Fuels of Tomorrow — Part 2, Biofuels

Stephen DeAngelis

October 13, 2009

Yesterday I discussed the future of hydrogen as a fuel. Today I would like to examine the future of biofuels. When oil prices were racing towards $200 a barrel, there was a lot of talk about biofuels and how they could create energy independence for countries now reliant on importing oil. A lot of agricultural land was converted from growing food crops to feedstock used in the production of biofuels. This transformation of agricultural land into energy acreage exacerbated a world food shortage that resulted in a spike in price, increasing hunger, and even food riots. Not surprisingly, biofuels lost a bit of their luster. By August of this year, the Wall Street Journal declared that the “U.S. Biofuel Boom Running on Empty.” [Ann Davis and Russell Gold, 27 August 2009] Davis and Gold wrote:

“The biofuels revolution that promised to reduce America’s dependence on foreign oil is fizzling out. Two-thirds of U.S. biodiesel production capacity now sits unused, reports the National Biodiesel Board. Biodiesel, a crucial part of government efforts to develop alternative fuels for trucks and factories, has been hit hard by the recession and falling oil prices. The global credit crisis, a glut of capacity, lower oil prices and delayed government rules changes on fuel mixes are threatening the viability of two of the three main biofuel sectors — biodiesel and next-generation fuels derived from feed stocks other than food. Ethanol, the largest biofuel sector, is also in financial trouble, although longstanding government support will likely protect it.”

With discoveries of oil reserves being made at a quickened pace and the recession still holding back the global economy, oil prices have fallen along with the interest in biofuels. Even biofuels produced from non-food stock are being hit.

“Producers of next-generation biofuels — those using nonfood renewable materials such as grasses, cornstalks and sugarcane stalks — are finding it tough to attract investment and ramp up production to an industrial scale. The sector suffered a major setback this summer after a federal jury ruled that Cello Energy of Alabama, a plant-fiber-based biofuel producer, had defrauded investors. Backed by venture capitalist Vinod Khosla, Cello was expected to supply 70% of the 100.7 million gallons of cellulosic biofuels that the Environmental Protection Agency planned to blend into the U.S. fuel supply next year. … Domestically produced biofuels were supposed to be an answer to reducing America’s reliance on foreign oil. In 2007, Congress set targets for the U.S. to blend 36 billion gallons of biofuels a year into the U.S. fuel supply in 2022, from 11.1 billion gallons in 2009. That would increase biofuels’ share of the liquid-fuel mix to roughly 16% from 5%, based on U.S. Energy Information Administration fuel-demand projections.”

All this bad news makes one wonder whether biofuels as a major fuel source has been permanently crippled.

“Critics of the biofuels boom say government support helped create the mess in the first place. In 2007, biofuels including ethanol received $3.25 billion in subsidies and support — more than nuclear, solar or any other energy source, according to the Energy Information Administration. With new stimulus funding, this figure is expected to jump. New Energy Finance Ltd., an alternative-energy research firm, estimates that blending mandates alone would provide over $33 billion in tax credits to the biofuels industry from 2009 through 2013. Not all biofuels may be worth the investment because they divert land from food crops, are expensive to produce and may be eclipsed by the electric car. One fact cited against biofuels: If the entire U.S. supply of vegetable oils and animal fats were diverted to make biodiesel, production still would amount to at most 7% of U.S. diesel demand. Producers and investors now are pushing for swift and aggressive government help. Biodiesel makers are lobbying to kick-start the delayed blending mandates immediately and extend biodiesel tax credits, which expire in December.”

One feed stock that continues to draw research dollars and potential investors is algae. As I noted yesterday, algae may one day produce hydrogen that could be used to power vehicles. A more likely scenario, however, is that algae will be used to produce biofuel. I have written a couple of previous blogs on this subject (The Potential of Pond Scum and Biofuel from Algae). The Wall Street Journal reports, “There has been a resurgence of investment interest in the U.S. biofuel industry focused on technologies that use algae to make fuel.” [“Biofuels New Crops,” by Mara Lemos Stein and Sari Krieger, 13 September 2009].

“The appeal of algae is that it can potentially produce fuel without diverting food crops or large swathes of land. Ethanol derived from corn has been blamed by some for driving up food prices, while large-scale production of cellulosic ethanol would require cultivation of plants such as switchgrass that are grown only in small amounts now. When exposed to light and carbon-dioxide, pools of algae produce lipids that can be refined into oil. The algae consumes the carbon-dioxide during the process, scoring a double hit for protecting the environment.”

If a cap-and-trade system develops in the U.S. for carbon emissions, companies using algae-based biofuels could reap significant financial benefits. One company that believes this is likely to happen is the trucking firm of J.B. Hunt which as inked an agreement with SunEco Energy, a producer of algae-based biofuel [“SunEco Energy and J.B. Hunt Algae Power Hits the Road …,” PR Newswire, 29 July 2009]. According to the press release:

“The two companies conducted a series of successful tests using biodiesel made by SunEco Energy from 100 percent natural algae oil produced at the company’s pilot plant in Chino, California. These tests, using a 20 percent and 50 percent blend of algae oil with petroleum diesel, measured an 82 percent reduction in particulate emissions with no loss of power. ‘Transportation fuel is virtually 100% oil-based,’ said Gary Whicker, senior vice president of engineering for J.B. Hunt. ‘Finding alternative energy sources to put in our fuel tanks is good business for our company and our nation. SunEco’s innovative process to produce renewable fuel supplies from algae grown in American ponds is an intriguing new option. Our initial experience with their algae-based biodiesel is promising, and we are excited about the opportunity to work with SunEco Energy to move towards a lower cost, less carbon intensive, and more secure energy supply for our business.'”

For most algae-based biofuels, cost remains a serious challenge. SunEco Energy believes it products can be competitive with petroleum at crude oil prices of $30.00/barrel or greater. SunEco also produces a livestock feed supplement as a byproduct of their process. The company’s web site says this about its byproduct:

“The fatty biomass remaining after release of biocrude from algae harvest is collected, moisture reduced to 20%, pasteurized and used as live stock feed supplement, currently for standing beef cattle. This is a completely natural product containing no animal byproducts. Animal feeding studies are ongoing but to date this product can replace yellow grease and also serve as a high quality feed supplement. While the product will initially be used for beef cattle, it is also planned to be tested in dairy cattle, swine, poultry, and pet foods. In addition, it will be investigated as a precursor to plastics, as a source of green gasoline and numerous other products in the chemical and pharmaceutical industries.”

Although SunEco claims to have overcome many of the challenges associated with algae-based fuels, there are a number of analysts who view the future of algae-based biofuels with skepticism [“Interest in algae’s oil prospects is growing,” by Tiffany Hsu, Los Angeles Times, 17 September 2009]. Hsu reports:

“All of this activity has drawn its share of doubters. Skeptics say that it’s a beachcomber’s fantasy, that it’s too costly to cultivate any significant amount of algae, that fuel inside — whether in the form of oil, ethanol, gas or hydrogen — is too expensive to extract or produce on a large scale.”

Proponents, however, believe that they can bring the costs down without too much difficulty [“Algae as Fuel of the Future Faces Great Expectations — and Obstacles,” by Anne C. Mulkern, New York Times, 17 September 2009].

“‘Algae biofuel is the most promising liquid replacement fuel on the horizon,’ said Kenneth Green, resident scholar with the conservative American Enterprise Institute. ‘The chemistry will be cracked, and the ability to grow liquid fuel all over the country will be a game-changing event.’ It could be years, however, before it is clear whether algae can meet expectations. The ability to get research out of the lab and into the marketplace is about a decade away, Green and other analysts said. Before that can happen, entrepreneurs must find a way to bring down the cost of turning algae into fuel. Researchers and entrepreneurs are working to speed that process. The challenge is finding, nurturing and even creating algae strains that can be grown and harvested cheaply at a worldwide scale, said Stephen Mayfield, one of Sapphire Energy’s founders and head of the Mayfield Lab at the Scripps Research Institute in San Diego. … ‘It’s like we’re at the stage of the first automobile,’ Mayfield said. But he is confident advancements will come quickly. With algae fuel estimated to cost about $10 a gallon right now, Mayfield said, he only needs to make algae three times more efficient to compete economically with gasoline. ‘That’s pretty easy to do,’ Mayfield said. … Algae research ultimately needs billions of dollars to build demonstration projects testing algae fuel’s commercially viability, Zenk said. And that money might not come without a political landscape that supports making fuel from algae.”

One of the reasons that so much money is needed for algae research is that many researchers believe creating “designer algae” is the best way to increase the efficiency of algae. SunEco Energy, however, disagrees. The company claims to have overcome the need for “designer algae” by utilizing naturally occurring colonies of algae which demonstrate symbiotic behavior and can be manipulated in environmentally friendly ways to produce large yields of oil. Algae is a promising source of biofuel because it is a naturally occurring organism. As Tiffany Hsu reports in the Los Angeles Times‘ article mentioned above:

“Until recently, ‘algae has been this complete backwater of scientific research,’ said the center’s founding director, Steve A. Kay, who is also dean of biological sciences at UC San Diego. ‘But we’ve all woken up with the realization that we are junking the planet.’ Known as ‘nature’s solar panels,’ the ‘amazingly clever little chemical factories’ soak up carbon dioxide and sunlight, which is converted into oil through photosynthesis, Kay said. Algae, he said, can be harvested more often and at greater yields than many other potential biofuel crops such as soybeans or grasses.”

Algae’s amazing rate of growth, while a positive factor when used to produce biofuel, can have devastating consequences in nature. Fed by fertilizers washed off farms and sent down rivers into the ocean, algae can create enormous dead zones near coastlines. There is one start-up company, however, who wants to make use of these algae blooms [“Biofuel Bet Aims to Harvest Fish That Feed on Algae,” by Russell Gold, Wall Street Journal, 18 August 2009].

“Scientists have been studying dead zones for decades. The Louisiana seafood industry worries that dead zones threaten the ecosystems that support the state’s $1 billion shrimp industry as well as other fisheries. Environmental groups are concerned that the runoff from agricultural fertilizer is pushing a natural ecosystem toward collapse. Turning algae into a bio-based oil to run in conventional refineries alongside crude has been a long-held dream of biofuels entrepreneurs. Exxon Mobil Corp. last month announced a partnership with Synthetic Genomics Inc., a biotech firm owned by genomics scientist J. Craig Venter, to spend as much as $600 million working on developing algae biofuels. Greener Dawn Research estimates that privately held start-ups Sapphire Energy and Solazyme Inc. have raised more than $75 million for their own algae-to-fuel effort. Thus far, both of those projects plan to raise their algae stocks in controlled facilities onshore. LiveFuels Inc., a Silicon Valley start-up, has a different idea. Rather than growing algae in onshore facilities, where the cost of circulating the water can be high, LiveFuels wants to use the algae in the dead zones. But instead of harvesting it directly, it wants to go a step up the food chain, using algae to feed fish that could be processed for oil.”

LiveFuels twist on biofuels is unique among those seeking to use algae as a feed stock. The company claims that its process is the only economically-sound way to harvest algae.

“‘It is too expensive for humans to grow algae, harvest it and get the water out and then convert it into a petroleum-like substitute,’ said LiveFuels Chief Executive Lissa Morgenthaler-Jones. It is easier and cheaper to harvest algae’s oil the way Mother Nature does it — ‘which is to use fish,’ she said. The fish would gobble up the algae and then be harvested, cooked and pressed to extract fish oil — a method already used to produce omega-3 fatty acid dietary supplements. LiveFuels, San Carlos, Calif., is testing out carp, tilapia and members of the sardine family at a fish farm in Rio Hondo, Texas, near the Mexican border. Once it figures out a good fish mix, LiveFuels wants to release them in Louisiana bays — more than 25,000 pounds of fish per acre — to feast on the algae blooms. ‘This is the sea equivalent of traveling goats: you have algae, we’ll bring the fish,’ she says, referring to companies that rent out goats to eat up grasses on California hillsides to reduce the danger from wildfires. They would truck in the fish and release them into a cordoned-off area. Cages would be used to keep carnivorous fish out. The company envisions building caged fish farms in parts of the algae blooms in Louisiana bayous and offshore in the Gulf. The algae would provide a free source of food to raise the fish, and natural tidal flows would churn the algae to keep fresh nutrient-rich water flowing through.”

Like every other idea proposed for producing biofuels, LiveFuels’ offering has its detractors.

“The idea isn’t meeting universal praise. ‘Our preference is not to wait until the Gulf of Mexico is a giant dead zone and then have someone go out and collect the algae,’ says Ed Hopkins, director of the Sierra Club’s environmental-quality program. He favors reducing fertilizer runoff upstream to cut off the nutrients that feed the algae blooms. LiveFuels also faces a more practical concern. Algae blooms are seasonal and move around from year to year, so Livefuels might have to design mobile fish farms to capture the moveable feasts. The National Oceanic and Atmospheric Administration recently said the dead zone this summer was the fourth smallest in the 25 years they have been measured, though it was still about 3,000 square miles, larger than Delaware. Nancy Rabalais, executive director of the Louisiana Universities Marine Consortium, is doubtful of the plan. ‘There are several groups looking at phytoplankton as a biomass. But my sense is there is not enough on a continual basis to make it economically feasible,’ she said. David T. Kingsbury, chairman of LiveFuels’ scientific advisory board and a former assistant director of the National Science Foundation, said he was skeptical at first, too, ‘but I’ve come around. It hasn’t really been fully tested yet, but it seems like a reasonable idea,’ he said.”

According to one report, there are “more than 200 … companies … trying to find a cost-effective, scalable way to achieve the same end — turning algae into vegetable oil fuel” [“A New Test for Business and Biofuel,” by Kirk Johnson, New York Times, 16 August 2009]. Johnson’s article focuses on a company in Colorado that features “equal parts science, environmental optimism and Native American capitalist ambition.” He writes:

“With the twin goals of making fuel from algae and reducing emissions of heat-trapping gases, a start-up company co-founded by a Colorado State University professor recently introduced a strain of algae that loves carbon dioxide into a water tank next to a natural gas processing plant. The water is already green-tinged with life. The Southern Utes, one of the nation’s wealthiest American Indian communities thanks to its energy and real-estate investments, is a major investor in the professor’s company. … The Colorado State professor, Bryan Willson, who teaches mechanical engineering and is a co-founder of the three-year-old company Solix Biofuels, said working with the Southern Utes on their land afforded his company advantages that would have been impossible in mainstream corporate America. The tribe contributed almost one-third of the $20 million in capital raised by Solix, free use of land and more than $1 million in equipment. … [Al Darzins, a group manager at the National Renewable Energy Laboratory’s] National Bioenergy Center said Solix’s model was different from most: the algae is grown in closed bags, lined up vertically in the water tanks, with the intent of increasing yield. But for every hopeful, he said, the crux will be controlling costs. … Solix’s facility project is next to the natural gas processing plant for access to the carbon dioxide waste stream, which will be used to nourish the algae — a kind of biological recycling of carbon dioxide before its discharge into the atmosphere as the vegetable fuel is burned. The plant also produces waste heat, which could be used to warm the algae beds in winter. In addition, the high desert plateau of southwest Colorado is one of the sunniest spots in the nation, providing solar radiation that accelerates algae growth. Central to Solix’s business model, Dr. Willson said, is the hope that power plants and other factories now venting carbon dioxide will allow the company to build an algae farm next to their carbon dioxide vent pipes. A plant could sell the oil or biodiesel, and Solix would earn its return by being a part owner-operator, or by licensing the technology. If Solix can expand its operations to a commercial scale, the Southern Utes will have certain first ownership and operating rights in Solix plants throughout much of the Western United States.”

Although algae remains the most promising feed stock for biofuel processes, there are two other stories about biofuel I would like to mention. The first is about watermelons [“Watermelon Juice May Be Next ‘Green’ Fuel,” by John Roach, National Geographic News, 28 August 2009]. Roach writes:

“According to a new U.S. government study, juice from unwanted watermelons could be a promising new source for making the biofuel ethanol. Up to a fifth of all watermelons grown each year have odd shapes or scarred rinds that turn off consumers, said study co-author Wayne Fish, a chemist with the Agricultural Research Service in Lane, Oklahoma. Instead of picking the fruit, farmers leave these reject melons on the vine. ‘If you figure a field of watermelon may yield somewhere between 60 and 100 tons per acre of watermelon, a fifth of that can be substantial,’ Fish said. When he and colleagues were experimenting with extracting antioxidant compounds from watermelon juice, they realized the waste stream of sugary fluids could be a source of ethanol.”

Fish doesn’t seriously believe that deformed watermelons will someday be the primary source of fuel for vehicles, but he does believe that larger farms could produce enough fuel to reduce their operating costs and maybe even make a little profit from otherwise non-producing portions of their crops.

“‘For average-size growers that have 300 to 1,000 acres [121 to 405 hectares], they may just keep the ethanol themselves and use it in their own production,’ Fish said. Larger farms could even produce enough fuel to sell. However, it doesn’t make economic sense to haul the unwanted watermelons to a processing facility. Rather, Fish envisions mobile breweries that go from farm to farm. ‘In terms of the actual process that goes on, it is no different than making homebrew,’ he said, except on a larger scale and with a few special laboratory tweaks.”

If you’re really interested in this subject, the National Geographic has an interactive site that compares biofuels that is worth checking out. The final article I want to discuss focuses on a potentially more useful breakthrough [“Sugar + weed killer = potential clean energy source,” Brigham Young University press release, 29 September 2009]. According to the press release:

“A spoonful of herbicide helps the sugar break down in a most delightful way. Researchers at Brigham Young University have developed a fuel cell – basically a battery with a gas tank – that harvests electricity from glucose and other sugars known as carbohydrates. … ‘Carbohydrates are very energy rich,’ said BYU chemistry professor Gerald Watt. ‘What we needed was a catalyst that would extract the electrons from glucose and transfer them to an electrode.’ The surprising solution turned out to be a common weed killer, as reported by Watt and his colleagues in the October issue of the Journal of The Electrochemical Society. … The effectiveness of this cheap and abundant herbicide is a boon to carbohydrate-based fuel cells. By contrast, hydrogen-based fuel cells like those developed by General Motors require costly platinum as a catalyst. The next step for the BYU team is to ramp up the power through design improvements. The study reported experiments that yielded a 29 percent conversion rate, or the transfer of 7 of the 24 available electrons per glucose molecule. … Since they wrote the paper, the researchers’ prototype has achieved a doubling of power performance. And they’re pursuing an even stronger sugar high.”

As I noted at the conclusion of yesterday’s post, “I suspect that no one fuel will define the future; rather a combination of hybrid systems, hydrogen fuel cells, biofuels, and electrical power will combine to give us a more environmentally friendly transportation system.” The innovations being developed by researchers will continue to emerge and, I suspect, new industries will result — a win-win for both the economy and the environment.