What’s (not) happening with Algae Biofuels

Next generation algae biofuel is a fuel derived from growing synthetic (genetically modified) algae and decomposing it to extract oils that can be used to substitute conventional petroleum. It is (was?) envisioned principally as a fuel for vehicles and aircraft and therefore as a possible replacement for gasoline/kerosene.

Before we go any further, any discussion on the viability of algae biofuels needs to be framed along these points:

  • Can biofuels from algae compete on price with fossil-derived petroleum?
  • Is it carbon neutral, emitting only CO2that it absorbs first during growth?
  • Can it scale?
  • Does algae biofuel yield substantial energy relative to the energy inputs involved in its production? (Energy Return on Energy Invested)

Basically, you’re asking yourself: is it better than what’s already out there?
The answer is: Nope, at least for now.

The Value Proposition of Algae Biofuels

Potentially the most promising of biofuel technologies, algae set themselves apart from all other biofuel feedstocks, for the following reasons:

  • Algae do not compete with farmland & water: Algae have been shown to thrive in polluted or salt water, deserts and other inhospitable places, bypassing the age old (and legitimate) problem which has plagued the development of conventional biofuels.
                                     Optimum land for growing biofuel sustainably

    ATAG
    Source: ATAG

    Circle sizes are estimates of potential locations for new generation biofuel feedstock production.

  • They do not have an impact on food prices: Since conventional biofuels like corn and sugar are also used as food for us, and farmers can get better prices for their corn and sugar if they sell them to biofuel refiners, leading to volatile food prices. Hartmut Michel, Nobel Prize winner, explains, that when you have “energy plants” competing with food plants, we are all worse off.
  • They feed off CO2: According to Jansson, Wullschleger, Kalluri, & Tuskan, human activities are responsible for an annual emission of 9 gigatons of carbon (33 gigatons of CO2). Whilst terrestrial and oceanic systems manage to absorb 3 and 2 gigatons respectively, leaving the remaining 4 gigatons in the atmosphere making algae ideal for carbon capture from sources like power plants.
  • Fast Oil Production Rate: One of the biggest advantages of algae for oil production is the speed at which they can grow. Some studies estimated that algae produce up to 15 times more oil per square kilometer than others pointed to algae strains that produced biomass very rapidly, with some species doubling in as few as 6 h, and many exhibiting two doublings per day.

So the promise of algae oil is tantalizing: it’s like the silver bullet.

In a nutshell: scientists were meant to identify a strain of algae to be genetically modified to produce lipids (oils) very quickly while feeding on carbon dioxide from the atmosphere. The lipids would be harvested and converted into usable oil while they ducked carbon from the atmosphere. And all this was meant to be economical and scalable.

  🔥 From 2003-2012: The Hype Was On🔥

Turning pond scum into a petroleum-like fuel is both laborious and expensive, yet the end goal was very alluring. As Eric Wesoff ironically puts it, “dozens of companies managed to extract hundreds of millions in cash from VCs in hopes of ultimately extracting fuel oil from algae”.

Researchers and algae oil companies were making huge claims about the promise of algae-based biofuels; the U.S. Department of Energy caught on early and was also making big bets through its bioenergy technologies office; industry advocates claimed that commercial algae fuels were scalable in the near-term and investors jumped the gun.

In 2006, there were a meager handful of specialized companies devoted to commercializing algae biofuel. By 2008 there are over 200, most of which had been active for less than a year. While most of these were angel investor or venture capital backed, there were also some bigwigs that took a stab at developing algae biofuels, such as Shell, Johnson Mathey, General Atomic, Boeing, Honeywell, DuPont, BP, and others.

However, in spite of optimistic investors and bold promises, a few hard truths began to transpire.  It became clear that whilst the technology was indeed “promising”, scaling it in a time frame relevant to our needs at an economic price was not within reach, anytime soon.

Cracks began to show in investment patterns as Exxon Mobil decided to invest $600 million into a joint venture with Craig Venter’s Synthetic Genomics for research into algal fuels, which they quickly scaled back to $300m and then to $100m. Another star player, Sapphire Energy, an algae biofuel start-up, which raised over $100 million in venture capital, including from Bill Gates’ investment firm Cascade Investment, has pivoted away from algae fuel and is now producing omega-3 oils and animal feedstock, while the famous startup GreenFuel, which grew out of Harvard and MIT research, went bust blowing through $70 million.

In the meantime, the surviving algae oil companies have shifted their core business and “branched out” to produce more economically sustainable co-products, like supplements, algae cosmetic oil, pigments and animal feedstocks and products for the pharmaceutical and chemical industry. Here is a list of algae oil companies that have been forced to move away from algae oil.

 So what went wrong?

I think that many stakeholders were blindsided by the great potential of the technology. To date, no company has been able to grow algae at the large enough scale required to produce meaningful quantities of a fuel, affordably. While there are many hurdles, I identified these two main reasons:

  • The basic science behind its cultivation:
    • The first part of the life cycle of the algae turned out to be burdened by obstacles.  As companies developing these algae have attempted to scale up, problems emerged which they could not have anticipated, including the emergence of competitor algae, predators such as microscopic animals that ate the algae, the occurrence of algae diseases in the form of bacteria and fungi and temperature fluctuations, which could kill the algae.
    • Whilst algae can grow quickly, the can do so only in the presence of sufficient nutrients. Algae can obtain carbon, their primary nutrient from atmospheric carbon dioxide, but the amounts present are insufficient to promote the rapid growth that was observed under lab conditions. That requires something more than 10% CO2 concentration in the atmosphere and in fact some of the earliest attempts to grow algae as a fuel source were predicated upon the development of pervasive industrial carbon dioxide capture.

  • Energy Return on Energy Invested:
    Researchers who looked at life-cycle analysis and the EROI/EROEI found algae biofuels would not have a positive energy balance, in other words, you’d have to put more energy in cultivating, harvesting, refining and transporting the algae biofuel than you would get out of it once it’s burned.

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    EROI is a straightforward and simple concept to get your head around, and it is defined as the energy contained in one unit of fuel divided by the total nonrenewable energy required to produce one unit of fuel. It’s a way of getting a handle on how energy-efficient your energy production is.

    The breakeven point is 1. When the EROI is 1 there is no return on the energy invested, and the entire investment has been wasted. When the EROI ratio is higher, it also signals that the energy from that source is easy to get and cheap. Conversely, when the number is small, the energy from that source is difficult to get and expensive.

    Now, I will be the first to admit that there is no consensus on the methodology used to calculate either Life Cycle Analysis or EROI, making calculations on it is somewhat abstract. In part, it depends on what one counts as an “input”, and neither energy companies nor biofuel producers report detailed information on their energy consumption, resulting in researchers generating assumptions in order to calculate them.  To calculate the energy input, researchers have to make an estimate based on the dollars spent on various processes and goods, which means that two reports calculating EROI will likely yield different results, because of the different variables used.

    In spite of this ambiguity, The National Academy of Sciences (Chapter 8 NAS 2012) concludes: “An energy return on investment (EROI) of less than 1 is definitely unsustainable. An algal biofuel production system would have to have or at least show progress toward EROI within the range of EROI required for the sustainable production of any fuel (Pimentel and Patzek, 2005). Algal biofuels would have to return more energy in use than was required in their production to be a sustainable source of transportation. Microalgal fuels use high-value energy inputs such as electricity and natural gas. If these high-quality energy sources are downgraded in the production of algal fuels, it is certainly a sustainability concern that can only be truly understood through careful life-cycle analysis. EROI of 1, the breakeven point, is insufficient to be considered sustainable. However, the exact threshold for sustainability is not well defined. Hall (2011) proposed that EROI greater than 3 is needed for any fuels to be considered a sustainable source. EROI can be estimated with an LCA that tracks energy and material flow”.

    Here is a look at the available literature on Algae EROI:

    EROIbio.PNG
    Source: Quantitative Uncertainty Analysis of Life Cycle Assessment for Algal
    Biofuel Production, 2012

The studies that gave algae biofuel a positive EROI depended on co-products (something produced along with a main product which carries equal importance as main product, for the pharmaceutical, animal feed, and chemical industry) to tip the balance from a negative energy return to a positive.  But the Department of Energy pointed out “if biofuel production is considered to be the primary goal, the generation of other co-products must be correspondingly low since their generation will inevitably compete for carbon, reductant, and energy from photosynthesis…and coal-fired power plant carbon dioxide”.

So far, nobody has been able to make fuel from algae for a cost anywhere close to cheap, let alone competitive. Companies are trying to overcome these problems, but we will not be seeing companies selling large amounts of algae biofuels anytime soon.

tl:dr -> Cool idea, but due to unreliable cultivation methods, large nutrient requirements (of carbon, nitrogen, and phosphorus), low EROI, high capital costs, and competition from below $50 petroleum, the technology isn’t close to being ready.


 

Reading up on the EROI was very interesting so you might be keen on it too. Check out the following sources:

Peakoil.com,. (2014). EROEI as a Measure of Biofuel Effectiveness

Epa.gov. (2010). Renewable Fuel Standards Program Regulatory Impact Analysis Office of Transportation and Air Quality: The United States Environmental Protection Agency.

Inman, M. (2014). Behind the Numbers on Energy Return on Investment.

 

 

 

 

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