Pond Scum Refineries - Algae Rears Its Slimy Head Again

Lately I’ve been hearing a lot about a company called AlgoDyne Ethanol Inc. headquartered, appropriately enough, in Las Vegas, the home of the big bet. According to Business Wire an undisclosed group of Asian investors are on the point of investing heavily in this penny stock (ADYN.OB), and various investment journals are urging their readers to jump on board.

AlgoDyne claims to be able to produce ethanol from the fermentation of algae, methanol from the anaerobic digestion of the same, biodiesel from the extraction of lipids, and a sort of coal substitute from carbonizing some of the remaining biomass, and, finally, high protein animal feed from the last residues. It’s like you can’t go wrong. If one biofuel or co-product doesn’t find a market, you’ve got two or three others in reserve.

Such metamorphoses have in fact been demonstrated in the lab, and there’s a fairly copious scientific literature on algae as a fuel source going back to the nineteen sixties. Indeed, it’s one of the oldest new ideas in the whole history of alternative fuels.

So why hasn’t it happened, and will AlgoDyne make it happen now?

The answer to the second question is, I don’t know yet. AlgoDyne has disclosed almost nothing of their supposedly proprietary technology, so whether it solves all the problems previously associated with algae, I can’t say. What I can say is that there have been problems. In spite of all the promises going back five decades, no one is making fuel out of algae today, nor did anyone ever do so in the past except in pilot runs. That should tell you something.

So what are the problems, and why would anyone want to use algae as a feedstock in the first place?

As it turns out, Algae recommends itself on a number of grounds, although those grounds vary somewhat according to which of the thousands of extant species are selected for the feedstock. But, very generally, we can say the following.

Algae far surpass all other plant feedstocks in the sheer amount of useful biomass one can cultivate on any given acre of land. Nothing else comes close, even remotely. If, for example, you’re going to select a high lipid variety of algae and use the lipids to produce biodiesel, you can, in theory, get 40,000 gallons of biodiesel as compared to 50 gallons for an acre of soybeans, the principal feedstock used today in the U.S. True, there are other potential feedstocks that far exceed soybeans as well—the Chinese tallow tree, the oil palm, and Jatropha appear to be the champs, having many times the oil yields of soy—but they’re not even in the running with algae, at least in regard to the sheer size of the yield.

Algae has a number of other things going for it as well. It can be cultivated with brackish or even salt water, though it needs a lot of it, and it grows with incredible rapidity. Furthermore, it can be aerated directly with the effluents of a fossil fuel burning power plant or factory and can efficiently convert nearly all of the carbon dioxide into biomass, making the erstwhile polluter carbon neutral. Conceivably, for instance, you could set up enormous algae farms on the largely unoccupied Baja California peninsula and use seawater from the Gulf of California for irrigation. There’s quite enough land to serve the transportation needs of Mexico, the U.S., and Canada, with plenty left over for export.

Algae are great at converting agricultural runoff into fuels and other useful products as well. In addition, they like to eat municipal wastes. That’s why you don’t see pond scums growing on pure mountain lakes. They like nasty surroundings, and they’re surprisingly tolerant of heavy metals and other toxins that will kill other feedstocks.

So why not algae as a fuel source?

That involves a bit of explaining.

Most past experiments in utilizing algae for fuel production have involved what are known as raceway ponds, shallow, open, circular water courses where the water circulates so that nutrients and oxygen from the atmosphere are made to permeate the algal mass. The fast growing algae is regularly removed from the water while fresh nutrients are constantly pumped into it. It sounds simple enough, but it entails heavy construction , and, in effect makes the cultivation of the feedstock part of a factory production process—in other words, it’s no longer agriculture in the usual sense. Estimates of the cost of constructing these raceway vary, but, by common consent, they are minimally several tens of thousands of dollars per acre, and need to be pretty extensive to be economical, so we’re talking millions to set up just the cultivation par of the process. Then, of course, there’s the separate irrigation system they require and the near necessity of having the actual biofuel production plant in close proximity since green slime doesn’t really lend itself to transport.

So what looks at first glance like a great opportunity becomes fraught with problems upon closer examination. One either has to persuade a farmer to allocate precious land on a long term basis for a production process that has never been proven commercially, or to secure land oneself, and, with it, access to abundant amounts of water. I mentioned Baja which looks good, but poses problems for foreign investors, and others have suggested the Salton Sea area in south central California. Presumably the Gulf Coast of Texas might prove suitable as well. Parts of Arizona and New Mexico might also prove suitable, though there water shortages could pose a problem. Generally, what’s needed is plenty of sunshine and land not suitable for food crops.

But even when such requirements can be met, there are problems. Experiments conducted at Stanford and at the University of Hawaii indicate that algae placed in open raceways is easily contaminated with local species lacking the requisite properties and which may push out the desirable strains. Therefore a closed system would appear to be more desirable, though the cost would escalate. If one were going with a closed system, a system of transparent pipes would appear to make more sense than a raceway. Algae can only absorb sunlight effectively down to a depth of a quarter inch, and so maximizing exposed surface is highly advantageous. A lattice or pipes would vastly multiply the active surface over a given footprint of ground, and such a scheme has in fact been proposed by two companies, GreenFuel Technologies and Solix Biofuels. The economics of such a plant are unproven to date, however.

So what are we to make of the current algal renaissance? I believe that algae definitely warrants more investment. The problems in commercializing the technology do not appear insoluble, and regardless of the cost of the production plant, it is likely to last indefinitely, since, unlike gasifiers, pyrolyzers, and thermal polymerization reactors, it is operating at atmospheric temperatures and pressures. The final stage, converting lipids into biodiesel, is a proven cost effective process, already, and some new technologies have been developed that may make it yet more cost effective. Nor do there appear to be any outstanding safety or environmental issues. Algae went nowhere in the past, not because the idea of algae feedstocks lacked merit, but because capitalization costs could not be justified with prevailing oil prices. Now that is no longer the case.

The primary problem with most biomass feedstocks is that they are not concentrated, which means much energy is required accumulate the feedstock and extract the energetic portion of it. Algae does not suffer from that limitation.

This does not mean that any current technology is necessarily good to go or that investing in these firms is necessarily a way to make a killing. It is simply to say that algae appears to be one of the better biomass options in the long term.