AFR Article Precis

Algae is the ideal carbon neutral substitute for fossil-based petroleum products and Australia is the ideal place to grow it according to senior Austrade representative Graeme Barty, as reported recently in the Australia Financial Review. According to this article, Mr Barty "sees enormous potential for Australia in the latest developments in the prospective algae biofuels revolution".

"Where else" he asks, "are conditions as favourable for large-scale algae cultivation that requires industrial-scale CO2 emitters such as power stations, gas conversion facilities or fertiliser plants alongside wide open spaces of non-arable land, a plentiful supply of nutrients, a lot of brackish water and plenty of sunlight." According to Barty the Karratha are of Western Australia comes to mind, but indications are that much of the continent, excluding southern regions would be suitable for growing algae for biofuels.

Barty is also quoted as saying that Australia is well positioned as a "production base for Asian markets", an assertion with which Sapphire Energy spokesman Tim Zenk is apparently in agreement, saying "Australia makes a lot of sense to us".

While companies like Sapphire Energy have still to prove that the potential of algae-based biofuels can be realised on industrial scales, last month brought "an extraordinary surge of interest – and investment – in the nascent algae biofuels sector. It is quickly emerging as “the the leading potential renewable energy alternative to fossil fuels," according to the article, with the Wall Street Journal dubbing this latest period "the summer of algae".

Interest has been sharply aroused by the announcement that Exxon Mobile will be investing $US600 million ($715 million) into a partnership with Synthetic Genomics of San Diego to develop algae-based biofuels. Other similar ventures which attest to the exciting promise of biofuels from algae include:

Solix Biofuels of Colorado, Chinese investors and petroleum refiner Valero Ebergy ($US16.8 million capital raising towards a demonstration plant)

Reportedly, Chevron, British Petroleum and Shell are also getting involved, with Chevron "partnering the US Government's National Renewable Energy Laboratory to transform algae into transport fuels, including jet fuel".

According to Emil Jacobs, vice president of research and development at ExxonMobile, "We pulled together a pretty high-powered team to look at alternative energy sources and we looked at all biofuels." Quite a turn-around from referring to biofuels, as CEO Rex Tillerson once did, as "moonshine".

The Obama administration is removing many of the former obstacles to getting government help for algae project start-ups, as is making algae refineries eligible for a share of the $US800 million to fund bio-fineries.

While no one process has yet emerged as the industry leader, two start-ups are showing particular promise: Algenol, whose patented method islolates GM algae in glass photobioreactors to produce a harvestable ethanol residue, and Sapphire Energy which harvests GM algae as "green crude" with a molecular structure that replaces fossil fuels such as diesel, gasoline and avgas.

In Australia, Algal Fuels Consortium and the University of Melbourne, supported by Bio Fuels both received government funding to the tune of $2.72 million and $1,24 million respectively. Algal Fuels will be developing a pilot scale biorefinery while University of Melbourne will be researching biofuel from micro algae.

Sapphire, with more than 200 patents on its technology has seed investors who include Bill Gates and the Rockerfellers. While it is essentially a research and development organisation at present, as well as developing a process capable of producing "green crude" in commercial quantities, Sapphire is also creating a New Mexico plant with an expected capacity of 100,000 million gallons P.A. by 2015.

Sapphire's Tim Zenk admits the commercial challenges are not to be underestimated because new ground is being broken, but that they have made an important step in establishing that their product works – it powered a Continental Boeing 737-800 on a test flight in January more efficiently than conventional avgas.

AS Zenk points out, algae is a "voracious consumer" of CO2 and was responsible for the original oxygenation of the Earth's atmosphere billions of years ago. Ironically, the oxygen build-up ended its reign as the planet's dominant life-form and laid down the basis for the vast source of fossil fuel from which our civilisation now urgently needs to wean itself. "If mother nature has done it before, it is reproducible," he is reported as saying.

Not only will the production of "green crude" consume about two kilograms of CO2 for every one kilogram of biofuel, the replacement of 25-30% of fuels in the US would save in the order of 5 billion tons in net CO2 emissions – the equivalent of eliminating the emissions from entire US passenger vehicle fleet for a period of four years.

With an impressively fast reproductive cycle of 72 hours, micro algae produces roughly ten times the yield per acre of its competing sources of biomass-for-fuels such as rape seed and palm oil and therefore is likely to free the production of bio fuel from the disadvantages it currently faces in using these, which include displacement of food crops from available arable land and low net CO2 emissions savings.

Once biofuels were merely the darling of the environmental movement. Now, with "peak oil" approaching (if it has not in fact already arrived) and the inevitable upward pressure on oil prices combined with the push to reduce dependence on foreign oil, the economic viability of micro algae-based biofuels is coming to the fore.

Source: "The drive for an algal boom" by Tony Walker, page 60, Australian Financial Review, 11th August 2009

Algae-based Biofuels Ready to Boom