Biofuel scientists making headway on cheaper algae-based crude (photos)

HOUSTON – Government engineers say they have developed a cheaper way to turn wet algae into crude oil, but it may take a few years before it can be sold in any significant quantities.

Even though biofuel makers don’t have to pay a dime for oil rigs, it’s still an expensive process.  They are, after all, using extremely high temperatures and pressures to do what took algae millions of years in about an hour, and algae farmers would need massive amounts of land and water to make it competitive with the oil and gas industry.

A Department of Energy laboratory in Washington said earlier this month it has developed a new process that can churn a constant stream of wet, grassy-green algae into crude – an advance on two fronts.

The new method does not require drying the algae before it is poured into a chemical reactor, one of the most costly processes in making crude from algae. It can also process a constant flow of algae. Unlike other ways of turning wet algae into crude, the government engineers’ system can avoid breaking production into small batches, making it more suited for commercial markets, the Pacific Northwest National Laboratory said in a recent report.

“Cost is the big roadblock for algae-based fuel,” Douglas Elliott, the lead scientist on the algae project, said in a written statement. “We believe that the process we’ve created will help make algae biofuels much more economical.”

Building it

Utah-based clean energy technology developer Genifuel Corp. has licensed the process and could have a pilot plant up and running by mid-2014, said James Oyler, president of Genifuel, in an interview Friday. The company has worked with lead scientists to assess the algae project since 2008.

The plant’s system would be able to produce oil and natural gas with different feed stocks, but for now, it’s a small-scale experimental operation: It would produce less than a barrel of oil equivalent per day, but the company is already making plans to ramp up production by building bigger facilities, Oyler said.

“It’s going to take five to 10 years to get things up to production scale,” he said.

In the new process, a chemical reactor can turn algae into crude in less than an hour, and the byproducts from the process have enough phosphorus to grow more algae. Like the crude that oil derricks have pumped for decades, the stuff can then be refined into engine food like gasoline and diesel.

The Pacific Northwest National Laboratory said in May that available U.S. land and water resources – especially in the Gulf Coast and other southern regions – could be turned into 25 billion gallons of algae-based fuel a year, about 8 percent of the country’s annual consumption.

Getting to market

However, it takes an enormous amount of acreage to capture the amount of sunlight needed to grow enough algae to make a dent in the energy industry. It also takes massive water supplies — and money. Genifuel, founded in 2006, gave up on growing its own algae in favor of focusing on the process of converting the stuff to crude.

But this year, the question of whether algae-based crude will ever get to market became a question of when: San Diego-based Sapphire Energy has recently signed contracts to turn it into fuel through giant U.S. refiners Tesoro Corp. and Phillips 66. The crude could be ready to hit the market by 2018, and Sapphire wants to make 1 billion barrels of algae-based crude per year by 2025 . The company is in the midst of expanding its algae farm land from 100 to 300 acres.

Oyler likens algae’s growing pains to the challenges that originally hampered the growth of corn-based ethanol blended in fuels today.

“They went from nothing to 15 billion gallons of fuel per year,” Oyler said. Though those numbers may be far-fetched for algae with current resources, he said, “It shows we can make an agricultural process better.”