exclusive to fuels, a sector garnering a lot of attention because of the profound need for energy independence and security, not to mention the environmental position that the Earth, and by extension all of our lives, would benefit from transition to a renewable, sustainable economy instead of one built on petroleum. But fuels are a high-volume, lowmargined business, and in order for the algae industry to mature to a point where it can profitably sustain an algal fuels economy, a series of developments—a growth process or maturation, if you will—must first be accomplished.

Interestingly, the petroleum industry makes its money on oil exploration and recovery, and crude oil is only refined into fuels and chemicals so that oil companies can market their main money maker, crude oil, to end users. Consumers consume the refined products, driving the need for more exploration and recovery. With finite oil reserves on the planet, this is clearly not a sustainable model—but it does represent industry maturity.

Thus, much algae work focuses on scale-up so that, one day, the industry can get to the point of development where refining algae into animal feed, pharmaceutical and nutraceutical products, intermediate and end-product chemicals and, yes, fuels, is simply a way to market algae to consumers. We are not there yet, but with the help of companies and organizations such as those you’ll come across in this issue, one day we will.

for more news, information and perspective, visit THE ALGALSPHERE BLOG AT BIOREFININGMAGAZINE.COM/BLOG/READ/ALGALSPHERE

ASSOCIATE EDITORS

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4|

Bryan Sims talks to algae industrialists and uncovers how investors in algae decide where to place their bets in “Breaking Through the Bottleneck” on page 14.

Luke Geiver delves into the importance and power of algae strain selection, and efforts in that direction, in his article, “The Strength of the Strain,” on page 22.

Erin Voegele covers the revival of the National Renewable Energy Lab’s algae program, which stalled out more than a decade ago, in “Making History” on page 26.

EDITORIAL

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EDITOR Ron Kotrba rkotrba@bbiinternational.com ASSOCIATE EDITORS Erin Voegele evoegele@bbiinternational.com Luke Geiver lgeiver@bbiinternational.com Bryan Sims bsims@bbiinternational.com COPY EDITOR Jan Tellmann jtellmann@bbiinternational.com

ART ART DIRECTOR Jaci Satterlund jsatterlund@bbiinternational.com graphic designer Erica Marquis emarquis@bbiinternational.com

PUBLISHING CHAIRMAN Mike Bryan mbryan@bbiinternational.com CEO Joe Bryan jbryan@bbiinternational.com VICE PRESIDENT Tom Bryan tbryan@bbiinternational.com

SALES VICE PRESIDENT, SALES & MARKETING Matthew Spoor mspoor@bbiinternational.com EXECUTIVE ACCOUNT MANAGER Howard Brockhouse hbrockhouse@bbiinternational.com SENIOR ACCOUNT MANAGER Jeremy Hanson jhanson@bbiinternational.com ACCOUNT MANAGERS Chip Shereck cshereck@bbiinternational.com Marty Steen msteen@bbiinternational.com Bob Brown bbrown@bbiinternational.com Andrea Anderson aanderson@bbiinternational.com Dave Austin daustin@bbiinternational.com CIRCULATION MANAGER Jessica Beaudry jbeaudry@bbiinternational.com SUBSCRIBER ACQUISITION MANAGER Jason Smith jsmith@bbiinternational.com ADVERTISING COORDINATOR Marla DeFoe mdefoe@bbiinternational.com Senior Marketing Manager John Nelson jnelson@bbiinternational.com

Please recycle this magazine and remove inserts or samples before recycling

TM

Customer Service Please call (866) 746-8385 or email us at service@bbiinternational.com. Subscriptions to Algae Technology & Business are free of charge - distributed twice a year - to Biorefining Magazine and Biodiesel Magazine subscribers. To subscribe, visit www.biorefiningmagazine.com or you can send your mailing address and payment (checks made out to BBI International) to: Biorefining Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to (701) 746-5367. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at (866) 746-8385 or service@bbiinternational.com. Advertising Algae Technology & Business provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Algae Technology & Business advertising opportunities, please contact us at (866) 746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send Algae Technology & Business Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or e-mail to rkotrba@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

COPYRIGHT Š 2011 by BBI International

spring 2011 | 5

NAABB

Overview of NAABB’s Algal Biofuels Consortium

By José A. Olivares

T

here are a number of technical challenges and social and policy issues that need to be resolved before fossil fuels can be totally replaced. The algal biofuels consortium created by the U.S. DOE is working towards overcoming many of these technical challenges.

The National Alliance for Advanced Biofuels and Bioproducts was created in early 2009 through the association of 14 academic institutions, 12 industrial partners and two national laboratories, led by the Donald Danforth Plant Science Center in St. Louis.

NAABB partners believe that in order to make an impact on the algal biofuels industry, three major objectives must be addressed: The development of technologies for cost-effective production of algal biomass and lipid; development of economically viable fuels and coproducts; and provision of framework for a sustainable algal biofuels industry.

In September 2009, NAABB submitted a proposal to the DOE, which developed a holistic research program including discovery, development and demonstration pathways for algal biofuels. In January 2010, DOE Secretary Steven Chu announced NAABB’s award: as a public-private partnership, the NAABB will devote $49 million of federal funds along with about $20 million of cost-share commitments from its partners to the development of these objectives. The NAABB framework for a sustainable algal biofuels industry includes a research program in algal biology, cultivation, harvesting and lipid extraction, conversion into fuels and coproducts, enveloped by a sustainability modeling and analysis program.

Program Highlights $OJDH ,QGXVWU\ 8SGDWH NAABB’s algal biology program focuses on the development of strains of algae that 6|

have high biomass and lipid production performance and can be safely deployed.

The goal is to increase the overall productivity of algal biomass accumulation and lipid/ hydrocarbon content by mining the natural diversity of algal strains, and performing mutagenesis for increased lipid production.

Systems biology approaches for lipid production include knowledge gathered through genomics, proteomics, and transcriptomics of developmental and production algal strains.

The NAABB crop protection projects involve adaptive evolution and genetic modification of algae to develop desirable traits. This program maximizes yield through nutrient, ionomics, and metabolic regulation. Maximizing lipid production involves deep understanding of the lipid secretory and packaging systems in algae through transcriptomics and manipulation of these organisms through genetic modification. The work also involves maximizing hydrocarbon production of algae through regulation of the terpenoid pathways in algae.

The development of scalable cultivation practices in various environments is part of the NAABB concept. NAABB partners are exploring cultivation in arid, semi-arid, wet, and marine environments. New tools are being developed and used to measure productivities under climate conditions that simulate variations in light, air and pond temperatures for seasonal variations in different regions of the country, and are able to feed this information into robust models. This work will increase overall productivity by optimizing sustainable cultivation and production systems. Furthermore, NAABB is addressing methods for optimization of photobioreactors and open pond cultivation.

It is well accepted that the development of cost-effective, energy-efficient harvesting and lipid extraction technologies will make

a major impact to this industry. Therefore, NAABB is investing in the development of harvesting technologies using innovative acoustic focusing, electro- and chemical flocculation systems, and new materials concepts for traditional membranes. New lipid extraction technologies are being worked on that involve innovations in acoustics, mesoporous nanomaterials and amphiphilic solvents.

The development of cost-effective, dropin transportation fuels from algae is the key goal. NAABB is developing technologies to convert lipids/hydrocarbons and biomass residues into useful fuels. The program involves understanding the physical and chemical properties of algal biofuels and their thermophysical and transport properties. NAABB is developing lipid conversion to fuels via catalytic decarboxylation and deoxygenation, and catalytic and supercritical transesterification.

The biomass conversion program involves catalytic gasification, thermochemical gasification and power generation, fast pyrolysis and hydroprocessing, and anaerobic fermentation to organic acids and gasoline products.

The coproduct development program can add profitability and flexibility to the industry, as biofuels markets develop. Developing agricultural coproducts for livestock and mariculture feed includes the production of lipid-extracted micro- and macroalgae (LEA), testing the nutritional content of LEA, live animal and mariculture studies, and the development of processes that will lead to certification of LEA feeds. The program also involves the development of synthetic natural gas production, thermal energy from LEA, and bioplastics from proteins and lipids and feedstocks for the fertilizer industry.

The overall success of the algal biofuels industry is dependent on the development of sustainable practices that are energy efficient, environmentally friendly and economically viable. To do this, NAABB is quantitatively assessing the energy, environment, economic viability and sustainability of algal biofuels processes through economic analysis and models, global analysis, and life-cycle and process analysis. This will lead to appropriate resource management, including carbon dioxide, nutrients, water and land.

Author: José A. Olivares Executive Director, NAABB (505) 663-5210 olivares@lanl.gov

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spring 2011 | 7

abo

Not Your Father’s Algae

By Mary Rosenthal

T

hose of us of a certain vintage will remember an advertising slogan from years ago that told viewers “this is not your father’s Oldsmobile.” The progress the U.S. algae industry has made in just the past five years reminds me of that slogan—the algae technology today is vastly different from the U.S. DOE’s Aquatic Species Program of the 1970s and 1980s. This is not your father’s algae.

As the contents of this issue make quite clear, two separate but closely related trends make this an especially exciting time to be involved in algae: one, the growth in the number of sustainable end products and applications for algae; and two, the continued integration of algae technologies up and down the industry value chain.

Certainly, the development of algaebased fuels will continue to be a major focus of our industry. The growth of this sector has been remarkable; between 2005 and 2009 alone, the number of algae-toenergy startups more than tripled. Algaebased fuels have been successfully tested in a range of engines and vehicle types, and there are numerous demonstrationand commercial-scale facilities coming online in the next two years. Commercial production of algae-based transportation fuels is real, and it will happen sooner than many people think.

$OJDH ,QGXVWU\ 8SGDWH

8|

At the same time, a growing number of companies are exploring other algae end products and applications. This includes the production of algal biomass for both human and animal nutrition, including nutraceuticals. As the world seeks to increase global food supplies to meet demands of a growing population, there is no doubt that algae will be an important part of the solution. Companies and researchers are also using algae as a source for a range of other highvalue bioproducts, including bioplastics, cosmetics, biochemicals, and pigments, to name just a few.

As you will also read in this issue, the unique ability of algae to biologically sequester and beneficially reuse carbon means that algae technologies are being deployed to help large-scale emitters address their carbon footprint. What many see from a process perspective as a waste stream—that is to say, carbon emissions— the algae industry sees as a high-value input in the production process. The colocation of algae production facilities with industrial emitters is a trend sure to stay.

While the number of products and applications for algae are continuing to expand, researchers, entrepreneurs and companies are finding ways to integrate the industry’s multifaceted value chain.

Many companies remain focused on algal biology, working to identify and in some cases enhance strains with defined yield characteristics and profiles, depending on the desired end products. Others remain focused solely on growth systems, whether autotrophic, heterotrophic, open or closed, indoors or outdoors. Still more are working hard on extraction and

dewatering systems that are central to improving the overall economics of algae production. And a few are working on technologies in which algae directly secrete advanced biofuels.

And then there is the crucial component: a growing awareness among potential end users—from the U.S. Department of Defense to industrial emitters to food companies—of the potential of algae-based technologies and end products. This awareness is something we have worked hard to foster and will continue to do so. As companies begin to form strategic partnerships and identify mutual opportunities, it will further drive the industry’s growth.

Moving forward, look for these two important trends to continue: a growing range of end products and applications for algae, with the technologies to produce them becoming more closely tied together.

And that is something that bodes well for the future.

Author: Mary Rosenthal Executive Director, Algal Biomass Organization (763) 458-0068 mrosenthal@algalbiomass.org

events calendar

International Biorefining Conference & Trade Show

September 14-16, 2011

Hilton Americas – Houston | Houston, Texas The International Biorefining Conference & Trade Show brings together agricultural, forestry, waste, and petrochemical professionals to explore the value-added opportunities awaiting them and their organizations within the quickly maturing biorefining industry. Speaker abstracts are now being accepted online.

(866)746-8385 | www.biorefiningconference.com

Northeast Biomass Conference & Trade Show

October 11-13, 2011

Algae Summit in the Land of 10,000 Lakes 10/25

What more appropriate place is there for a conference about an aquatic feedstock like algae than Minnesota, the Land of 10,000 Lakes? The 5th annual Algae Biomass Summit will take place October 25-27 at the Hyatt Regency in Minneapolis. This event unites industry professionals from all sectors of the world’s algae utilization industries including financing, algal ecology, genetic systems, carbon partitioning, engineering and analysis, biofuels, animal feeds, fertilizers, bioplastics, supplements, foods and more.

Organized by the Algae Biomass Organization and coproduced by BBI International, this event brings current and future producers of biobased products and energy together with algae crop growers, municipal leaders, technology providers, equipment manufacturers, project developers, investors and policy makers. The event is considered a world-leading educational and networking junction for all algae industries.

Educational tracks at the event focus on biology, engineering, analysis, commercial activities, policy and financing; but education is only one of several reasons to go. The summit is where future and existing producers of algae products go to network with other industry suppliers and technology providers. It’s where project developers converse with utility executives; where researchers and technology developers network with venture capitalists; and where Fortune 500 executives and influential policy makers sit side-by-side with project developers.

The event is the largest, fastest-growing algae conference of its kind. In 2011, this event is expected to draw nearly 900 attendees and exceed the previous year’s attendance by almost 20 percent. This growth is powered by the current strength of the industry and the positive outlook for future algae producers.

The summit will help you—algae industry stakeholders—identify and evaluate technical and economic solutions that fit your operation. Get your plane ticket, reserve your hotel room and register for the conference today.

spring 2011 | 9

Westin Place Hotel | Pittsburgh, Pennsylvania With an exclusive focus on biomass utilization in the Northeast—from Maryland to Maine—the Northeast Biomass Conference & Trade Show will connect current and future producers of biomass-derived electricity, industrial heat and power, and advanced biofuels, with waste generators, aggregators, growers, municipal leaders, utilities, technology providers, equipment manufacturers, investors and policymakers. Speaker abstracts are now being accepted online.

(866)746-8385 | www.biomassconference.com/northeast

Algae Biomass Summit

October 25-27, 2011

Hyatt Regency Minneapolis | Minneapolis, Minnesota Organized by the Algae Biomass Organization and coproduced by BBI International, this event brings current and future producers of biobased products and energy together with algae crop growers, municipal leaders, technology providers, equipment manufacturers, project developers, investors and policy makers. It’s a true one-stop shop—the world’s premier educational and networking junction for all algae industries.

(866)746-8385 | www.algaebiomasssummit.org

Southeast Biomass Conference & Trade Show

November 1-3, 2011

Hyatt Regency Atlanta | Atlanta, Georgia With an exclusive focus on biomass utilization in the Southeast—from the Virginias to Gulf Coast—the Southeast Biomass Conference & Trade Show will include more than 60 speakers within four tracks: Electricity Generation; Industrial Heat and Power; Biorefining; and Biomass Project Development and Finance.

(866)746-8385 | www.biomassconference.com/southeast spring 2011 | 9

legal

Commercialization of Algae Projects: Hurdles Remain

By Anna J. Wildeman

A

lgae-based biofuels remain one of the most promising opportunities for domestic development of sustainable renewable fuels. Several hurdles remain, however, including the lack of demonstrated projects, the need for large equity investors and waning public support for the use of government incentives to promote alternative fuel development.

Laboratory- and pilot-scale algaebased biofuels projects have long promised high yield-per-acre production numbers compared to those of first-generation ethanol production, but without the environmental footprint, consumptive water use or perceived competition with food supplies. Algae-based biofuel production is not only less resource-intense, it actually requires the consumption carbon dioxide, the most prolific of the so-called greenhouse gases and the recent target of the U.S. EPA’s new regulatory and air permitting agenda. This element promises a potentially symbiotic partnership with some of the largest carbon dioxide sources and some of the most innovative technological advancements of our time. Promises and potentials aside, the challenge now is to bring those opportunities to bear in commercial-scale production facilities.

The challenges are many. To realize commercial-scale, algae-based biofuel production, a company needs strong investors, proven and bankable technology, an effective business development and deployment plan and the intellectual property portfolio to demonstrate its ability to develop and protect its technology. $OJDH ,QGXVWU\ 8SGDWH

10 |

A number of developers have brought algae-based biofuels to pilot-scale, but far fewer are on the verge of commercialscale production. Companies thought to have the greatest opportunity to produce at commercial scale in the near-term are those that have partnered with large, private investors and traditionally petroleum-based fuel producers. Petrol-based producers have a unique opportunity to invest in biofuels, have more access to necessary infrastructure and are more likely to invest in drop-in, fungible fuels that can be used in existing infrastructure and engines, as opposed to the ethanol- and biodiesel-blended fuels.

To date, almost all of the major petroleum-based fuel producers, including Chevron, ExxonMobil, BP and Royal Dutch Shell, have partnered with investors to promote the development of algae-based biofuels. In February, however, Royal Dutch Shell announced that it was pulling the plug on its algae investment to focus on other alternative technologies. That move does not appear to have shaken the algae industry and proponents remain confident of the biofuel’s long-term success. Algae developers have also enjoyed significant attention from the aviation-fuel sector, as a number of major airlines have entered into off-take agreements with producers. The U.S. Navy continues to conduct test flights in an attempt to reach its stated goal of buying 336 million gallons of biofuel a year by 2020. Despite these successes, continued economic and political uncertainty present significant barriers to the domestic commercialization of algae-based biofuels.

At the time this article was drafted, President Obama had just presented to Congress a proposed budget that included

$8 billion in federal expenditures for renewable energy project research and development and financing support, while calling for significant cuts in tax breaks for the oil industry, amounting to $46 billion in cuts over the next 10 years. At the same time, Republican members of the House of Representatives have introduced continuing budget amendments that would significantly curtail incentives for the domestic development and production of biofuels; specifically, the Republican amendment currently being considered would eliminate funding for the DOE loan guarantee programs, which have helped fund numerous alternative fuels development projects, and would significantly curtail EPA’s ability to implement its renewable fuel program, a significant driver for the research and development of alternative fuels.

Internationally, continued unrest in the major oil-producing countries in the Middle East—witness the uprisings in Egypt and Libya—have driven up oil prices, providing the biofuels industry with an opportunity to grow since oil price increases drive increases in feedstock prices and overall energy costs. What this all means for the future of commercialization of advanced biofuels such as algae is unclear. What is clear is that market forces in the near-term are more likely to determine winners and losers than will policy developments.

Author: Anna J. Wildeman Attorney, Michael Best & Friedrich (608) 283-0109 ajwildeman@michaelbest.com

NAA

The Time for Commercialization is Now

By Barry Cohen

A

lgae is feedstock, a solution for national security, the environment and our economy. It is one of several solutions that have been proven capable of providing a new range of biofuels that can help reduce U.S. dependency on foreign oil while creating green jobs in America. “Their high oil and biomass yields, widespread availability, absent (or very reduced) competition with agricultural land, high quality and versatility of the byproducts, their efficient use as a mean to capture CO2 and their suitability for wastewater treatments and other industrial plants make algal and aquatic biomass one of the most promising and attractive renewable sources for a fully sustainable and low-carbon economy portfolio,” states the European Algae Biomass Association. “Algae have the potential to produce considerably greater amounts of biomass and lipids per hectare than terrestrial biomass, and can be cultivated on marginal lands, so [it] does not compete with food or other crops.

Algae can be cultivated photosynthetically using sunlight for energy and carbon dioxide as a carbon source. They may be grown in shallow lagoons or raceway ponds on marginal land or closed ponds.”

The problem in the emerging biofuels industry is not lack of research or technology. One issue that has resulted from 50-plus years of government-funded research is that the researchers are trying to either find or create the “perfect” algae

before going into production. What they do not realize—or choose to ignore—is the fact that you may not be able to replicate on a commercial-scale what you can create in a laboratory. We know what works well now. Why should we waste another 10 years waiting for some lab to decide that its species is the best of the best, and the years of arguments that are sure to follow, when we could be scaling up production now and deciding which is best later? After all, according to the U.S. DOE, this is a $66 billion dollar industry.

There is plenty of room for a lot of different strains.

The problem is that there is not enough feedstock to test the existing technologies at commercial-scale, let alone enough to supply the biorefineries. My biorefinery contacts all said the same thing: they cannot secure enough feedstock to make their operations profitable.

Potential oil yields from certain algae strains are projected to be at least 60 times higher than from soybeans, approximately 15 times more productive than jatropha and approximately five times that of oil palm per acre of land on an annual basis (Rodolfi et al., 2009). For example, soybeans can produce 48 gallons per acre per year, while algae can produce 1,000 to 5,000 gallons per acre per year, according to the DOE’s Algal Biofuels Roadmap. So why are we not producing more algae?

Algae has emerged as one of the lowest-cost feedstocks for the biofuels and cellulosic industries. It is considered to be a promising source of renewable oil that can be processed and refined into a variety of transportation fuels. Recent breakthroughs in raceway pond development and closed

end loop systems put algae oil production companies on the leading-edge of the renewable oil industry. All we need is a little equity investment funding and our pre-laid plans will take care of the rest.

If biofuels are going to the marketplace, that move will likely be driven by the private sector. But care must also be taken to prevent this from becoming another dot-com investment fiasco. When I read business plans and public filings, and talk to potential investors, I always ask the same question: “Do you have feedstock supply contracts?”

Without feedstock, you cannot make oil, and without oil, we will never reduce our dependence on foreign oil. What we might do is replace our dependence on OPEC oil with that of other countries.

When Boeing announced its partnership with U.S. government agencies and Chinese research institutions and state companies including Air China Ltd. and PetroChina Ltd., a Boeing official was asked why the initiative was taking place in China rather than in the U.S. His response was that “they’ve made the decision to move faster” (Canadian Business, May 26, 2010). U.S. equipment manufacturers are forced to seek international markets because that it where they can earn revenues. We as Americans cannot afford to allow that to happen.

Author: Barry Cohen Executive Director, National Algae Association (936) 321-1125

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business briefs People, Partnerships & Deals

Members of the Algal Biomass Organization went to Washington in April for a twoday fly-in visit with members of Congress on Capitol Hill to drive home the message of job creation, and technology and feedstock parity.

Executive Director Mary Rosenthal says the algae industry will play a significant role in growing the U.S. economy.

Rosenthal estimated there are currently more than 60 universities in 41 states that have research activities involving algae.

“Right now, we feel that algae employs, either directly or indirectly, more than 20,000 workers at approximately 100 companies,” she says.

“As the industry matures, based on a study we did in 2010, we expect that this industry could employ more than 200,000 skilled workers by 2022.” Rosenthal says the ABO was adamant about algae’s inclusion as part of the cellulosic biofuel carve-out in the RFS2 and that it receives the same $1.01 per gallon cellulosic biofuel production tax credit. Additionally, the ABO advocated continued funding from the DOE, defense department and USDA to continue not only R&D developments today, but also to further scale-up efforts towards commercialization. The ABO visit consisted of more than 40 meetings with various members of Congress.

PetroAlgae has formed a partnership to upgrade the Melbourne, Fla.-based company’s algae oil technology, and the upgrade comes from known, traditional methods: catalysts.

Through a new agreement with Haldor Topsoe A/S and its U.S. subsidiary Haldor Topsoe Inc., PetroAlgae will now use catalysts provided from the subsidiary’s Houston headquarters to enhance the oils produced through its algae refining process that includes coking and pyrolysis. The agreement will also allow PetroAlgae to test the algae biomass produced from its system in refinery cokers and “validate the commercial viability” of the process according $OJDH ,QGXVWU\ 8SGDWH to John Scott, chairman of PetroAlgae. In a statement on the partnership, Niels Sorenson, 12 |

CEO for Haldor Topsoe A/S, touts the ability of PetroAlgae to produce at a cost-competitive level compared to fossil fuels, adding that “Haldor Topsoe is committed to renewable fuels and we are excited about implementing projects that will help reach the goals set for renewable fuels around the world.”

Atlanta is the new home for an Australia-based algae developer’s photobioreactor manufacturing facility. The 18,000 square foot plant will fabricate Algae.Tec’s algae production system that is based on readily available technology, according to Peter Hatfull, managing director for the company. Hatfull spoke with Algae Technology & Business about the new plant and the company’s establishment of a level-one American Depository Receipt Program that will allow Americans to buy stock in the company during his North American tour.

Hatfull says, “The nice thing about the technology is that we are using a relatively standard 40-foot shipping container, which is available just about anywhere.” The Algae.Tec platform is based around a controlled environment within the shipping container that maximizes surface area and sunlight penetration, allowing the algae to grow. The systems are suited for carbon capture and algae oil production, the company says. Hatfull explains that all of the cost estimates have been for a 500-module system, which he says is a relatively small plant.

“If we look at a 500-module plant, the capital cost for putting that together, everything from light collectors, CO2 collectors and engineering costs, is about $64 million.” He says each module is about $125,000.

Morrisville, Penn.-based BARD Holdings Inc. recently announced its shift from research and development to the commercialization phase of its algae production technol-

ogy. According to Avery Hong, BARD’s chief global strategist, the company has completed the first phase of its production rollout. Its initial facility, located in Morrisville, is expected to produce approximately 40,000 gallons of algae oil per year. “We are a photobioreactor-based company,” Hong says. “We’re using photobioreactor tubes and we’re using an artificial light source as the light energy.” The system is able to operate 24-7, he says, and the closed-loop system also mitigates problems associated with contamination and culture crashes. In fact, Hong notes that BARD has yet to experience a culture crash, and expects that track record to continue. In addition, the system is scalable and modular, and units can be brought online with a relatively short lead time, partly because the photobioreactor equipment can be installed in existing industrial spaces such as unutilized warehouses. Hong has ambitious expansion goals. “Our production schedule is to get significant [capacity] up and running in 2011,” he says. “BARD’s expansion schedule is not a mid-decade [timeframe].” Rather, plans are already underway to bring capacity online as soon as possible. By late summer, BARD has plans to be operating a second production facility, which will feature 280,000 to 300,000 additional gallons of algae oil production.

Ft. Collins, Colo.-based integrated algal technology developer Solix Biofuels Inc. has secured $16 million from inside investors as part of a Series B finance round. Bohemian Ventures, The Southern Ute Alternative Energy Fund and I2BF Global Ventures all participated in the round. In conjunction with the financing, Solix changed its name to Solix BioSystems to better reflect its role as a leading provider of algal production systems.

According to Joanna Money, vice president of business development for Solix, the new

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funding will help drive the commercialization of the company’s trademarked algae growth system—or AGS—which utilizes Solix’s proprietary, high-productivity photobioreactors.

Additionally, Money told Algae Technology & Business that the impetus behind Solix’s name change is aimed towards a customer base that may be interested in deploying its technology within a build/operate model. Since 2008, Solix has successfully demonstrated the viability of its AGS technology at its pilot facility in Ft. Collins. In 2009, Solix successfully scaled its AGS technology at its Coyote Gulch demonstration plant near Durango, Colo., which features three algae cultivation basins on three-quarters of an acre. The plant has more than 150,000 liters of algae under cultivation, according to the company. In 2010, Solix produced 3,000 gallons of algae oil per acre per year in its Lumian AGS4000, according the company, and has cultivated algae continuously in its Lumian AGS for 3 years with no culture crashes.

James Liao, professor of chemical and biomolecular engineering at UCLA, has developed an algae process for biorefining that, when compared to current process methods focused on lipid extraction, is just the opposite.

Liao and his team from UCLA published their findings after three years of work, and he explained to Algae Technology & Business what they found during their research. “Basically,” he says, “we’ve developed a technology that can use protein as a raw material for a biorefinery, and for making biofuels.” The way people are currently utilizing algae is by artificially starving the algae to induce the strains to produce lipids, which will eventually be extracted and used as oil for biofuels. In this process, Liao explains, the algae species become sick and

don’t grow as well or as fast as they otherwise may. “We reasoned that if we could use proteins as a resource instead of lipids,” he says, “we could bypass many of these difficulties.”

Liao believes his approach to algae benefits from the fact that certain proteins that cannot be used for food are the main components in photosynthesis and carbon dioxide fixation.

“The protein is a machine that harvests the energy that fixates the CO2,” he says. “So if you want a cell to grow fast, you need the cell to have a lot of proteins. If we want the cell to fixate a lot of CO2, to grow very fast, to fixate a lot of sunlight, the cell needs a lot of proteins to do the job.”

Monsanto Co. is entering the algae business after announcing a collaborative effort with Sapphire Energy to utilize Sapphire’s algae research abilities. Monsanto hopes to discover genes that could potentially increase crop yield or reduce crop stress in one of its core products, corn, cotton or soybeans. The new algae venture is a first for Monsanto, Kelli Powers of Monsanto’s public affairs department tells Algae Technology & Business. “For us, we have a pipeline and obviously that first step in our pipeline is discovery,” Powers says. “We see algae research that Sapphire is doing as a promising tool to screen genes early in that discovery process and to identify promising traits that could help with yield and stress.”

The research efforts will take place at one of Sapphire’s New Mexico locations, and according to Powers the work will begin right away.

Robb Fraley, Monsanto’s chief technology officer, says the research will help the agricultural developer find promising genes faster, and the two companies “face a common goal in looking for ways to improve upon an organism’s ability to achieve greater productivity under optimal and suboptimal environmental condi-

tions.” For Sapphire, the announcement with Monsanto comes only a week after the company was listed by the Wall Street Journal as one of the top 10 most promising clean technology companies.

California-based Aurora Algae has completed construction on its demonstrationscale facility in Western Australia. According to Scott McDonald, Aurora Algae’s chief financial officer, the facility is currently undergoing commissioning and inoculation, and is scheduled to be fully operational by the end of March. The company has also established new corporate headquarters in Hayward, Calif. CEO Greg Bafalis says, “Our new facilities in Hayward and Australia were completed ahead of schedule and under budget, accelerating our ability to support and drive our initial customer and partner engagements. The combination of our proprietary algae strains and production process, combined with the ideal growing conditions of Western Australia, will fundamentally change the economics of algae production.” Aurora Algae’s technology is focused on the use of open raceway ponds to cultivate algae. According to McDonald, the company’s ponds have been specifically designed to be energy efficient, thereby increasing the economical feasibility of algae production. “A lot of it has to do with fluid dynamics,” he says. “And, being able to do that in an energy efficient way. A primary cost of operating open ponds is the movement of water…which requires power. The fluid dynamics and the way [our] raceways are constructed allow for less consumption of energy.” The Australian demo includes six one-acre raceway ponds, four 400-square meter ponds, and four 50-square meter ponds.

Share your industry briefs To be included in Business Briefs, send information (including photos and logos if available) to: Industry Briefs, Algae Technology & Business, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also fax information to (701) 746-8385, or e-mail it to rkotrba@ bbiinternational.com. Please include your name and telephone number in all correspondence.

spring 2011 | 13

industry

Fever Pitch OriginOil Inc. President and CEO Riggs Eckelberry discusses how the company’s patented Single-Step Extraction technology works to attendees during the unveiling of the company’s pilot plant in January 2010 at its Los Angeles headquarters.

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PHOTO: ORIGINOIL INC.

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industry

Breaking Through

The

Addressing shortcomings in algae industry development to spur commercial advancement

By Bryan Sims

Like links in a chain, companies in the algae industry—from early-stage operations developing harvesting methods to government-funded research seeking the best algae strains for optimal growth rates and oil yields—each, inevitably, relies on the other’s strengths to reach the ultimate goal: efficiently and economically producing algae-derived bioproducts at commercial scale and a positive return on investment. It’s this inherent, interdependent nature that will ultimately drive commercial success, says Andrew Soare, research associate for Lux Research Inc. “The work that you do upstream has to lead directly into, parallel and really integrate with the work that you do downstream,” Soare tells Algae Technology & Business. “For example, if I’m developing an algae strain, I need to know what target product I’m going to make, how I’m going to extract it, how I’m going to cultivate the algae and so forth. On the flipside, the downstream people need to know what types of strains they’re working with, if they’re genetically modified, native or non-native algae species and so on.”

spring 2011 | 15

industry

As with any emerging industry, being able to address areas that are deficient within the algae value chain will become paramount for achieving economies of scale. One of the most glaring deficiencies lies in how funding (private, public or federal monies) will be needed to help R&D and early-stage algae development companies break out of perpetual fund-raising mode. Simply being able to grow algae is a challenge in itself, but financial challenges, such as short timelines prescribed by venture capitalists, limited private investment for R&D coupled with the high capital cost of building or purchasing expensive equipment for incubating, dewatering or harvesting, can be a tall order for

PHOTO: HR BIOPETROLEUM

Sayre also serves as chief scientist with The National Alliance for Advanced Biofuels and Bioproducts, and is a principal investigator/project coordinator of the Center for Advanced Biofuel Systems as well as chief technology officer for Phycal LLC, a startup biotech outfit developing microalgae-based carbon capture and biofuel production systems.

“It’s taking the technology to the next level where I think most companies are struggling,” Sayre says. “The issue that keeps coming up over and over again from the investor community is that they’re not ready to commit funding or take on the risk for technologies that may require between five and 10 years to reach maturity.”

This is particularly true for Scipio Biofuels Inc., an early stage algae R&D firm headquartered in Orange County, Calif., lending credence to the fact that obtaining funding to prove the technology for going commercial Mixed Signals The pilot facility in Hawaii is owned and operated by Cellana Inc., formerly a joint venture between Royal Dutch Shell and HR BioPetroleum. Shell may be easier said divested its stake in late January and has some wondering if it’s a signal that oil majors than done. Achave refocused their attention on algae to other feedstocks. cording to Matt any algae developer to overcome in the lab Snyder, president and CEO, the company or in pilot-scale. Availability of federal funds has developed a novel, continuous flow syswill likely continue to play a critical role in tem that employs closed-sealed photobioresupporting basic research on fundamental actor cultivation equipment. The company and applied sciences, particularly for algae- designed a prototype unit packaged with derived biofuels. additional features, including formulated “I’d say the hard- and “species optimized” algae, pumps and est thing right now for harvesting techniques, that can be integrated the industry is to actu- with existing algae cultivation sites or biofuel ally get the investment plants. After exhausting in-house and other community to sup- performance test requirements of the techport the development nology, Snyder says he’s ready to take it to the of the industry,” says next level. But, there’s one problem.

Richard Sayre, direc“Proof testing costs $300,000 because Strengthening tor of the Enterprise of third-party proof fees,” Snyder says. “If the Chain Investor confidence in the algae Rent-A-Car Institute we had this third-party certification of our industry is key for for Renewable Fuels at productivity, we would be able to have a driving fundamental $OJDH ,QGXVWU\ 8SGDWH and applied sciences in the Donald Danforth take-up contract for a facility in less than a the algae value chain, Plant Science Center week.” says Richard Sayre with the DDPSC. located in St. Louis.

For venture capital firms like Redwood 16 |

Shores, Calif.-based Gabriel Venture Partners, the decision to invest in the algae industry wasn’t a preemptive one, according to partner Jim Long. Gabriel VenTaking a Chance ture Partners is back- Gabriel Venture ing Haywood-based Partners’ Jim Long says if its current Aurora Algae, a verti- algae investments are cally-integrated algae successful, more will development com- come. pany that recently completed construction of a demonstration-scale facility in Western Australia. Aurora received a $2 million grant from the Australian government under its Low Emissions Energy Development Fund to support the project. Aurora’s technology features open raceway ponds that cultivate algae. The company’s demonstration facility in Australia includes six one-acre raceway ponds, four 400-square-meter ponds and four 50-square-meter ponds. Long says Gabriel Venture Partners performed its due diligence and firmly believes Aurora will pay dividends someday.

“The reason Gabriel invested in algae is because we know if companies like Aurora Algae are successful then that will open up investments in either technology companies that help the various areas of the algal supply chain, or niche companies that may specialize in algae for wastewater plants, power generation and so forth,” Long says. “In our minds, if algae turns out to be successful, Gabriel probably makes another four or five more investments in algae down Downstream the road.”

Optimization The While additional extraction step is one funding will be re- of the most costprohibitive stages quired to refine and to be addressed, enhance all stages of says Andrew Soare, research associate for the algae supply chain, Lux Research Inc. there are a few areas where most of the funding should go for further development. One of those, according to Soare, is the extraction step.

“That part of the whole value chain is definitely the most important and the key

industry

technologies are ones that can circumvent those extraction cost issues,” he says.

Synergies Rule

PHOTO: DONALD DANFORTH PLANT SCIENCE CENTER

The expression “there’s more than one way to skin a cat” applies to many things but but perhaps none more than the algae industry. Every company brings its own unique approach to how it intends to contribute towards commercialization of the sector.

And every one of them holds a unique set of skills, technologies, business savvy and financial-backing. Some, like Aurora Algae, are employing a vertically integrated—or “total solution”—model to capture and develop the entire algae supply chain. Likewise, some are focused on developing one or two aspects of the entire chain in hopes of linking up with the higher class of midstream partners for business opportunities. Nevertheless, one thing is certain. As fragmented as the industry may be with vastly different processes, the gap between all of them could be closed if more “best-to-breed” offerings are available, according to Riggs Eckelberry, CEO of Los Angeles-based OriginOil Inc. “The growth and harvest processes both need to become continuous end-to-end processes with all the vendors integrating with each other,” Eckelberry says. “We’ve got to start integrating and putting those in place, whether they’re venture agreements, OEM deals, private labeling, alliances or just product alliances that agree to recommend each other. The work has to be done to sort

of dovetail all these processes into each other.”

Like other midstream algal technology developers, OriginOil is finding that the algae industry is collectively waiting for bona fide end-users of various technology to Attention to Detail OriginOil lab coordinator Megan Harris makes an algae observation emerge, what Eckelwhile the Helix BioReactor V2.2 operates in foreground. berry calls “system PHOTO: ORIGINOIL INC. integrators” who are capable of deploying the technology for the progressively larger installations. Subject to construction and operation of commercial the success of the initial test phase, which is algae production plants. While OriginOil’s underway, MBD will purchase significantly business strategy has always been rooted in larger systems to serve its power station projproviding the technology rather than produc- ects in Australia, beginning with a 1-hectare ing algae, the company originally considered pilot plant at Tarong Power Station in South manufacturing its own algae-derived prod- Eastern Queensland and expanding to full ucts, according to Eckelberry. The company production sites at all three of MBD’s power has since steered away from that strategy station projects in Australia. Each of MBD instead relying on establishing relationships Energy’s power station projects, according with commercial partners, such as Australia- to the company, has the potential to grow to based mining company MBD Energy Ltd., 80-hectare commercial plants, each capable which agreed to deploy OriginOil’s algae-to- of producing 11 million liters of oil (2.9 oil technology. million gallons) for plastics and transportaLast year, OriginOil entered into a tion fuel, including 25,000 metric tons of strategic partnership agreement with MBD drought-proof animal feed annually.

Energy on a multi-phase commercializaAccording to Eckelberry, OriginOil’s tion program. Specifically, the agreement new strategy is to speak directly to customcalls for OriginOil to supply MBD Energy ers, adding that it plans to pursue distribution with its algae-to-oil technology platform in agreements with companies like MBD that have global sales networks. He also predicted out-licensing agreements to put noncore technologies to work for specialized companies, while retaining usage rights for its own direct customer base.

“We believe there are enough wellfunded algae technology end-users emerging at our rate of commercial development,” Eckelberry says. “The deal flow of genuinely funded companies is increasing at a rate that is pretty sustainable for us. We’re pretty happy with how the market is coming into being at the same time as our technology is evolving.”

Culture Club High light experiments are conducted at the Donald Danforth Plant Science Center in St. Louis, including LHC- and LHC+ cultures and an 18-liter photo bioreactor containing a high light strain.

Author: Bryan Sims Associate Editor, Algae Technology & Business (701) 738-4974 bsims@bbiinternational.com

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region

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region

Making it Work in the Midwest A new research and development center in Ohio helps spur the development of a regional algae industry

By Erin Voegele

Ohio isn’t the first place that comes to mind when the topic is algae. Traditionally, the Southwest has been the the focal point for algae projects under

Creating Cultures Algaeventure Systems lab technician Coady DiRutingliano works with algae cultures used for testing the company’s systems.

PHOTO: ALGAEVENTURE SYSTEMS INC.

development, but that is about to change. The Center for Algal Engineering Research and Commercialization under development at the University of Toledo is focusing attention on the potential for algae cultivation in the Midwest.

The center was recently awarded a $3 million grant through the Ohio Third Frontier Wright Projects Program, which funds projects that provide cutting edge research activities within the state. The goal of the Third Frontier program is to support the development of new technologies or projects that ultimately benefit Ohio.

Work on the center, which will be located at the UT’s Scott Park Campus of Energy and Innovation, is already underway. According to Sridhar Viamajala, assistant professor of chemical and environmental engineering, the center is scheduled to be up and running in late May or early June.

Ohio University and UT collaborated on the Third Frontier grant application, Viamajala says. “We also had several industrial partners and projects [participate],” he adds.

“As a consortium we applied for this grant,” with both private partners and the university providing cost share.

Viamajala stresses that while the project will be housed at his university, it isn’t all about UT. “It’s actually a consortium of several public institutions, as well as private enterprises in the state of Ohio that are involved in the project,” he says, noting that both OU and UT have long, active histories in biofuel research, including work with algae.

“We applied for this grant with the intent to be able to develop R&D facilities at both universities, where it would not just be lab-based facilities,” but centers that go beyond lab development and bench-scale work. A primary goal of the center is to help members of industry complete larger-scale studies on algae technologies they are developing.

Many times members of industry have a great concept, but they might not know how to implement their idea and gather preliminary data that is necessary to secure grants and attract venture capital, Viamajala says. The new center will allow these companies an opportunity to collaborate with university researchers to validate their ideas.

“It’s a win-win situation for everyone to have a center like this, with infrastructure that can help with algae biofuels research,” he says.

spring 2011 | 19

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“The primary goal of the center is to provide the R&D infrastructure for the development of algal biofuels and bioproducts,” Viamajala says. The center itself will not only provide private companies with access to university researchers and experts, but will also allow them access to research infrastructure.

Many of the analytical instruments that are required for algae research are already housed at both UT and OU. “We have the core sciences facilities already, with a significant amount of science and research infrastructure available at both universities that are directly related and applicable to algae research,” Viamajala says. “In addition to that, we felt there was a need to actually buy, install and operate equipment that would be directly usable for this type of work, [essentially] trying to take the commercially-viable technolo-

PHOTO: ALGAEVENTURE SYSTEMS INC.

agreement. The site will also feature a greenhouse and approximately 3,000 square feet of lab space suitable for algae research. “We can have smaller indoor reactors for lab tests, and also have outdoor reactors, both within the greenhouse and outside,” which will allow for parallel testing activities, Viamajala says.

There are also plans to install downstream processing equipment at the center.

“We want to be able to go through the whole process of making fuel,” Viamajala says.

“There are several alternative routes to do that. In general, what we are trying to do is buy reactors that may be useful in converting the algae biomass into products, such as biodiesel.” There are also plans to investigate pyrolysis.

According to Viamajala, new startups are welcome to participate in the center, but he stresses that those companies should be aware that UT is not acting as a contract research facility. “Our intent is to work with industry to develop their ideas and our ideas together, so that future technology can be developed,” he says. “Anyone who has an interest who can share some of the costs associated with running their project is welcome to join, Transformative Technology Algae is pictured flaking from a pilot model system featuring Algaeventure Systems’ solid-liquid separation as long as they understand technology. that we are not a contract gies to a somewhat larger scale than bench- research agency.” or lab-scale.”

The center will feature both photobiore- Partnering for Success actors and raceway ponds. While they will not Algaeventure Systems Inc. (AVS) and be of commercial scale, Viamajala says they Algisys have already formed a relationship will be large enough to provide meaningful with UT and the center. While many algae data from a commercialization standpoint. companies are focused on the production of He estimates that the photobioreactors will fuels, AVS is primarily interested in the production of algae-based plastics, while Algisys likely be in the 4 liter to 500 liter range.

The photobioreactors featured at the site is working to produce omega-3 fatty acids, will not be designed by UT. Rather, Viamajala such as EPA. AVS is a spinoff of a company called says they will be either purchased from vendors or built from published plans. In addi- Univenture, which was interested in detion, companies participating in the center are veloping algae-based packaging materials. welcome to install their own equipment on- The company has since developed several site. “We’ll provide some utilities and hook- technologies to aid in algae production and ups, provide some monitoring, and things processing. One of the primary difficulties $OJDH ,QGXVWU\ 8SGDWH identified by AVS was dewatering. It’s like trylike that,” Viamajala says.

UT has donated half an acre of outdoor ing to remove food coloring from water, says space to the center as part of its cost share David Coho, AVS’ vice president of sales and 20 |

marketing. “Current technologies use a highenergy centrifuge to separate that, which is very expensive,” he continues. “Our team developed a solid-liquid separation technology” to dewater algae in a less energy intensive fashion. According to Coho, the technology received a merit award from the U.S. DOE’s ARPA-E program.

Since then, AVS has continued to develop technologies related to the growth and biology of algae, as well as the extraction of oils. “The major area we are focusing on is our REC technology, which is a rapid accumulation and concentration technology,” Coho says. The process essentially utilizes a nonchemical, nonmechanical flocculating material to accumulate and concentrate algae.

According to Coho, participation in the UT algae center will allow his company to access pilot-scale extraction and lipid characterization equipment that will help expedite development of AVS’ technologies. The center’s research staff also has expertise in finding high-value products and coproducts that can help support the commercialization of algae technologies. “High-value products and coproducts will help algae startups as we pay our way to stay in the game so we can get to the fuels,” he says.

Coho also notes that the center is proving to be beneficial to UT students. AVS’ relationship with the university has already led to the development of a student internship program that benefits students interested in algae. Our internship program has been highly successful, says Coho, noting that all of AVS’ interns are now employed full-time by the company.

AlgiSys has also begun collaborations with UT. We are really envisioning that UT will be a long-term partner on the R&D side of our business,” said Michael LoPresti, CEO and co-founder of AlgiSys. According to LoPresti, his company currently intends to enter the commercial space in 12 to 24 months. “We’re an innovative sustainable biotech company that specializes in the production of omega-3 fatty acids for heart health applications and products,” he says. “We are primarily focused on the harvesting of EPA from algae.”

AlgiSys intends to commercialize all aspect of algae cultivation, from growth to

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harvesting, and oil extraction. UT researchers have an area of focus around oil extraction, says Charles Roe, AlgiSys co-founder and chief technology officer. “Our partnership with [UT and Viamajala] is really a means to cut our costs significantly,” he adds, noting that the vast majority of AlgiSys’ work at the center is expected to focus on oil extraction.

The center offers us access to scientific expertise and equipment that will be beneficial to our company, he says.

A Midwest Focus

UT’s algal research center seems uniquely positioned to support the thriving Midwest algae industry. While the region might not be as widely known for its algae industry as the Southwest, Viamajala stresses that there are several factors that make Ohio and other Midwestern states uniquely suited to algae production.

There are several advantages of working in the Midwest, he says. First, and perhaps the most important, is water. The Midwest has ample supplies of water needed to grow algae. The region is also centrally located to

most fuel markets and distribution centers, and has a rich history in the manufacturing sector. “With the economic downturn, there are a lot of skilled workers and people who find themselves out of jobs,” Viamajala says.

“You wouldn’t necessarily have to train a lot of people. There is already a workforce available that could be employed in this region.”

Coho adds that the region also has a strong agricultural background.

We think that northern climates offer a lot of advantages over southern climates for algae production, Hummell says. Algae growth is a natural occurrence in this region, as evidenced by the enormous amount of algae present in our lakes and water systems, he points out.

While Viamajala notes there might be some seasonal limitations for growth, he says they shouldn’t be too severe. We would expect algae production to be less productive during the coldest few months of winter, he says. However, there should be at least 300 days of solid production each year. It’s also important to remember that not all areas of the Midwest have the same weather patterns,

he says. Many areas actually have relatively mild winters.

It’s clear that UT’s algae center is providing enormous benefits to local members of the algae industry. “We think that this center is a huge step forward with Ohio becoming a center for algal and clean water research,” Hummell says. “We have commercial companies that are in this space. Now we have the state’s engagement. By Ohio getting this center, they have really put a stake in the ground to try to keep some of the [university and private] talent here.”

“The algae industry is a very exciting industry to be in,” Roe says. “It’s in its early stages. It almost reminds me of when the internet was first getting off the ground. It took awhile and there were a lot of startup companies, some of which did well, and some of which did not. But, I really do think the algae industry has a very bright future.”

Author: Erin Voegele Associate Editor, Algae Technology & Business (701) 540-6986 evoegele@bbiinternational.com

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biology

Strong Genes Targeted Growth says environmental isolates of algae aren’t good enough to meet industrial requirements, which is why the company is focused on strain selection.

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PHOTO: TARGETED GROWTH INC.

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biology

The

Strength of the Strain

These aren’t your backyard variety algae strains—they are the future

By Luke Geiver

Margaret McCormick, chief operating officer of Targeted Growth Inc., was standing at a podium explaining the breakthroughs her team had made with cyanobacteria to a large crowd seated in a fancy conference hall in a downtown Seattle hotel in January, and after revealing the difference between a typical strain of cyanobacteria and a strain modified by Targeted Growth, McCormick had the entire crowd laughing. It was her description of that

modified cyanobacteria that incited laughter from the crowd. Instead of a term more closely resembling the idea of “superiority,” or “advanced,” she pointed out to the crowd that her strain was significant because the strain featured a nice, fat beer belly. The funny thing is, she couldn’t have described the algal cell any better. More importantly, it is work like Targeted Growth’s to produce an algal cell with such a massive amount of lipid content that it coincidentally resembled McCormick’s description that will undoubtedly contribute to the scale-up of the algae industry, regardless of how it’s described.

McCormick and her team, which, since January, has formed an entirely new company based on their algae-strain success, aren’t the only innovators focused on the algae biology portion of the value chain. There are a number of private entities, national labs and university-led programs searching for the ultimate strain. Some are focused on DNA and others on photosynthesis antenna length, and even others who just want to work with those focused on DNA or photosynthesis antenna length. And there is a reason why strain selection continues. As McCormick mentioned in her presentation, “Environmental isolates of algae are not good enough” to meet the industrial requirements of algae’s next step, scale-up. Think of it this way: a major league baseball player wouldn’t step into the batter’s box with a tree limb from the backyard for a bat, although in theory it could work, just like a random strain of algae from some backyard pond might as well.

So while other developers flesh out the ideal length for a raceway pond or build new extraction systems via novel theories linked to cavitation, there is still reason to watch what those like Targeted Growth are doing, especially if one wants a glimpse into what the industrial strength strains of the scaled-up era will look like.

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Hitting the Mark

McCormick believes sets her algae team apart.

“The main advantage of cyanobacteria is that all the tools are there for genetic manipulation.” And the team has tried several. The strain features three manipulations, ranging from putting in new pathways, changing the timing of gene pathways so that you are turning the gene on or off during specific times of development, or even taking genes out, explains McCormick. “We believe it is the various combinations that are going to make these strains successful.”

One of the manipulations the team has already worked on has been to delete the cell’s ability to convert surplus carbon into glycogen. The team deleted the GlgC gene, essentially helping the cell to allow that surplus carbon to become oil instead of glycogen. “Our chief scientist says the only limit that we have is our imagination,” McCormick says of the potential of the company’s work on cyanobacteria, because “all the tools are in place.”

“About five or six years ago we decided to get into the bioenergy space,” explains McCormick, “and then about three years ago we started putting our molecular biology expertise towards algae, and more specifically, cyanobacteria.” Now, led by McCormick, the group from Targeted Growth is branching

PHOTO: TARGETED GROWTH INC.

TLA 3 is Coming

Complete Focus A strain under development by Targeted Growth is characterized to having a “beer belly,” or an algal cell with an enormous amount of lipid (oil) for industrial needs.

out to focus exclusively on algae. “When we started the program,” she says, “the idea was always that if we met our objectives, which were demonstrating proof of concept that we could engineer those superior strains— and that it looked like the algae industry was actually going to become a reality—then we would do the new company.”

That new company has gotten off to a good start, and they have done it in a way similar to other superior strain seekers. “We have spent most of our emphasis on the lipid production so far,” she says. Those pathways that affect lipid production have been explored for a $OJDH ,QGXVWU\ 8SGDWH number of years, but the company’s work on the accessory pathways in combination with the workable cyanobacteria strain is what 24 |

Not all algal strain development is about lipid content. Some research efforts are looking to develop weather tolerant strains, and others like UC Berkeley’s Tasios Melis have been spending time developing TLA in microalgae, or truncated light harvesting antenna. “The concept of TLA in mass culture prevents the early light saturation of photosynthesis,” Melis says. “It facilitates better light penetration.” Better light energy equals better algae energy, according to Melis, which could come in the form of biomass, hydrocarbons or even pure hydrogen gas. The idea behind TLA work starts with chlorophyll levels in the microalgae. Chlorophyll acts as a sunlight absorber in the cells, essentially limiting (based on the amount of chlorophyll arrays present in the cell) the amount of sunlight that can actually be used by the cell for growth.

By truncating the sunlight receptors—the antennas—of the chlorophyll, Melis learned that sunlight could penetrate further into the cell and allow for more growth, 300 times more. More important to Melis’ work is the fact that he has something in common with TGI. Melis proved the effects of a mutated TLA microalgae cell. He’s also made the cell available. His team put the TLA 1 strain into the chlamydomonas library just last year, and

the strain has already been acquired by five universities, five private businesses and four government labs.

Typically, Melis says, there are 600 chlorophyll units in a cell, and his goal is to reduce that level to 130. To do that, Melis started with DNA manipulation of the microalgae.

There are genetic determinants, he says, that determine the size of the antenna. By inserting a piece of DNA into the nucleus of the microalgae cell the team forced the cells to mutate, and change the genetic makeup of the cells. The idea, Melis says, was to mutate the cells so a truncated antenna would be formed and then they could isolate those mutated cells. “This is easier said than done.”

During the first round of insertions nearly 10 years ago, it took the team roughly 6,500 screenings to find one bona fide TLA. The team tested the TLA mutant versus a wild strain and the results were startling. “In the period of time it took each to reach the same level of density, the wild type accumulated 6.36 million cells per milliliter,” he says.

“In the same amount of time the TLA accumulated 10 million cells per milliliter,” adding that, “the productivity, no matter how it was measured by three different approaches, appeared to be double that of the wild type under bright sunlight and under mass culture conditions.”

Initially the team thought it would take until 2015 to reach the desired levels of chlorophyll units (130), but fortunately they were wrong. In 2005, the team had engineered TLA 2 which lowered chlorophyll units to 195 and in 2008 they did it again, creating TLA 3 that reached all the way down to 150 units. It takes a number of years for testing and accreditation of scientific work like his to be certified and ready for public use, Melis explains. The TLA 3 strain that is on the way will, he says, be applied to biomass, hydrogen production for microalgae and even cyanobacteria.

Cancer Research

No one hopes companies or researchers like TGI and Melis succeed more than Karen Newell-Rogers, because Rogers has discovered a cocktail of compounds that when added to virtually any algae strain, will improve the lipid content. Her work on metabolic disruption technology (MDT) started in tumor research and was funded in part by Viral Genetics, but after applying her findings to algae,

biology

Viral Genetics thought it was so promising the company formed VG Energy to commercialize MDT. In tumors, the process prohibits the tumor cells from burning fats, hindering the ability of the cell to generate the energy needed to fend off drug treatments like chemotherapy or radiation. In algae, MDT limits a cell’s ability to burn fats and, as McCormick has shown, everybody likes a “fat� algae strain. Rogers says that there is a very important protein that facilitates the use of fat that is highly expressed in drug-resistant cells, called a mitochondrial end coupling protein. “The drugresistant cells are very capable of switching to the end-coupling protein as a method to burn fat,� Rogers says. She began looking at plants under stress from extreme temperatures, from too much humidity and other conditions and found that plants have the same capacity to switch their source of energy to fatty acids as a mechanism for survival. “So we began to look at algae,� she says, “and the first thing we discovered is that algae also have end coupling proteins,� and she started to test her MDT approach at blocking pathways to those proteins. “If I put in the same kind of inhibitors that would block burning fat in a tumor cell,� Rogers says, “we can also block burning fat in those algal cells, and if we increase the concentration of the inhibitor, not only do they accumulate oil, they begin to secrete the oil in little droplets.�

To prove her work, Rogers has been working within the Texas A&M Agrilife facility where scientists have shown how well the MDT process works. The process involves treating algae with synthetic compounds, Rogers explains. “They are metabolized and then they go away. We are not doing any kind of genomic modifications.�

She equates the process to adding fertilizer to a farm that is trying to produce oil. We can enrich the oil content on a per-cell basis roughly threefold, she says.

For the period of time the algae are affected by the inhibitors, they can’t burn oil, and that is an advantage of using an MDT inhibitor approach. “We can harvest the algae and we can either extract the oil or put in sufficient compounds where they spit oil out themselves. And that is a big advantage over trying to come up with a use for the biomass of dead algae.�

Regardless of the approach used by companies like VG Energy or researchers in California, there are several things to remember about all of those efforts devoting thousands of beakers a year to algae. For one, these are the type of companies that will form partnerships, at least in VG Energy’s view. Haig Keledjian, spokesperson for VG Energy, says not only does the company hope to partner with an established player in the young industry, but that companies like VG Energy “are not in competition with the companies out there, we are an enhancer.�

McCormick has her take on algae biology companies too. She asks the question, “If we build it, will they come?� If the work by companies like Targeted Growth, VG Energy or a handful of research efforts as good as UC Berkeley’s are any indication, it seems awfully hard to say no.

Author: Luke Geiver Associate Editor, Algae Technology & Business (701) 738-4944 lgeiver@bbiinternational.com

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spring 2011 | 25

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research

Making

History The National Renewable Energy Laboratory’s groundbreaking algae program hit a snag in the ‘90s, but has since been revived

By Erin Voegele

The U.S. DOE’s National Renewable Energy Laboratory has a rich history when it comes to algae research. Its landmark program,

Bioprospecting Project National Renewable Energy Lab researcher Lee Elliott adds samples to the collection in the algae light room.

known as the Aquatic Species Program, is commonly considered the bedrock of the modern algae industry. While the program was discontinued in 1996, the close-out report NREL researchers complied at its sunset is still considered to be the primary source on algae for companies entering the sector. Algae research was revived by NREL in 2006, and has since achieved many promising benchmarks.

The Aquatic Species Program was quite well known for as establishing the state of technology for algal biofuels, says Phillip Pienkos, acting group manager of the applied sciences group at NREL. “It was a comprehensive effort applied across the entire value chain,” he says, from basic biology and bioprospecting, to strain improvement, cultivation, harvesting, conversion and economic analysis.

At the time the program was discontinued, even the most optimistic analysis of available data showed algae biofuels were still far too expensive to compete with petroleum. “The most optimistic projection was somewhere on the order of $40 per barrel for algae oil, compared to the price of petroleum, which was about $20 per barrel [at that time],” Pienkos says. “The best prognostication of that period suggested that oil was going to remain at $20 per barrel for the foreseeable future.”

“The low cost of petroleum really took the wind out of the whole biofuels arena,” Pienkos continues. “The DOE decided to cut back on funding, end the algae program, and focus [almost exclusively] on cellulosic ethanol. Of course, the foreseeable future ended a lot sooner than anyone expected.”

By 2008, the price of oil had reached all time highs. “As we were moving in that direction, there was a sense that we really needed to reevaluate our commitment to biofuels,” Pienkos says. In 2006, the DOE and USDA produced a report that has widely become known as the “Billion Ton Study.” The report determined that the U.S. could produce approximately 1 billion tons of terrestrial biomass each year. According to Pienkos, analysis clearly showed that terrestrial biomass could not alone meet our nation’s fuel needs, especially when one considers that that biomass is a sought-after feedstock for many other industries, including the heat and power sectors.

PHOTO: NATIONAL RENEWABLE ENERGY LABORATORY, DENNIS SCHROEDER

spring 2011 | 27

research

“When that study was done, it became clear at NREL and at other places that there was perhaps a need to reevaluate the decision that was made to end research into algal biofuels,” Pienkos says. In 2006, it was decided to bring NREL back into the game.

While petroleum companies traditionally showed little interest in cellulosic ethanol, NREL anticipated it might be interested in forming partnerships for algae research. Indeed, the oil industry did show interest, due in part to the fact that algal lipids make a better feedstock for their refinery operations.

A research agreement was established with Chevron in 2007, breathing life back into NREL’s algae program. “That really helped us get back on the map,” Pienkos says. “Although as a flagship program, [cooperative research and development agreements] are rather unsatisfactory because we can’t really talk about the work. Our management and scientific leaders here at NREL recognized the value of algal biofuels, and NREL made available internal funding to allow us to make some strategic capital purchases and do some remodeling of our labs to restore our ability to grow algae and actually support some research projects.

Through this internal funding, we began to build a series of projects that we could actually

talk about and help better establish ourselves as a lead organization in algal biofuels.”

NREL’s primary focus in algae research is biology. “There are a number of reasons for that,” Pienkos says. “If you do economic modeling and you do sensitivity analysis, you see that the biological productivity [of algae] is by and large the major cost lever for algal biofuel production.” There are a lot of numbers and goals tossed around when it comes to productivity and lipid content, however, the ranges most often cited by industry ultimately result in huge changes in the calculations and projections of the cost per gallon of algae oil.

“That drives a lot of people to the basic biology,” Pienkos says. One reason NREL is here, he adds, is to help identify how to achieve high growth rates, while achieving high lipid content.

Featured Research

PHOTO: NATIONAL RENEWABLE ENERGY LABORATORY, DENNIS SCHROEDER

One internally funded NREL project focuses on finding better ways to extract lipids from algae cells. The project led by NREL researchers Eric Knoshaug and Henri Gerken, centers on the use of enzymes.

“It’s difficult to get oil out of the algae,” Pienkos says. “Extraction requires things like dewatering the cells to the point of dryness.

Even with that, you can’t necessarily count on the solvents getting into the cell and being efficient at extracting the oil.” The use of solvents also generally requires a great deal of energy, in terms of mixing or disrupting the cell walls.

“One thought that we had was if you found enzymes that could help degrade the cell wall, that would facilitate the extraction of the lipid,” Pienkos says. “It might also allow the lipid droplets to simply escape from the cell so that you might not even need solvents.”

There are two possible ways to exploit the use of these enzymes.

“One is to take your algae and concentrate them some way in an aqueous slurry, throw enzymes in and weaken the cell wall to get the oil out,” Pienkos says. “Another way is actually to engineer the algae so that under controlled conditions they Developing New Methods National Renewable Energy $OJDH ,QGXVWU\ 8SGDWH Researcher Lieve Laurens is working to expedite the analysis produce those enzymes themselves. of algae though the use of near infrared spectroscopy and You would harvest the cell, process mathematical models.

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it in some way, and all of a sudden they would begin to weaken their own cell walls, [which would] reduce the cost and the energy necessary for lipid recovery.”

While Knoshaug and Gerken are working on methods to more efficiency extract oil from algae cells, Lee Elliott, a PhD candidate at the Colorado School of Mines who works as a researcher at NREL, has been traveling around the Southwest collecting native algae strains.

The project Elliott is leading was funded by the Colorado Center for Biofuels and Biorefining (C2B2). During the summers of 2008 and 2009, Elliott collected more than 70 water samples from areas in California, Nevada, Utah, Colorado, New Mexico and Arizona.

Back at NREL, he worked to isolate algae strains found in the water samples, resulting in about 360 individual isolates. Once the strains are isolated, they are screened to identify promising strains in terms of lipid production and growth rates.

The bioprospecting portion of Elliott’s project is now complete, but a similar project is under development to collect strains from regions in Canada. That research is being developed through a partnership formed between the DOE and the Canadian National Research Council.

Elliott says he should be done screening the algae samples he collected by the end of the year. It has not yet been determined who will have access to the samples once lipid screening is complete. “Other people are interested in screening this [collection] in more detail and for other products,” Elliott says. This includes screening for carbohydrate levels, characteristics relevant to hydrogen production, and protein content. In addition, Elliott notes that some may be interested in screening for toxins.

A lot of algae produce toxins that may actually be valuable, he says.

Another NREL researcher is working to develop a mathematical model that could expedite the process to measure the lipid content of algae cells. “My work is mainly focused on understanding the biochemical composition of microalgae biomass,” says Lieve Laurens, a research scientist in NREL’s National Bioenergy Center.

Laurens uses near infrared spectroscopy to determine the composition of algae samples. The testing method is allowing Laurens and her team to develop mathematical equations that can predict lipid content based on a spectra fingerprint.

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Traditionally, the lipid content of algae cells has been measured by using highly toxic and carcinogenic solvents to extract the oils.

After the oil is extracted, gas chromatography is used to analyze the individual lipid types present in a biomass sample. The entire process is extremely labor intensive and can take several days to complete, Laurens says.

Spectroscopic fingerprinting, on the other hand, takes a matter of seconds. Using the mathematical models Laurens and her team are developing, the lipid content of an algae cell can be estimated in under a minute.

The completion of a feasibility study was the first step in developing the prediction models. The results of that study were published last year. Since that time, work has continued, and Laurens says the project is progressing nicely. “The more samples we collected, the more fingerprints we have,” she says. “For all these samples, we also have the actual measured concentrations [of oils].

So, now we have models we can actually apply to new samples as well.”

While there is still a bit of uncertainty associated with the mathematical models, Laurens says her team is working to improve them and reduce the level of uncertainty.

One clear benefit of the method is that it is nondestructive. This means that the algae cells aren’t destroyed during the evaluation.

The method being developed by Laurens and her team is clearly beneficial in a lab setting, where researchers need to process a large number of samples as quickly as possible. However, the models might also be useful in commercial applications. Those who produce algae commercially will need to have a method to monitor lipid content in real-time so that they can determine the optimal time for harvest. Near infrared spectroscopy could allow commercial-scale producers to take a sample of their algae culture and determine its lipid content in a matter of minutes.

Into the Future

Now that NREL is back in the algae game, Pienkos says he expects the lab to continue to be a leader in the industry. “I think [algae] is an ideal subject for NREL research because there remains a lot of technical hurdles, and there remains quite a bit

of uncertainty,” he says. “Although there has been a significant amount of large-scale investments in algae, there still remains a lot of uncertainty in the short-term, and with commercialization in general.”

Many of the technical hurdles identified during the Aquatic Species Program still remain, he continues, noting the best cost projections still show that algae is too expensive to compete with oil. That said, Pienkos continues, the strategic value of algal biofuels when it comes to energy security implications and greenhouse gas reductions is far too important to pass us. “We need to continue doing this work, even it if takes years to accomplish, simply because the need is so great,” he says. “And the risk is high enough that you can’t expect private industry and private investors to necessarily shoulder the burden.”

The government and national labs can really help the entire industry move forward by helping to reduce risk and stimulating private investment, Pienkos adds. “I think algae biofuels are going to require a bit more R&D,” he says. “Some of the R&D, especially in the algal biology falls into a sweet spot for our research, so I think that we have an important role to play in accelerating the path to commercialization.”

Regarding the future of the algae industry as a whole, Pienkos says that he thinks the new wave of companies entering the space has already peaked. What we’re seeing now, he says, is some new companies entering the space and very quickly taking prominence. In many cases, those are companies that have either developed a game-changing technology or have identified a niche in the field that allows them to stand out.

Rising oil prices are certainly helping to drive all forms of biofuel research. “There is no question about that,” Pienkos says. However, it is important to ensure algae companies are cost competitive with low petroleum prices. “The worst that could happen,” he says, “would be for an undercapitalized company to make its move towards commercial production and then have the price of oil depressed for a period of time, driving them out of business.”

Author: Erin Voegele Associate Editor, Algae Technology & Business (701) 560-6986 evoegele@bbiinternational.com

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CONTRIBUTION

CO2 and Algae Projects An opportunity to sequester carbon and foster algae production

By Sam A. Rushing

The Japanese nuclear disaster makes it clear the world is in dire need of clean, safe, reliable (renewable) energy alternatives.

Biofuels are a major component of this need; more specifically, algae is feedstock for tomorrow’s fuel, and the high-energy crop far exceeds other biofuel options. A mix of biofuels is necessary, however, to bridge tomorrow’s energy demands, and reduce and sequester the ever problematic carbon dioxide (CO2) emissions glut.

CO2 is one of the essential components required to grow algae, along with sunlight, water and nutrients. The technology is in relatively early stages, used in smaller settings such as breweries, but global power projects $OJDH ,QGXVWU\ 8SGDWH

are also interested. It may be a while before it’s brought to full-scale commercialization, however, all components exist—particularly a need for high-energy biofuels. Carbon capture and storage (CCS), or carbon sequestration, is a growing science. This involves geologic sequestration in oil production and coal recovery projects—replacing recovered methane gas with CO2, natural aquifer sinks for CO2—such as those in the North Sea. Of the gross total daily CO2 emissions on a global basis, China is the highest emitter, followed by the U.S. and the EU. CO2 is by far the greatest greenhouse gas by volume, but others (methane) are much worse. Sequestration means are constantly being evaluated by those major emitters such as chemical and

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Algae Technology & Business or its advertisers. All questions pertaining to this article should be directed to the author(s).

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power generation plants, and oil and ethanol refineries.

Some estimates indicate at least 75 million metric tons of CO2 are emitted daily from a wide variety of sources. Natural processes such as photosynthesis and natural oceanic activity are major carbon sinks. The ocean has traditionally absorbed about 25 million metric tons of carbon but it’s becoming more difficult for the oceans to absorb CO2 naturally.

Many think the oceans are becoming saturated because atmospheric CO2 is also elevated, and the oceans’ pH is dropping toward an acidic state, where “oceanic acidification” may become a major problem. Acidification will damage and kill marine life such as coral reefs, perhaps indefinitely.

Algae produced for biofuels markets will become a major component of the advanced biofuels sector. Algae is an extraordinarily energy-rich crop, exceeding the energy value of soy by 30-fold. A small amount of physical

co-location

space is required to produce sufficient algae to replace all domestic petroleum needs.

Requirements

Studies suggest two pounds of CO2 on average is utilized per each pound of algae grown. This can be as low as one pound per pound, and as high as three pounds of CO2 per pound of algae. Growth settings include raceway configurations, vertical thin sunlit bioreactors, open ponds and coastal sea operations. Best suited algae operations for CO2 are a function of strain selection, project size and geography, and the presence of adverse temperatures and other conditions. If the CO2 were delivered via pipeline, and because of the gas’ corrosiveness, the delivery system should be constructed of a high-density polyethylene (HDPE) versus the standard, more costly stainless steel. The CO2 would probably be introduced into the pond, bioreactor or raceway as a gas, and the commodity is stored, piped and transported as a liquid. Small operations might start with so-called microbulk storage tanks, which can hold from 400 to 600 pounds.

Larger operations would use on site, vacuuminsulated liquid storage vessels or refrigeration systems to maintain pressures under 300 psig, and temperatures near 0 degrees Fahrenheit.

Delivery to the algae system might be a series of diffusers, similar to those used in water treatment applications for CO2, and the piping from the storage to the application site could be composed of stainless steel, or type “K” copper tubing. The systems could be operating on timers, with or without a flow meter, however set to inject a given sum of CO2 into the growth medium. The storage, deployment and hardware for CO2 use is rather simple, but CO2 is essential for algae growth.

It is logical to evaluate more enriched forms of CO2 from industry, such as ethanol plants. The power industry is the worst offender by volume of CO2, and the unique nature of hot flue gas from them could apply well to certain blue-green algae that endure heat from the Yellowstone Park geysers. Power plant CO2 is lean in content compared to ethanol refining effluent or anhydrous ammonia production, with raw gas, water saturated basis of 98 to 99 percent volume or greater. These

“clean sources” generally don’t include sulfur, heavy metals or heavy hydrocarbons. The flue gas from combustion of coal and natural gas can range from 14 percent volume in the raw gas with coal fired plants to 3 percent from a turbine exhaust source. If concentrating CO2, costs become significant but concentration has not yet been considered in the algae project tests and pilot ops within the power sector.

One such power plant algae project is in Southeast Queensland, Australia, owned and operated by MBD Energy and a research cooperative. It is moving forward with an algae synthesis system, whereby the Tarong Power Station flue gas will be injected into wastewater, which contains nutrients, along with sunshine, for production of select algae in a (membranebased) closed system structured to be a large raceway project. The algae mass is expected to double every 24 hours and be harvested daily and crushed to produce algae oil suitable for biodiesel, meal for cattle feed and clean water.

The crude mass for cattle feed contains from 50 to 70 percent crude protein, and feeding trials are being conducted at James Cook University. The ultimate operating project is planning an 80-hectare site sequestering more than 70,000 metric tons of CO2 from the flue gas, and producing 11 million liters (2.9 million gallons) of oil plus 25,000 metric tons of algae meal. This form of bio-CCS algae sequestration is similar to the earth’s natural carbon cycle, however, it is accelerated exponentially, taking only a day. Other applications for the oil beyond biodiesel include jet fuel production and bioplastic materials. Beyond feed the meal can be used in plastics and fertilizers. The algae product yields 35 percent oil and 65 percent meal. The project has Australian government funding and will lead the way throughout Australia for similar projects.

U.S. power plant algae endeavors are underway, some are feasibility and pilot studies, many funded by U.S. DOE’s $1.4 billion Clean Coal Power Initiative. Applications for federal and state funding and initiatives for algae-based sequestration have taken place with Arizona Public Service Company, Duke Energy, NRG, Southern Company, and American Electric Power Co., to name a few. The power industry has been the major component of

CO2 emitters to evaluate, test and work on developments toward sequestering CO2 via algae growth. The methodology surrounds a rather methodical selection of the best-suited strains of algae, usually capable of enduring SOx, NOx and other compounds, including heavy metals from the power plant flue gas, as well as being tolerant to high temperatures.

Other criteria for selection of algae strains are driven by those that yield high amounts of oils and starches. The point of application has been tested in bags, vertical bioreactors, raceways and ponds. Conceptually, the algae are harvested daily in a large or commercial-scale facility.

The Future’s Choice

Many forms of sequestration will be needed beyond a cap-and-trade system. Some estimates consider at least 50 million metric tons of CO2 are emitted to the atmosphere daily, beyond what the oceans, photosynthesis and other natural means can absorb. This number is likely to grow, with the so-called BRIC countries, growing rapidly. As they grow, so do carbon emissions. Further, the battle against deforestation places added stress on the whole CO2 emissions equation, which removes a significant natural carbon sink: photosynthesis.

Many strains of algae are being investigated to fit niche markets, such as those which retard extreme heat or cold, or grow during the nighttime with minimal light. Specific algae strains will eventually meet extreme or unique physical conditions for growth. The end result will be extracting the oils for fuels, plastics and other products, and the use of the algae meal for numerous markets. The strains of algae may be derived from far-flung African swamps to frozen, high-altitude snowfields in South America. The strains selected to endure the harshest of temperatures and other physical conditions are vast, and commercialization to fit many conditions is one of the most viable concepts ever developed to meet tomorrow’s renewable energy needs.

Sam A. Rushing CEO, Advanced Cryogenics Ltd. (305) 852-2597 rushing@terranova.net

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scale

CONTRIBUTION

Algae Project Scale and Risk

a factor in considering whether the oil will be further processed to biodiesel or marketed as bioWater, light, site infrastructure and risk are key crude to a refinconsiderations for algae projects By Mark J. Hanson ery. Some suggest commercial-scale marketing of algae oil as biocrude to petroleum Many algae project developers refineries is about 100 MMgy. Biocrude can be face the question of how to apmarketed to existing biodiesel plants, but opproach â&#x20AC;&#x153;commercial-scale.â&#x20AC;? Commercial-scale has not been defined for algae portunities present today may be subject to biofuel facilities, but guidance from other bio- compatibility with other feedstocks, availability fuel models is available. Ethanol production and pricing of others including waste oil with facilities started commercial-scale production little market value, and a risk that the biodiesel at 12 to 18 MMgy with local financing in the facility will stay in business with that algae oil mid-1980s. With a proven track record, com- capacity available. If a facility is designed to remercial facilities were designed at 40 MMgy in fine algae oil to biodiesel, scale is much less of 2000, and since 2005 are customarily built on a factor because biodiesel can be marketed in a 100 MMgy model to achieve economies of smaller quantities.

Commercial scale also focuses on econoscale. The brief history of commercial biodiesel production since 2006 has focused on com- mies of scale for production, harvesting, extraction, refining to biodiesel, product invenmercial scale of 20 to 30 MMgy. Twenty to 30 MMgy of algae oil can be tory and storage, and personnel costs. Algae a daunting proposition for open pond algae production is not a manufacturing system or systems, requiring 6,000 acres of ponds pro- land-based plant cropping system, but rather a ducing high rates of algae oil, 5,000 gallons per dynamic plant growth system requiring moniacre. For algae biofuel facilities, scale will be toring and management similar to live animal $OJDH ,QGXVWU\ 8SGDWH

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Algae Technology & Business or its advertisers. All questions pertaining to this article should be directed to the author(s).

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production instead of land crop production.

Larger scale requires attentive monitoring and management to detect growth rates, nutrient uptake and environment changes, as well as diseases, viruses and predators. As a result, the cost of technical personnel, monitoring, harvesting, extraction and refining equipment needs to be spread over an appropriate production base.

If the scale is too small, the project risks high overhead costs that affect profitability.

Water. While many projects focus on sunlight as the critical factor for algae production, water availability is probably more important.

Location, system design and size determine what the water needs will be. Permits, regulations and competing uses will determine the availability. Water needs for a 100-acre open pond system in a region with high solar radiation and little rainfall include evaporation and water lost through algae harvesting. In the high solar, arid areas of the U.S., evaporation can be 60 to 80 inches of open surface water annually. The impact of evaporation is not just removal of water, but also concentration of minerals and salts. A 100-acre open pond in a high solar, arid area would require about 160 million gallons of additional water per year to maintain the same water levels. At a production rate of 5,000 gallons of algae oil per acre per year (high), this 100-acre, 500,000 gallon algae oil production system requires about 320 gallons of water for each gallon of algae oil produced.

scale

Open systems also have the risk of too much water through precipitation and local flooding. While catastrophic events may be rare, rainfall in open systems can dilute and change the chemistry of nutrient-laden water optimal for algae growth. Algae production entrepreneurs such as Phyco Biosciences have reduced the effects described above on open systems by lining and covering trench systems in Arizona. Those systems reduce the risk of evaporative water loss and concentration of minerals and salts.

In closed systems, there is still water loss from harvesting and a need to make up water as necessary to supply micronutrients taken up by the algae, which are removed from the system. At any time the algae nutrient uptake (including micronutrients essential to cell structure and growth) exceeds the nutrient replacement rate, the system is at risk of reducing productivity. In natural systems such as lakes, the water and nutrient replenishment is constant, varied, and dynamic. A lake has multiple, complex systems from the air-water interface to the water-sediment interface coupled with variable mixing regimes to supply and change algae production dynamics. Designed systems insulate the water from many of the external variables to achieve stability with the goal of predictability, but still face the water chemistry dynamics necessary to optimize photosynthesis and algae production that will occur in variable cycles, typically at nonlinear rates.

Light. Many algae production designs focus on optimal sunlight as the primary factor for siting a facility. While some systems such as Solazymeâ&#x20AC;&#x2122;s focus on dark algae growth through sugar-supplied energy, most focus on light energy for algae photosynthesis to produce growth and oil. Algae need a certain amount of light at opportune times to grow well. Solar energy generally exceeds the amount of light needed for photosynthesis at the water surface and attenuates rapidly in the first four to six inches of depth and, as algae grow, they self shade the light source so mixing is utilized to bring more algae into appropriate light to promote growth.

Nationally, the areas of the country with the most sunlight receive no more than nine to 10 hours of variable intensity sunlight per day, annually averaged. The variation throughout

the country from summer to winter may be as much as 25 to 50 percent. The daily and annual variation can result in production variability, unless the available sunlight is underutilized by the algae production system.

Sunlight photosynthesis systems have an inexpensive source of energy, but it is variable and will be diminished by clouds, weather and atmospheric events. In winter months, reduced production and corresponding algae oil supply may cause demand and pricing variations.

In the best locations sunlight photosynthesis systems are without light over half the time and subject to technological risks of better artificial lighting that efficiently produce more algae per volume of water by optimizing the strength, wavelength and duration of light and dark periods 24 hours a day, without daily and seasonal variability. The artificial systems may even collect and store solar energy to release light efficiently over a longer period.

The 20- to 25-year levelized costs of algae oil production of sunlight systems and artificial light systems should be considered in the design process.

Site Infrastructure. Most algae production facilities have a considerable investment in site infrastructure. The amount of capital invested in a unique application is an additional risk factor for project developers, investors and financiers. The amount of permanent infrastructureâ&#x20AC;&#x201D;concrete, buildingsâ&#x20AC;&#x201D;reduces flexibility of a project to adapt to changing technologies and different operations. Permanent infrastructure is also at risk if water availability or quality changes, reducing algae production and project viability at a particular location. Pond system infrastructure is permanent and cannot be relocated. Photo bioreactor systems have significant capital investment, but can be relocated with varying costs.

Rewards of Risk Assessment. In the rapidly developing algae industry, risks are being considered for open pond, photo bioreactor and hybrid systems. The design and siting of systems incorporate varying amounts of risk and risk tolerance. Projects should be designed with risk factors considered on the front end to develop a sustainable, financeable algae production system. One can imagine an open pond system near the equator, adjacent to the ocean to minimize water and sunlight risks; or

one that is mobile, scalable to a particular size by adding or subtracting interconnected modules, utilizing artificial light to optimize algae production on a 24-hour basis, extracting oil for biodiesel production that can, in turn, be used as a backup fuel, using algae biomass as a fuel or feed product, contained in a manner to minimize water usage.

Alberta, Canada-based Symbiotic Envirotek Inc. developed a system of isolatable modules that are insulated, portable and scalable to form a biofield of the desired size with microalgae yields forecasted to be four times of first-generation photobioreactors, with a smaller ecofootprint. To optimize such a closed, mobile system it must be closely monitored for water usage, nutrient availability and control. Mobility would allow different uses for varying periods of time and additional financing mechanisms. If modules are considered equipment, financing could be enhanced by accelerated depreciation and equipment lease and financing.

OriginOil developed advanced harvesting and extraction technology used in open systems in Australia, which can be applied to other systems. OpenAlgae also developed a harvesting, dewatering and extraction system using a lysing technology. Mcgyan Biodiesel LLC developed a catalyst technology to convert oils to biodiesel, which can include algae oil separately or with other oils in a cost-efficient modular system. The National Algae Association has taken a project approach with engineering and financing groups and is developing a 100-acre closed system (photobioreactors) designed to avoid or minimize risk.

New venture financing will frequently accept higher risk profiles, but in the technological algae development boom, adaptability to new technologies will also be a key factor.

Each project will need to address risks involving light (energy), water quality and quantity, operations, including qualified personnel; and technological risks and obsolescence. The projects that analyze and address these in designs and systems will likely be rewarded with project financing and sustainability.

Author: Mark J. Hanson Attorney, Stoel Rives mjhanson@stoel.com

spring 2011 | 33