Corn—or the cellulose in everything from wood chips to crop stalks—are often touted as the basis of the fuel of the future. But Microsoft founder and billionaire Bill Gates is betting that algae will provide the answer to our future fuel needs. He's so sure, in fact, that last week he joined the Rockefeller family and London-based Wellcome Trust to invest $100 million in a California start-up devoted to churning out biofuel from this tiny primitive plant.
San Diego-based Sapphire Energy, which launched in May, plans to use the money to produce more than 10,000 barrels of so-called green crude (oil from algae that is chemically identical to fossil oil) in as little as three years.
Sapphire did not respond to repeated requests for comment on its technology. But company background materials (pdf) note that it uses "photosynthetic microorganisms, such as algae, sunlight, [carbon dioxide] and nonarable land."
Adds the background paper: "The end product is not ethanol—and not biodiesel. The end product is, in fact, gasoline."
Sapphire Energy is one of more than a dozen companies that have sprung up in recent years to harness algae's power to make and stockpile oil. "Algae stores oil because it's energy dense and [algae] want to use it for fuel" (similar to the way animals store energy reserves as fat), says Jonathan Wolfson, CEO of South San Francisco–based Solazyme, Inc., which produces its algal biofuel in the dark. "Algae is the best in the world at taking chemical energy and turning it into an actual chemical, but it's going to take a long time to make it best at harvesting photons."
That's why Solazyme uses industrial fermenters, such as those used by the pharmaceutical industry to produce insulin, to grow batches of algae in the dark. Instead of feeding on sunlight and carbon dioxide (CO2), Solazyme's genetically engineered algae produce oil from sugar water inside these large tanks.
"Some strains of [algae] come from a swamp in Africa, some strains from a high-altitude snowfield in South America," says microbiologist Harrison Dillon, Solazyme's chief technology officer and co-founder. "We take these and we find which ones are making oil efficiently and which ones are making oils that are appropriate for use as transportation fuel."
His company, founded in 2003, has already produced thousands of gallons of the oil—and turned it into everything from biodiesel to fuel the company car (a jeep) to cooking oil, and even aviation fuel that has the same characteristics as Jet A derived from petroleum. "We're not at commercial economics," Dillon admits, noting that algal fuel is even more expensive than today's gas prices. But "every month the cost of this stuff is getting cheaper."
Costs for algae-based fuel currently range from $10 to $100 per gallon, according to systems engineer Ron Pate at Sandia National Laboratories. "The idea [is] bringing algal oil down to $1 or $2 per gallon at a scale of 50 million gallons [190 million liters] per year."
High cost is a problem throughout the algal biofuels industry. "It's energy cost to pump the water," says Craig Harting, chief operating officer for Vancouver-based Global Green Solutions, which is building 100 bioreactors (large plastic devices used to grow algae) at a pilot plant in El Paso, Tex. "It's capital cost to build bioreactors. It's the harvesting and extraction process."
As a result, most companies say they have yet to determine the consumer price tag for algae-derived oil—or to produce much of the stuff—though Wolfson says Solazyme's goal is $40 to $80 a barrel—competitive with fossil oil.
But the technology also offers a potential solution to climate change. One of the first algal energy companies—Boston-based GreenFuel Technologies—tested algae bioreactors three years ago on a coal-fired power plant in Arizona to determine how well algae absorbed planet-warming carbon dioxide emissions. And algae exposed to the atmosphere actually pull CO2 out of it and turn it into protein and oil, both of which can be used.
"We need a place with land and a CO2 producer" to grow algae, says mechanical engineer Bryan Willson of Colorado State University, who has helped develop the technology for Solix Biofuels in Fort Collins, Colo. That company has partnered with neighboring New Belgium Brewing Co. to use the CO2 shed from the latter's beer-making process to feed algae. "Our long-term target is 8,000 gallons [30,300 liters] [of oils] per acre per year." By absorbing CO2, the algae can produce a valuable item such as fuel—and similar efforts to capture carbon with algae are underway in Spain at a cement plant.
That still leaves the issue of water; other biofuels such as ethanol require thousands of gallons of fresh water for every gallon of fuel produced. But "algae can use wastewater or salty water," Pate notes. "It's an aquatic species."
At present, however, none of the algal biofuel enterprises are known to be using such wastewater or saltwater for their processes—as freshwater species have proved more tractable. And most will need at least a few years before they can begin producing such biofuel in significant quantities. But if the price is right "the market is essentially infinite," Solix's Willson says. "We do believe we can achieve significant scale. We see this as a global need."