Algae: Simply the best fuel for our present and future!

You can eat it, use it in cosmetics, fertilize with it and now fuel your car or plane with it – Algae!

Why Algae? Check out the Biofuel crop yields:

Soybean 40-50 gal/acre

Rapseed 110-145 gal/acre

Mustard 140 gal/acre

Jatropha 175 gal/acre

Palm Oil 650 gal/acre

Algae 10,000-20,000 gal/acre = abundantly clear!

I heard you…What does it cost? If the annual yield is 15,000 gallons per acre, then the cost of producing algae biodiesel $18.56 per barrel of oil equivalent. Very competitive!!!

Power station and other emitters of CO2 can capture emissions to increase crop yields.

Independence Bio-Products (IBP) of Dublin, Ohio has produced algae oil, which has been converted to jet fuel and then tested by the Air Force Research Laboratory at Wright Patterson Air Force Base. The algae was grown in open ponds in Ohio and harvested with IBP’s patent pending system. This milestone is a part of a federally funded project to examine Algae to Fuel (ATF) processing strategies. IBP founder and President Ron Erd stated that testing of the algae-derived fuel sample by the Air Force Research Laboratory has confirmed that the composition of the fuel derived from the Ohio-grown algae is similar to fuel derived from other plant oils such as soybeans, Jatropha or camelina—which are already being investigated as jet fuel precursors.

Since June 2009 the Algae to Fuel (ATF) project has been exploring the best strategy for creating, cultivating, and expanding an “algaculture” industry for Ohio. This effort has been divided into examination of three main areas: 1) selection of algae suitable for optimizing oil production based on climate factors; 2) development of cultivation systems (growing locations, harvesting, dewatering, and separation techniques); and 3) cultivation strategy (algae harvesting, processing into value-added products, etc.). This public/private technical effort has been jointly led by three Ohio organizations: the Ohio Aerospace Institute (OAI) of Brook Park, the Edison Materials Technology Center (EMTEC) of Dayton, and the Center for Innovative Food Technology (CIFT) of Toledo along with several other industry and university collaborators, including IBP. The recent development by IBP represents the achievement of one goal of the federally funded initiative: to demonstrate the feasibility of deriving military fuel from Ohio-grown algae.

As we watch this play out, here are some algae biofuel firms that you should know about:

Solazyme: (SZYM) The firm uses synthetic biology and genetic engineering to tweak algal strains for better biofuel yields. Based in South San Francisco, the company grows its algae in fermentation tanks without sunlight, by feeding it sugar. The company is one of the few that have managed to do deals with a major oil company — Chevron — as well as biodiesel maker Imperium Renewables. Backers include Blue Crest Capital Finance and The Roda Group.

Blue Marble Energy: The Seattle-based company finds algae-infested polluted water systems, cleans up the environment, and turns the algae into biofuel.

Inventure Chemical: Also out of Seattle, this startup is working on an algae-to-jet fuel product, and told the Seattle PI that it has already created algae-based fuel in 5- to 10-gallon tests and plans to set up a test plant to see if it can produce between from three and 15 million gallons of biofuel each year. Investors are reported to be biodiesel company Imperium Renewables, Cedar Grove Investments, Brighton Jones Wealth Management and undisclosed angel investors.

Solena: Solena uses high temperatures to gasify algae and other organic substances with high-energy outputs. The Washington state-based company is talking with Kansas power firm Sunflower to build a 40-megawatt power plant run on gasified algae, according to the NYT; the algae would be grown in big plastic containers, and fed by a combination of sunlight and the sodium bicarbonate biproduct of the adjacent coal plant.

Live Fuels: Instead of attempting to convert algae directly into ethanol or biodiesel, this startup is trying to create green crude that could be fed directly through the nation’s current refinery system. The Menlo Park, Calif-based startup uses open-pond algae bioreactors and plans to commercialize its technology. Investors include the Quercus Trust (David Gelbaum’s well-known environmental funding group) and Sandia National Labs.

Solix Biofuels: Like Live Fuels, Solix is also working on a biocrude, but using a closed-tank bioreactor set-up. Based in Fort Collins, Colo., and founded in April 2006, the firm is backed by Colorado State University’s Engine and Energy Conversion Laboratory. The company has said that construction will begin shortly on its first, large-scale bioreactor at the nearby New Belgian Brewery, where CO2 waste produced during the beer-making process will be used to feed the algae.

Aurora Algae: Developed at the University of California at Berkeley, the company is using genetics to isolate exclusive algae strains that can efficiently create biodiesel. Aurora claims the technology can create biodiesel fuel with yields that are 125 times higher and have 50 percent lower costs than current production methods. Backers include Gabriel Venture Partners, Noventi, Oak Investment Partners (and angel investors include Auttomatic CEO Toni Schneider).

Aquaflow Binomics: The New Zealand company’s goal is to become “the first company in the world to economically produce biofuel from wild algae harvested from open-air environments.” Like Blue Marble Energy, the three-year-old startup sources its algae from algae-infested polluted water systems, cleaning the polluted environment in the process.

The publicly held Aquaflow used its algae-based biodiesel to run a Land Rover driven by New Zealand’s Minister of Climate Change. And it’s been working with Boeing on algae-to-bio-based jet fuel.

Bionavitas: Based in Snoqualmie, Wash., the company says it has developed technology for the high-volume production of algae using bioreactors. Check out their WIPO patent app for the bioreactor setup.

Bodega Algae: Roots at MIT, the firm has developed a set-up to grow algae in bioreactors with light and nutrients that it says is lower cost and more efficient than the current methods.

Seambiotic: The Israeli based firm produces algae for applications, including the budding biofuel industry, and is working with Inventure Chemical. The firm has been working with Israeli Electric Company, utilizing IEC’s smokestack for a source of CO2 and grows algae in eight open algae ponds.

In closing, with China’s appetite for energy continuing to grow and political turbulence rumbling across the world’s primary oil-producing region, oil experts say there is only so much that OPEC (the Organization of the Petroleum Exporting Countries) can do to ease prices. As history has taught us time and time again supply lines of critical feedstocks and technology must be within the sovereign’s physical domain of control -- pass me the pond scum… 

July 1 Aviation Bio-Fuel Independence Day!!!

Primary energy use will grow by nearly 40% over the next twenty years, with 93% of the growth coming from non-OECD (Organization of Economic Co-operation and Development) countries. Non-OECD countries are seen to rapidly increase their share of overall energy demand from just over half currently to two-thirds.
Global liquids demand is forecast to reach 102.4 million barrels per day (mmbpd) in 2030. The net growth of 16.5 mmbpd over the next 20 years comes exclusively from the emerging economies of the non-OECD.

Biofuels production’s (high case scenario) is expected to reach 16.7 mmbpd by 2030 from 2.3 mmbpd in 2011. Continued policy support, high oil prices, political instability (oil producers) and continued technological innovations all contribute to the rapid expansion.

Beginning July 1, 2011 (subject to regulatory delays), fuel processed from organic waste or non-food materials, such as algae or wood chips, may comprise as much as 50% of the total fuel burned to power passenger flights, ATA spokesman Steve Lott and a Boeing Co. (BA) official told Bloomberg.

“The real winners of this type of regulatory breakthrough will be technology companies involved in the production of aviation biofuels,” said Harry Boyle, an analyst at Bloomberg New Energy Finance in London. “The biotech-biofuels business models of Amyris Inc. (AMRS), Codexis Inc. (CDXS), Gevo Inc. and Solazyme Inc. are all making claims to these types of new markets.”

Other biofuels companies that may benefit from opening up the $139 billion-a-year aviation fuel market are Neste Oil Oyj (NES1V) of Finland, Spain’s Abengoa SA and Honeywell International Inc. (HON)’s UOP unit, which is developing a fuel-making technology.

General Electric Co., the world’s biggest jet engine maker by sales last year, said at a 50% blend level it doesn’t expect to see any impact on engines or operability.

Airbus and Boeing, which together manufacture about 80% of the world’s passenger planes, are planning to set up biofuel production chains across the world. Airbus is working on a supply hub in India where it’s talking with government and airline officials. Its aim is to form joint ventures and partnerships with growers, transporters and refiners. Boeing is negotiating with companies across the supply chain in South America.

Fuel from inedible plants or waste doesn´t put price pressure on crops as can fuel from corn, sugar cane or soy.  Honeywell and Indian Oil Corp., the nation’s largest refiner, are planning to establish a pilot biofuel production plant in India next year, James Rekoske, vice president of renewable energy at Honeywell’s UOP, said. It would be Honeywell’s first pilot facility in Asia and the companies will examine the feasibility of using plants such as jatropha and pongamia to make renewable jet fuel.

The 30 component stocks of the Biofuels Digest Index are:
Archer-Daniels-Midland (ADM)


Algae.Tec (AEB.AX)


Amyris (AMRS)


The Andersons (ANDE)


Aventine Renewable Eenergy (AVRW.OB)


Bluefire Ethanol (BFRE.OB)


BioFuel Energy (BIOF)


British Petroleum (BP)


Biox (BX.TO)


Codexis (CDXS)


CleanTech Biofuels (CLTH.OB)


Cosan (CZZ)


Danisco (DAY.F)


DuPont (DD)


Gevo (GEVO)


Green Plains Renewable Energy (GPRE)


GreenHunter (GRH)


Gushan Environmental Energy (GU)


Lignol Energy (LEC)


Monsanto (MON)


Novozymes (NZMB.BE)


OriginOil (OOIL.OB)


Pacific Ethanol (PEIX)


PetroAlgae (PALG.OB)


Rentech (RTK)


Royal Dutch Shell (RDS-A)


SunOpta (STLK.T)


Syngenta (SYT)


Valero (VLO)


Verenium (VRNM)

The only question now is: will there be enough chips to go around?

Sources: IEA, BP 2030 Energy Outlook, Bloomberg.