Algae Biodiesel

Written By Nick Hodge

Posted June 10, 2009

From New Hampshire to South Carolina, local news outlets are busy covering the appearance of many different types of algae.

It’s big news in the Granite State, where "a potentially dangerous blue-green algae has been observed in Lake Monomonac in Rindge, prompting the town to post warning signs to residents."

Down South, ABC affiliate WCIV reports, "So far, the red algae is not causing a problem in Georgetown, but. . . local experts believe it’s a matter of time before the red algae hits in-shore."

Even here in Baltimore, our Inner Harbor has been inundated with what is officially being called Prorocentrum minimum— yet it caused an estimated 3,200 fish deaths and had a maximum stench.

But for all the trouble algae is currently bringing, its presence may be a saving grace in the future.

Algae Biofuels Offer "Great Promise"

According to the draft algae biofuels roadmap issued by the Department of Energy last week, "Microalgae offer ‘great promise’ to contribute a significant portion of the renewable fuels target specified in the Renewable Fuels Standard."

And that’s not even the exciting part.

The roadmap went on to say:

Algal biofuels could provide sufficient fuel feedstock to meet the transportation fuels needs of the entire United States, while being completely compatible with the existing transportation fuel infrastructure (refining, distribution, and utilization).

Of course, that’s a long way off. The technology needed to get us there is still in its "infancy."

Bear with me for one more snippet from the roadmap:

There is a general consensus that a considerable amount of research, development, and demonstration (RD&D) needs to be carried out to provide the fundamental understanding and scale-up technologies required before algal-based fuels can be produced sustainably and economically enough to be cost-competitive with petroleum-based fuels.

That’s in DoE speak. In investor’s English, they’re screaming, "Ground-floor opportunity!"

And how could it not be? If the technology is in its "infancy" and could eventually meet all our liquid fuel needs. . . there is only one direction to go, right?

Same as in the early 1970s, when the DoE launched the Aquatic Species Program to further the same cause. . .

I guess the return of cheap oil after the embargo has kept the ground floor intact for nearly 40 years now. But with peak oil knocking on the door and global governments determined to reduce CO2 output, algae is once again in the limelight.

Wait for It, Wait for It

Now, the government seems to be a bit more serious. $800 million has been given to biodiesel research by way of the stimulus, much of which will go to algae biodiesel research.


It’s hard to profit from research unless a private company makes a major breakthrough.

What’s worse, the DoE’s Algal Roadmap puts it in plain terms that:

The current state of knowledge regarding the economics of producing algal biofuels are woefully inadequate to motivate targeted investment on a focused set of specific challenges. Furthermore, because no algal biofuels production beyond the research scale has ever occurred, detailed life cycle analysis (LCA) of algal biofuels production has not been possible.

In short, the science of algae cultivation (algaculture), agronomy-for-algae, if you will, does not exist. It is thus clear that a significant basic science and applied engineering R&D effort including a rigorous techno-economic and LCA will be required to fully realize the vision and potential of algae.

Nonetheless, several companies are in hot pursuit, trying to eliminate every hurdle to commercialization they can and securing a windfall payout in the process.

Investors are doing the same. But so far, finding a winner has been as successful as the hunt for commercialization. Here’s a handful of algae hopefuls over the past two years.

Algae Biofuel Stocks

Anywhere from flat to bankrupt. And believe me, Chapter 11s have been filed in this sector.

But the research goes on. And a few companies, including private ones, seem to be making strides— at least to the extent that venture and private capital are still flowing to the sector.

Algae start-up Solazyme, for example, secured another $57 million this week. They’ve raised cash in several rounds already.

Eventually, a breakthrough will happen. It’s just too early to tell when and who will make it.

In an effort to explore the topic further, I’ve conducted an interview with the CEO of one of the top companies in the field.

I’ll be releasing it to readers of Green Chip Review in the coming week. Sign-up for that FREE newsletter here to get the new algae report along with other profitable coverage from the alternative energy market.

Call it like you see it,

Nick Hodge


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