Post 1: The Algae Boom (Bubble?)

So, these days, even the average grocery clerk has heard the hooplah about algae biofuels and wants to know if this is really going to solve the end-of-oil problem.  This is a very new phenomenon.  When I first started working on algae biofuels in 2006, the Google filter I set up to find news about algae brought back 95% stories about the dangers of algae blooms (more ‘bout that later), and how to kill algae — precious little about algae farming.

That has changed, in a major way.  Now, every time one turns around, there’s a new, heavily-funded algae play.  Billions of $$$ are being pumped down a global algae biofuels R&D pipeline.  Everyone from governments (e.g. DARPA and DOE, and now NASA) to giant corporations (see Exxon’s $600M), to small-scale DIY-ers (like my are throwing their hats into the ring.


Well, before we launch off into peak oil, etc., let’s look at fundamentals.  For those new to this, algae are microscopic plants that float in water.  Through the natural process of photosynthesis, which algae perform at higher rates than land plants because of their small size, algae produce more than half of all the oxygen we breath, and remove a corresponding amount of carbon from the atmosphere, an amount far exceeding what we humans produce.  Despite being microscopic, algae blooms are frequently visible from outer space, can annihilate huge ecosystems, and even threaten to stop the Olympics.

There is much more to say about algae as they exist on our planet already – their astonishing diversity and ancientness, for example, but given their sheer mass and reproductive capability it would seem natural to want to redirect this to human profit, as we have with their multicelled brethren.  And recent events – related to the exhaustion of current approaches to agriculture and fuel production — have kicked development of algae farming into high gear.  Triple-digit oil prices have motivated a global drive to find renewable replacements for fossil fuels – i.e., biofuels – creating a demand for agricultural output that far outstrips what land crops could ever provide, given available arable land and fresh water.

Which brings us to the main bullet points of any algae biofuel production pitch:

  1. Algae don’t need arable land, any special kind of land, or even land at all – they can be grown in deserts, or on the surface of the ocean;
  2. Algae don’t need fresh water – they can be grown in salt water, or in saline ground water, and especially love waste water, i.e. sewage;
  3. Algae are extremely productive on a per-area basis, producing more biomass per area than land crops;
  4. Algae can convert over 50% of their biomass into oil, far more than the few percent of land crops, so their per-area oil production is 100x or more of typical current oil-generating crops;
  5. Algae can clean up waste water, efficiently removing nutrients that would otherwise pollute the environment;
  6. Algae can clean up carbon dioxide and smog-forming nitrogen oxides from industrial exhaust sources such as power plants;
  7. Algae can produce a wide range of products from biofuels to nutraceuticals, fertilizers, chemical precursors, etc.

Algae are also astonishingly diverse, and incredibly ancient, dating back to near the origin of life.  Referring to “algae” as a group is almost a misnomer, as the evolutionary-genetic expanse of micro-algae is vast.  Pick two algae, even two that look identical under the microscope, and they may be no more closely related than you are to a fungus, or even further apart.  It has been about three and half billion years since the first cyanobacterium emerged from the primordial ooze — for organisms that reproduce daily, this means a trillion or more generations — compared to a measly hundred thousand or so separating us from Australopithicus.  Add to this the huge range of organisms that have engulfed algae to take advantage of their photosynthetic apparati (and who were often engulfed in turn), and even the algae who have lost their chlorophyll to live off of chemicals and other creatures, and “algae” becomes a term so wide it almost loses meaning.

What this means, practically, is that algae grow anywhere there is water, sunshine, and CO2, producing a dizzying array of possible products.  This fact is beginning to be reflected in the diversity of algae companies — from Solazyme and Martek, growing milky yellow algae on sugar in the dark, to Aurora Biofuels, Seambiotic, LiveFuels, and many others using open ponds to make fuel from exhaust in the sun, to AlgaTech growing bright red algae in tubes in Israel, making an antioxidant worth more per gram than Colombian nose candy.  And this is just scratching the surface.

But for now, everyone is focused on one potential algae product — fuel.

Algae Biofuel — What the Fuss is All About (for now)

So, fuel.  Well, it’s no secret that oil is running out (though we may argue about the timing), or that the extraction and consumption of fossil fuels cause a great deal of harm to people and the global environment.  Triple-digit oil prices have triggered a run on alternative fuels, mostly made from land crops, but since the vast majority of potential farmland is already in use or consists of vital ecosystems, this can’t be done on a large scale without tragic consequences for food markets and the few remaining intact ecosystems, not to mention limited water resources, increased demand for fossil fuel-based fertilizers, more agricultural pollution, etc…
In rides algae to the rescue!

Such was the slogan of algae pioneer GreenFuel Technologies.  Founded in 2001, with MIT roots, GF jumped into the algae ring years before the “algae boom” — in fact, in some ways, they launched it.

By 2004, GreenFuel had a row of triangular acrylic tube photobioreactors capturing carbon dioxide and NOx from the exhaust of a power plant on the MIT campus.  They made wild claims as to the yield of algae that would be attainable, obtained $20M from a top-flight Wall Street venture capital company, and were fundamentally ‘powned by Australian physics graduate student Krassen Dimitrov, who proved using the most basic assumptions that GreenFuel’s bioreactors could never turn a profit.  (We will go into this analysis, and its limitations, soon.) They were also publicly mocked by veteran algae biofuel researcher John Benneman.

GreenFuel fired back at its critics, rebutting Dimitrov, and legally threatening Dr. Benneman.  And the fundamental disdain which they showed toward basic physics and economics did not prevent them from getting further funding.  But reality ultimately caught up with them; in mid-2007, they fired half their staff, and in 2009, they went out of business, but not before they managed to get involved in a mafia-linked scam in South Africa.  $70M+ down the drain.

Losing money on alternative energy technologies is nothing new.  But have we learned anything?  Are people giving money to current algae co’s showing GreenFuel-like signs?

And what was this “Reality” that GreenFuels ran up against?

Next: Sub-Prime Algae Companies!


8 Responses

  1. Okay now lets look at the big picture- ocean farming of algae.
    I know you are not near one but I am in Hawaii. I was asked by Dr. Bayless’s assistant of Ohio about this and I say why not. Our sewer system is not pure enough for the PA now so the source of nutrients is there in large scale. CO2 is just vented by the industry here so it could be used by pipeline to make a big,well,bloom to harvest. It would be very interesting to have a forum for this kind of conversation. Australia thought of 60 square miles as the limit for CO2 in the open ocean. I think not is it was off China. With huge amounts of algae how to harvest means how to grow it too.
    If this ocean system is to work then it has to have solutions to containment and may have to be 20 feet under the surface so as not to be in marine activity. That is both storms and traffic near shore. Light could be transferred to the area from the surface from buoys that have solar collectors and distribute via fiber optics. Massive project could be scaled to areas like the Gulf, the Great Lakes, and both oceans. All that oxygen from the algae would be good for the environment.

  2. Actually, I do live next to the same ocean you do, Kimo. I am glad to see you bringing up ocean-based algae farming, as that is what I am working on now, at NASA.

    We are tackling the issues relating to ocean surface-based deployment, and they’re not simple. More on this soon…

  3. I have seen this Project and it is so very interesting because the algae is also being made into plastic. This type of research may mean that all the bags of algae would be harvested in say an acre of ocean in a few days then used as biomass in a gasification plant to make energy. Say you have a weekly collection and redeployment of containers, this would use more than waste sewer water, it would clean the air. That is a great by product that is also what travelers to distant plants need. A recycled loop if you may.

  4. aaron,

    Long time friend of Amanda, first time reader of your site.

    I’ve noticed that at times Obama can’t open his mouth without saying “alternative fuels” and because of this there are quite a few companies–especially penny stocks–who are trying to capitalize on this. I’m looking forward to your next post about sub-prime algae companies.

    Two companies I’ve been following and seem to be getting a lot of hype are bio-centric energy holdings (BEHL) and Vega Bio fuels (VGPR). BEHL is working out of Santa Monica and VGPR claims to be working in Georgia and lots of plants opening in China (this seems like a red flag). But, have you heard of either of these two companies, or who do you see as being on the forefront of Algae fuels, both as an environmental and economical investment standpoint.


    • A quick look @ the BEHL website reveals that they do not seem to have anyone on board who has any algae experience…
      Wood pellets are outside my expertise so I won’t comment on Vega.

  5. thanks aaron, that’s pretty interesting to know because of the hype with behl you’d think they were on the forefronts of algae fuel. Looking forward to next post.

  6. Yeah algae has a lot of potential but there are many unscrupulous people trying to capitalize on people’s ignorance…what I’m doing here is to try to help to relieve some of that ignorance…

  7. Any chance of getting an update on BARD? On Feb 25, and in glowing language, 2011 Governor Tom Corbett (PA) sent them a congratulatory letter on launching their Commercial Algae Production System. Your post of Jan10th, 2010 was quite the opposite and in which I think you referred to them as ‘clowns’. Then on April 7th, BARD’s CEO was honored at President Obama’s town meeting at KIPC in Fairless Hills, PA. BARD also now states that they have ‘third party’ validation of their claims that you ridiculed. What is one to think? What is the truth here and if they are all bluster, how is it that Algae Bioenergy Solutions, LLC broke ground on the first commercial facility using BARD’s technology in Augusta, GA in early May?
    Can you help me out here if your still around?

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