February 21, 2012


While biofuels made with ethanol and soybean oil dominate the renewable energy debate, not everyone is aware that single-celled algae can also provide a valuable fuel source. Microalgae, the bright green “scum” most often observed on lakes and ponds, contain the same kinds of organic oils as corn or soybeans that make them viable for biofuel production. In fact, most of the petroleum we currently rely on is made from fossilized algae. But innovations in recent years have enabled scientists to convert non-fossilized algae into crude oil, a development which may provide a solution to our reliance on petrochemical energy.

OriginOil, an American company responsible for several breakthroughs in algae-based biofuel technologies, announced a commercial agreement last week with Aquaviridis, an algaculture company based in Minnesota with several sites in Mexico. The new agreement (made possible by the North American Free Trade Agreement [NAFTA]), will create green jobs in both countries by introducing technology developed by OriginOil to Aquavirids’s algae processing facility in Mexicali, Mexico. While the agreement deals with algae production for a range of uses, OriginOil’s new technology promises to improve the efficiency of algal-oil fuels in a commercial capacity.

Thomas Byrne, president of Aquaviridis, explained, “After evaluating OriginOil’s portfolio, our technical team felt that OriginOil had some novel, scalable, and potentially game-changing technologies for algae harvesting and growth enhancement. We are excited about the opportunity to work closely with them as a partner during our research and planning stage. Having the right partners and technologies is critical, as our expectation is to have this facility in revenue this year.”

The newly modernized facility intends to proceed from research and development to a 10 acre pilot algae farm by the middle of the year, and commercial scale algae production is scheduled for the second quarter of 2013. Assuming commercialization is successful, the deal could pave the way for a series of algae farms and production facilities in both the US and Mexico. OriginOil’s vice president of marketing, Ken Reynolds, has high hopes for the project.

“The Mexicali Valley is a great place to develop an algae industry, given its climate and access to industry research and resources throughout North America. With the U.S. as a neighboring market for high value exports, Mexico is in an excellent position to take the lead in areas such as research and production of algae for nutritional products, animal feed, and oil for biofuels, which would create long-term regional economic growth and job production,” he said.


British economist Lionel Robbins coined the classic definition of economics: the study of scarce resources which have alternate uses. Indeed, both the “scarcity” and “alternate uses” of conventional biofuel sources seem to present obstacles for their long-term cost competitiveness. This is because soybean and corn oils necessarily demand an important tradeoff—to produce fuels like ethanol, farmland and crops must be designated specifically for fuel instead of food. The price of soybeans, for example, has soared in recent years to reflect direct competition between biofuel producers and manufacturers of a multitude of other soy-based products. These competing interests within the agricultural industry have prevented soybean and corn fuel from becoming price competitive with petroleum, despite biodiesel and ethanol typically receiving the lion’s share of renewable energy subsidies. (The legislation providing for the ethanol subsidy expired on Dec. 31.) Moreover, political pressure from the petroleum industry could complicate any meaningful changes toward renewable energy in the long-term—such a fundamental shift would cost countless oil refining jobs, a prospect which has sparked opposition to emerging fuel sources from the multi-billion dollar oil industry.

But algal-oil fuel production may avoid these economic pitfalls. While countless food products are composed from corn and soybeans, pond scum has substantially fewer alternate uses. And fewer competing interests within algae markets means potentially lower prices on fuels made from algae biomass. Furthermore, because algae grow in an aquatic environment which is unsuitable for conventional agriculture, cultivation doesn’t require a tradeoff with farmland which would otherwise be viable for food. In fact, commercial algae production can take place in ocean water or even wastewater. Almost the entire organism is devoted to converting sunlight to oil, or lipids (not the case with corn or soy), compelling one biofuel company to claim that an area of algae the size of a two car garage could potentially produce as much energy as an entire football field of soybeans.

But perhaps most impressively, representatives from OriginOil claim that their technology can be implemented in existing petroleum refineries which could be overhauled and converted to algae oil production. This means that the infrastructure necessary for a complete transformation of our energy market may already be in place, a distinction which could present two potential advantages for proponents of algae fuel: it could ease the transition from petroleum to renewable fuel sources, saving potentially billions of dollars otherwise necessary to build a new energy infrastructure, and it could go a long way toward quelling opposition from the petroleum industry, who could conceivably still profit from algae produced in existing petrochemical refineries.


For now, algal-oil fuels are still far from being cost-competitive with petroleum. There are three primary obstacles to efficient algae production. First, since algae are aquatic, individual cells must be separated from water and concentrated. Second, single-celled algae have a tough outer cell wall which must be cracked before oil can be harvested from the cell. Both of these processes are energy intensive, and therefore costly. OriginOil has addressed these problems with a patented process called Quantum Fracturing, which combines technology involving electromagnetic fields with pH modification. According to OriginOil, this “Single-Step Extraction” process is less costly than conventional techniques, and necessarily results in the separation of water, oil, and biomass. A time lapse video of this separation process can be seen at OriginOil’s website. Finally, because algae processing is inherently energy intensive, energy use must be extremely efficient at all stages of production. OriginOil hopes to sequester and reuse gas byproducts like hydrogen produced by algae growth in order to make harvesting as energy-efficient as possible. Additionally, OriginOil claims that oil-depleted algae cells can be used to supplement cattle feed.

All of which suggests a promising future for OriginOil and algaculturalists across the board. But if algae-based fuels are to meet our growing energy demands, there are still technological hurdles to be cleared. Privately funded research and development from innovative companies like OriginOil and Aquaviridis is yielding exciting results. Before deciding whether to renew ethanol subsidies, the federal government may be wise to give thought to incentivizing investment in emerging energy technologies like algal-oil extraction.

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