November 30, 2011

Gilbert company turns algae into jet fuel and food

One of the most primitive forms of life on Earth may hold the promise of a high-tech solution to some of the globe's most vexing problems.

Heliae, a technology-development company based in Gilbert, is working to design an industrial process that starts with the creation of high-fat strains of algae and ends with the production of ready-to-use jet fuel and other commercial products.

"It's easy to do in the lab," said Heliae President and CEO Dan Simon. The trick, he said, is developing the integrated processes to grow, harvest and refine algae products on an industrial scale.

The company's business plan is to develop and license the technology that allows the sustainable, large-scale production of fuel, food and other biochemically valuable materials from algae, said Craig Johnson,Heliae's chief financial officer. Other than to test procedures and demonstrate processes, Heliae doesn't plan to market those commodities itself.

"We are trying to be the innovators and the inventors of a technology," Johnson said. "You can grow algae all day long but you have to make it efficiently to be profitable."

The lab holds all manner of paraphernalia needed to develop, analyze and test algae strains -- panels of bubbly, green liquids, centrifuges, shelves of chemicals, compound microscopes and jars of refined fuels made from algae oils that are ready to be analyzed.

The lab is essentially a demonstration facility, said Luis Acosta,Heliae's production manager.

"We go from Petri dish all the way to jet fuel on this site," he said.

Commercial-scale testing is done out back, behind the company's lab and office space.

Frank Mars, whose great-great-grandfather founded the Mars candy company, is the co-founder of Heliae and serves on the board of directors.

Although he also serves on the Mars company's board of directors and runs the Mars Symbiosciences division, he said his investments in Heliae are a private matter, not associated with the company.

Mars said his interest in sustainable agriculture and energy stems from his being a member of the family that owns one of the world's largest food businesses.

"We only have one planet," Mars said, noting that the world's 7 billion people are currently using the globe's resources at an unsustainable rate. "There are no more raw materials, no more land. Algae allows us the opportunity to rebalance that equation a little bit."

Mars ticked off the resources needed to grow algae and their costs: sunlight -- free, waste water from municipal treatment plants -- free, and carbon dioxide from gas-powered plants -- also free.

"So why not turn (waste) water and sunlight into energy and food and fuel?" he said.

Heliae's initial goal is to produce enough materials for such niche markets as food additives for farm animals and for aquaculture applications while continuing to develop and test industrial processes.

Its long-term goal is to be the world's leading source for algae technology by designing, building and operating algae facilities around the globe, by licensing algae production processes and providing technology services to commercial enterprises.

Algae is far more efficient than other crops commonly used to make biofuels, Johnson said. Soybeans, corn and sugarcanes are seasonal crops that yield, at most, around 600 gallons per acre per year, he said, and also involve intensive farming techniques.

He and Simon expect Heliae will soon be able to produce 20 times that amount.

"All you need to grow algae is sunlight, water and CO2," Johnson said. "You also need a little bit of land, but it doesn't have to be good land. You need water, but it doesn't have to be good water."

Their immediate production goal is to be able to deliver 10,000 gallons of fuel per acre per year.

Johnson estimated that the company is anywhere from three to seven years away from generating revenue.

Simon envisions Arizona in general and Gilbert in particular, as a global center of algae technology.

In addition to plenty of sunshine and affordable non-agricultural land, he cited the town's commitment to fostering high-tech enterprises, its highly educated workforce, strong academic ties and a business-friendly environment.

Heliae has 62 employees; nearly half are engineers.

The company, founded in August 2008, grew out of a partnership with Science Foundation Arizona and researchers at Arizona State University's Polytechnic campus in Mesa. Since July 2010 it has occupied about 15,000 square feet of office and lab space in an industrial park near Germann and Gilbert roads. It also has about 2 acres of land.

Heliae has raised around $25 million in investment capital since 2008.

The challenge now, Mars said, is making the transition from a venture to a business.

While a healthy return on investment is always important, that's not what drives his interest in developing algae as a source of fuel and food.

"Profitability by itself is not the endgame," Mars said. "It's proving the business model can build a whole new industry. We want (investors) who are worried more about the future of their kids and grandkids than just making a buck."

Algae productivity

Crops can be used to make biofuel. Here are some of the most common, and the gallons each can produce from 1 acre of marginal land, according to Heliae:

Soybeans: 62.

Corn: 440.

Switch grass: 562.

Palm: 650.

Sugarcane: 700.

Pond algae: 3,000.

Heliae algae grown in a photo-bioreactor: 12,000.

Original post available here.

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