Really Green Fuel: The EPA Opens the Door to Algae

By Russell Gold

Forget the summer of love. This is truly turning into the summer of algae.

Flickr

More advanced than it appears.

The renewable energy and law blog of Stoel Rives LLP, a big law firm in the western U.S, reports that the Environmental Protection Agency will count algae as an advanced biofuel under Renewable Fuel Standard rules being developed. The EPA is said to be encouraged by recent interest in algae by heavyweights such as Exxon Mobil and Dow Chemical.

Biofuels such as cellulosic ethanol, sugar-cane ethanol and even biodiesel were envisioned in the RFS – but algae was absent.

Why do EPA’s steps towards including algae matter? Because when Congress created its mandate to blend advanced biofuel into the fuel pool, it created a big market for these fuels. By 2012, the law mandates that two billion gallons of these advanced biofuels be blended, a figure that rises by tenfold by 2022. It’s all in Section 202 of the Energy Independence and Security Act of 2007.

If EPA decides that algae should be included, that creates a big opening for companies such as Sapphire Energy similar to the opening for cellulosic ethanol makers such as Verenium Corp. For algae to be included, the law says it needs to have no more than 50% of the “lifecycle greenhouse gas emissions” of gasoline and diesel. This could be tricky, says David Woodburn, an alternative energy analyst with ThinkEquity. “The hard part for me is understanding how the EPA plans to calculate the GHG emissions of algae fuels, based on the variety of feedstocks (sugar, CO2, other), processes (open ponds, photobioreactors), and algae varieties being explored – especially before November,” he says, noting when the rules are supposed to be finished.

The inclusion of algae is potentially good news for Exxon, which recently said it would invest up to $600 million in a venture with Synthetic Genomics to study ways to turn algae into a crude-like oil. Without the EPA’s blessing, the volumes of oil that might one day be generated by this effort ironically wouldn’t have counted as advanced biofuels.

And, whoever said the federal bureaucracy isn’t responsive? In mid-July, Sen. Jeff Bingaman, chairman of the Energy and Natural Resources Committee, critiqued in-the-works Renewable Fuel Standard rules by pointed out that algae-based fuels “have no home in” them. He argued that the government shouldn’t “pick winners.”

Three days later, EPA official Sarah Dunham speaking at a National Academy of Sciences panel praised algae and said it would be included in the final rules, according to Stoel Rives, which cited InsideEPA.com, a subscription based news service. A copy of her presentation wasn’t readily available. If someone has a copy, please pass it along and we’ll post a link.

Now, will algae also qualify under Internal Revenue Service rules for the $1.01 gallon credit?

Joule Biotechnologies Seeks to One-Up Algae

This decade has seen the passing of scores, if not hundreds of startups claiming to have the fix for our petroleum dependence. So far, not a single one has proved competitive with gasoline or diesel fuel. So it’s not unreasonable to be cautious of the latest, Joule Biotechnologies, a company that says it will be producing fuel for around $50 per barrel (with government incentives) a couple years out.

Joule is at least evidence of a changing of the technological guard, though. Instead of relying on chemical conversion of biomass (corn, palm oil, wood and so forth), the company, which just emerged from stealth mode, focuses on synthetic biology. They claim to have biongineered an organism that uses photosynthesis to produce fuel. Just add sunlight and water.

In keeping with its sun-powered status, the system will look a bit like solar panels. The microorganism will be encased behind protective glass, probably to prevent outside contamination. A field of panels would funnel fuel to a central repository. According to the company, an acre of them will produce about 20,000 gallons of fuel a year, about ten times better than an acre of corn converted to ethanol.

The basic idea isn’t too far off from algae grown in closed bioreactors, but Joule, while remaining very secretive about exactly what it has, says it’s not working with algae. So maybe it’s a modified bacteria — an E Coli Frankenstein, perhaps, given new parts that cause it to split water to create hydrogen, which can then be combined with varying amounts of carbon and oxygen to create complex hydrocarbons.

The key to whether the idea works or not is whether this mystery microorganism can be kept functioning smoothly. Bioreactors are, unfortunately, quite expensive. That fact, combined with the difficulty of separating out the oil they produce, has kept algae from being a viable source for fuel. Joule can’t do anything to make glass and metal cheaper, so one of their major innovations has to be figuring out how to open a spout in the side of their bioreactor panel and drain off fairly pure fuel.

At the same time, they’ll be draining other substances, too. Taking another page from the algae playbook, Joule says it’s going to produce chemicals that it can sell separately from the fuel. There are plenty of chemicals that go for much higher prices than transportation fuel does, so this detail could be the other linchpin holding the economic plan together. But every added byproduct also adds another layer of complexity.

But while Joule is working to get all these details right — it says it will be producing at fairly significant scales in 2011 — expect more companies like it to pop up. Synthetic biology is the new frontier of green technology; in fact, the few details available on Joule bear more than a passing resemblance to what Craig Venter, a biotech celebrity, plans to do in a joint venture between his company, Synthetic Genomics, and Exxon. Just without the algae.

A New Entrant In Algae: Targeted Growth

Cyanobacteria need help.

Cyanobacteria, or blue green algae, are not incredibly oily. Only about 5 percent to 10 percent of their body mass in a natural state consists of lipids, which can be turned into biofuel, according to Margaret McCormick, general manager of the biobased materials unit at Targeted Growth. By contrast, some species of Botryococcus can achieve a lipid content of up to 70 percent to 80 percent after genetic engineering.

Cyanobacteria, though, has definite advantages. One, it grows fast. Two, years of genetic research exists.

"The strains have been sequenced and the genetic tools exist to manipulate their genome," she said.

To that end, Targeted, one of the leaders in genetic research, is trying to boost the oil content. It has already created versions of cyanobacteria with 20 percent to 40 percent of their mass in lipid. Next year, it hopes to show that it can produce this type of algae in large enough quantities to support a pilot manufacturing facility. Ideally, Targeted will be able to show that its algae can produce 2,000 to 3,000 gallons of oil a year per acre and show a pathway to get to 4,000 to 6,000 gallons an acre a year. (UC Berkeley's Henrik Scheller by the way puts the maximum amount of oil that algae can produce at 4,385 gallons per acre. That is high for a fuel crop, but its far lower than some claims in the algae industry.).

The company likely won't make fuel itself. Instead, it would partner with a fuel producer. Targeted could potentially work with companies growing algae through sunlight or fermentation, she said. Targeted is also looking at ways to milk, rather than kill, algae. It all depends on how the algae will get processed downstream.

Targeted has already been working at maximizing camelina for fuel production, an oily plant that grows on marginal lands and is poisonous to humans.

Claflin hopes to grow algae for fuel source

By Gene Zaleski, The Times and Democrat, Orangeburg, S.C.

ORANGEBURG, SOUTH CAROLINA: A Claflin University spin-off is nearing the completion of its study into the feasibility of developing an alternative fuel plant and research park.

Organic Bio-Energy Inc., a Claflin spin-off, and Greer-based Green Energy Partners joined together in April 2008 to study the feasibility of building a $75 million, 35-acre biofuel plant/research park at the John W. Matthews Industrial Park at the corner of U.S. 176 and U.S. 301.

Now the outstanding question remains: Will the project become reality?

Dr. Rebecca Bullard-Dillard hopes so. She's Organic Bio-Energy's vice president for research and chair of the Claflin biology department.

"At present, all parties are enthusiastic and working toward bringing the project to fruition if the final decision is a 'go,'" Bullard-Dillard said. "Alternative energies are going to have to emerge if we are going to meet the demands of our economy.

"The ability to participate in that opening global market for the county of Orangeburg would be a very significant occurrence."

The feasibility study is 95 percent complete, she said.

In addition to Claflin, the Orangeburg County Development Commission and park developers would all be partners in the project, Bullard-Dillard said.

She declined to give details on discussions or specifics about the project's park developers.

OCDC Executive Director Gregg Robinson also declined to comment on, "projects we may or may not be working on."

"We have some exciting green energy opportunities that are considering Orangeburg County," Robinson said. "We are working with Claflin University and I am excited about the technology coming out of one of our great institutions."

The county has continued to look for ways to tap into alternative fuel possibilities, Robinson said.

"We are trying to do our best to bridge the gap between agriculture and advanced science," he said.

"We see this as the future of research and it is critical we make a contribution in this area," said Vivian Glover, Claflin University assistant vice president for communications.

Bullard-Dillard hopes to see a ground-breaking in early 2010 with operations starting in the summer of 2011.

When operational, the annual output would be 4 million gallons of synthetic biodiesel, 1 million gallons of biobutanol in the first stage of the process and 44 megawatts of electricity.

The university estimates the project could create 100 jobs over a five-year period from agricultural workers to loggers.

Bullard-Dillard declined comment on specific companies engaged in the project due to contractual arrangements.

One of the processes that will be examined will be algae propagation. Algae can extract carbon dioxide from exhaust and convert it to sugars via photosynthesis. About two tons of algae can remove one ton of carbon dioxide.

Once the algae are harvested, they can be converted to ethanol or biodiesel.

The site could also include other alternative energy projects, such as biofuel production facilities that will use cellulosic materials as feedstock.

Claflin's project received an $180,000 grant through the S.C. Department of Agriculture and the S.C. Energy Office in April 2008. Despite constitutional questions related to the passage of a renewable energy grant benefiting the project, it is still moving forward.

In June 2008, Greenville businessman Edward "Ned" Sloan successfully argued that the grants measure was a part of a bill that addressed a slew of unrelated items. Sloan said the energy grants were bobtailed onto a bill having to do with job tax credits.

The S.C. Supreme Court struck down more than $2 million in renewable energy grants previously approved across the state.

But fortunately for Bio-Energy Inc. and GEP, an appellate court reviewed the matter and decided the first two rounds of grant funding -- of which the Orangeburg County project was a part -- could go through.

ExxonMobil invests in biofuels made from algae

With oil companies as BP and Shell already well invested in solar, biofuels and wind – BP, for example, just announced it has moved into full construction of a second phase of the Fowler Ridge Wind Farm in Indiana – ExxonMobil’s decision to launch a biofuels program comes as no surprise.

“Meeting the world’s growing energy demand will require a multitude of technologies and energy sources”, said Dr. Emil Jacobs, vice president of research and development at ExxonMobil Research and Engineering Company. “We believe that biofuels produced by algae could be a meaningful part of the solution in the future if our efforts result in an economically viable, low net carbon emission transportation fuel”.

In a coalition with leading biotech company Synthetic Genomics Inc. (SGI), Exxon expects to spend more than $600 million in increasing the scale of algae production as well as the manufacturing of finished fuels.

“The real challenge to creating a viable next generation biofuel is the ability to produce it in large volumes which will require significant advances in both science and engineering”, said Dr. J. Craig Venter, CEO of SGI.