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A Florida firm is a leader in making biofuel from algae

The green muck in your pool might someday be a source of fuel for your car, but not just yet. The surge of interest in biofuels has companies around the U.S. racing to be the first to produce cost-effective algae fuels on a large scale. Despite high hopes and decades of research, algae fuels remain mired in unforgiving economics. PetroAlgae, based in Melbourne, hopes its technology will provide the needed breakthrough to make algae the fuel of the future. "We're not quite finished," said Fred Tennant, vice president for business development with PetroAlgae. "If we were finished you'd see giant smiles on everyone's faces here. We get a little closer every day, but we're not quite there yet."

The company is searching for better, cheaper ways to squeeze oil out of algae while trying to squeeze the high costs out of algae farming, he explained.

"No one needs another high-priced fuel," Tennant said. "If we make biodiesel out of this and it's 21 bucks a gallon, no one is going to buy it."

PetroAlgae was created in 2006 by XL Tech Group, a 15-year-old Melbourne firm that creates companies to address specific needs in the marketplace. In this case, XL Tech saw a need for cheap oil that could be made into a biodiesel without diverting food crops. PetroAlgae, which licensed technology from Arizona State University, has grown to 91 employees with a lab and an algae farm. Tennant hopes to complete a 20-acre demonstration farm early next year.

Despite the enthusiasm and investment in algae fuels, there is still no commercial-sized plant producing algae-based biodiesel in the United States. Solazyme, a San Francisco company that is among the leaders in developing algae fuels, announced earlier this week that it has produced the world's first algae-based jet fuel. Despite its success, the company is producing just thousands of gallons, compared to the 1.6-billion gallons of jet fuel used every month in the United States.

Dr. John Benemann, a consultant who has worked with the Department of Energy and the International Energy Agency on algae research, said the technology works, but the economics do not.

The key to making it financially feasible is for algae farms to get paid two ways, Benneman said. First, farms should get paid for getting rid of unwanted products that algae will eat, like wastewater and carbon dioxide. Second, farms can then harvest and sell the oil. Within the next five years, algae farms could be getting paid for taking over wastewater treatment, Benneman said.

Tennant hopes to create a similar model. The United States could soon commit to greenhouse gas legislation that will make it expensive to pollute by carbon dioxide. Power plants will have to pay to pollute. Since algae eats carbon dioxide, Tennant hopes he can locate algae farms near power plants, and get paid to take their carbon dioxide problem off their hands.

Even with these advances, Benneman said algae oils will still only supply a fraction of the marketplace for alternative energy.

"None of these things are going to replace oil," Benemann said. "But they will add to the future mix of energy sources."

Asjylyn Loder can be reached at aloder@sptimes.com or (813) 225-3117.

The algae in the reactors are pressed and dried into a paste. The paste is refined into algae biomeal, which is used for animal feed, and algae oil, which is used as a feedstock to make biodiesel.

A Florida firm is a leader in making biofuel from algae 09/13/08 [Last modified: Monday, September 15, 2008 2:36pm]

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