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Relatively high oil prices, advances in technology, and the Bush administration’s increased emphasis on renewable fuels are attracting new interest in a potentially rich source of biofuels: algae. A number of startups are now demonstrating new technology and launching large research efforts aimed at replacing hundreds of millions of gallons of fossil fuels by 2010, and much more in the future.

Algae makes oil naturally. Raw algae can be processed to make biocrude, the renewable equivalent of petroleum, and refined to make gasoline, diesel, jet fuel, and chemical feedstocks for plastics and drugs. Indeed, it can be processed at existing oil refineries to make just about anything that can be made from crude oil. This is the approach being taken by startups Solix Biofuels, based in Fort Collins, CO, and LiveFuels, based in Menlo Park, CA.

Alternatively, strains of algae that produce more carbohydrates and less oil can be processed and fermented to make ethanol, with leftover proteins used for animal feed. This is one of the potential uses of algae produced by startup GreenFuel Technologies Corporation, based in Cambridge, MA.

The theoretical potential is clear. Algae can be grown in open ponds or sealed in clear tubes, and it can produce far more oil per acre than soybeans, a source of oil for biodiesel. Algae can also clean up waste by processing nitrogen from wastewater and carbon dioxide from power plants. What’s more, it can be grown on marginal lands useless for ordinary crops, and it can use water from salt aquifers that is not useful for drinking or agriculture. “Algae have the potential to produce a huge amount of oil,” says Kathe Andrews-Cramer, the technical lead researcher for biofuels and bioenergy programs at Sandia National Laboratories, in Albuquerque, NM. “We could replace certainly all of our diesel fuel with algal-derived oils, and possibly replace a lot more than that.”

To be sure, the use of algae for liquid fuels has been studied extensively in the past, including through a program at the National Renewable Energy Laboratory (NREL) that ran for nearly a decade. At the time, the results were not encouraging. The NREL program was terminated in 1996, largely because at the time crude-oil prices were far too low for algae to compete.

But Eric Jarvis, an NREL scientist, says that enough has changed that NREL researchers expect to restart the program within the next six months to a year. When the program was cancelled in 1996, oil prices were relatively low. Today’s higher oil prices will make it easier for algae to compete. Still, Jarvis cautions that “you have to be careful because there’s a lot of hype out there right now.”

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Credit: Paul Roessler DOE/NREL

Tagged: Energy, energy, biofuel, startups, ethanol

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