Algae Biodiesel: It's $33 a Gallon

Drying, breeding and growing algae – particularly in large quantities – isn't there yet, which means your fishtank is not a gold mine.

You can grow algae with carbon dioxide and sunlight, but that doesn't mean it's free.

Although many believe that algae will become one of the chief feedstocks for diesel and even hydrocarbon-like fuels, growing large amounts of algae and then converting the single-celled creatures remains expensive, said experts at the National Biodiesel Conference taking place in San Francisco on Tuesday.

Algae biofuel startup Solix, for instance, can produce biofuel from algae right now, but it costs about $32.81 a gallon, said Bryan Wilson, a co-founder of the company and a professor at Colorado State University. The production cost is high because of the energy required to circulate gases and other materials inside the photo bioreactors where the algae grow. It also takes energy to dry out the biomass, and Solix uses far less water than other companies (see Cutting the Cost of Making Algae by 90%).

By exploiting waste heat at adjacent utilities (one of our favorite forms of energy around here), the price can probably be brought down to $5.50 a gallon (see Will Waste Heat Be Bigger Than Solar?). By selling the proteins and other byproducts from the algae for pet food, the price can be brought to $3.50 a gallon in the near term.

But that's still the equivalent of $150 a barrel of oil. "We we're excited in July [when oil was approaching that level]," he joked. "But we knew it wasn't sustainable."

It's only in phase II of Solix's business plan that it will be able to drop production costs to $3.30 to $1.57 a gallon, or around $60 to $80 a barrel. Solix has set a goal of cutting the cost of making algae by 90 percent.

Is algae a good feedstock? Yes, he insisted. Ultimately, algae could yield 5,000 to 10,000 gallons an acre, far higher than other feedstocks. Soy is only good for around 40 to 50 gallons an acre. Touted plants like jatropha might only produce 175 gallons an acre, he said.

But algae comes with trade-offs. Wild algae grows fast, but it doesn't yield tremendous amounts of oil naturally – two thirds or more of the body weight of wild algae will be proteins and carbohydrates instead of oil. Genetically modified algae can boost the oil content, but that slows the growth process. Closed bioreactors – i.e., sealed plastic bags placed in the sun -- cost more than open ponds, but it's tough to keep invasive species from taking over open ponds and out-competing algae optimized to produce oil.

"There's a dance between the growth rate and lipid content," Wilson said.

Much of the cost reduction for Solix will be accomplished through extraction techniques the company hasn't discussed yet. And algae companies will have to harvest everything their microorganisms produce.

"We don't have the solutions that are publicly discussed that give us the costs that we need," he said, adding, "The value of the co-products have to be captured and the value of the co-products could exceed the value of the oil."

Some companies, like Solazyme, are exploiting genetic science and fermenting techniques to accomplish the task. In fermentation, specific species of algae are locked into brewing kettles with sugars derived from old plant matter. When the time is right, Solazyme takes out the microbes and squeezes out the oil. It's cheaper to get large volumes of feedstock oil through fermentation than growing algae in ponds or bioreactors, said CEO Jonathan Wolfson. Genetically modifying the algae can boost the lipid, or oil, content to 70 percent of the organism's weight. In a sense, Solazyme practices indirect photosynthesis: the algae doesn't grow by having sunlight shone upon it but by eating sugars that were grown in the sun.

"Algae is by far the best organism on the planet for converting fixed carbon into oil," he said. "But economically, others are more efficient at taking sunlight and carbon dioxide and turning it into oil."

Solazyme says it will be capable of producing competitively priced fuel from algae in 24 to 36 months. Solazyme actually uses photosynthesis for growing some algae, but only higher value oils for the cosmetic or other industries.

Another, Phycal, is trying to harvest oil from algae without killing the algae. Instead, Phycal bathes the algae in solvents which can suck out the oil. Some strains of algae can go through the process four times or more.

"Think of it as milking algae rather than sending it to the slaughterhouse," said senior scientist Brad Postier. "By not killing the cells, we don't have to grow the biomass again."

18 Comments

  • Durwood M. Dugger 02/4/09 6:47 AM

    This is one of the first articles that I have seen that actually discusses just how far algae oil is from economic feasibility. It is also the first where most those interviewed at least hint that no matter what their production technology is - they still have not overcome the processing cost barriers. No matter how you slice it (no pun intended) extracting and producing storable and salable fuels from algae is an energy intensive process - and such a very costly one. Thus, economic feasibility will probably never be reached until petroleum availability costs rise dramatically - but not like our recent market manipulation risen rises. Algae oil companies aren’t being limited by technology, they are being limited by economics and a general failure to address the economic sensitivities first.

    Reply
  • b cole 02/6/09 4:56 AM

    You apparently don’t understand the algae industry.  Most algae production equipment is off-the-shelf existing technology.  The industry is close to a $1.10 per gallon not $3.00. Fify percent of biodiesel plants are shut down today due to high costs of feedstock and availability.  The NBB is having problems because they are the front for the soybean farmers association. 

    Any biodiesel plant still standing or bought out of bankruptcy can only be proftable using algae and jatropha. There are companies right now generating algae oil and biomass using all off-the-shelf technology.  We know you were at the NBB conference that plays down algae but we encourage you to do your homework.  If you would like to see an algae production calculator, please give us your email address.  You may understand the numbers behind the algae industry.

    Reply
  • Edwin Roceles 02/16/09 2:06 AM

    Our company is currently studying and looking into the production of algae into biofuel.  I am interested to see an algae production calculator.  I would also like to get leads into sources of off the shelve algae production technologies.  It would be appreciated if you can likewise give me an idea of the set-up cost for an algae for biofuel production facility.  I have done some research on algae biofuel and I have tried to email some companies that have technologies but I have not gotten a lot of replies.  Your leads will certainly help and would be appreciated. 

    Reply
  • b cole 02/16/09 4:00 AM

    If you can give me your email address and I will send you one.

    Reply
  • Edwin Roceles 02/16/09 6:42 PM

    That would be great.  Kindly email me at:  (JavaScript must be enabled to view this email address)  thanks!

    Reply
  • Edwin Roceles 02/16/09 7:03 PM

    I wrote down my email but it didn’t appear.  Please send me the link or name of company i will look it up on the web.  Thanks!

    Reply
  • b cole 02/17/09 5:07 AM

    Since when is Michael Kanellos an authority on the costs of growing algae?  Interesting that he spoke at the NBB Conference (a soy based feedstock organization)and is unrealistically trashing the cost of algae.  Wonder why he isn’t trashing the NBB who are the front for the soy bean farmers association. The same soybean farmers that killed the biodiesel industry.  The farmers made money but biodiesel plants are still shutting down across the US due to past high feedstock prices, lack of feedstock and no customers in the US.  It was a flawed government subsidized plan. Please tell us who were the algae experts that spoke at the NBB Conference? Heard that one of their lobbyists was their resident algae spokesman. 

    Reply
  • Françoise Lacotte 02/17/09 11:54 PM

    Interesting article, especially the part about Phycal: I did some research on the internet but could not find any information connected to this… company? university program?
    Could Mr. Kanellos please indicate me his source?
    Thank you in advance.

    Reply
  • Jay Johnson 02/26/09 8:41 AM

    Please post a link to the ‘Algae Production Calculator’.
    This site will apparently not display email addresses, but this might work: Algae At SynerSoft dot com

    Reply
  • John Milledge 04/7/09 3:55 AM

    I would be very interested in algae production calculator and the assumptions on which it is based. Algae grow in very dilute suspension and the mixing, gaseous exchange and harvesting costs and energy are high.
    Could you,please, post a working link.

    Reply
  • Spike 05/29/09 11:56 AM

    If algae is so viable, b cole, why would you be wasting your time debating it here, rather than feverishly making and selling it?  The oil industry didn’t kill the electric car.  The electric car killed itself.  What are you trying to sell to people?  Your “calculator?”

    Viable technologies work.

    Reply
  • Ed 10/10/09 1:06 AM

    Yes it did. Oil Industry and politicians who were influenced by the Oil industry killed the electric car. You might want to do more research on that. Money talks.

    Reply
  • Eddy Boekoesoe 11/11/09 3:47 AM

    Sendme information by e mail or written. My adress: Eddy Boekoesoe, Jalan Salak L19, Cawang II, Jakarta 13630, Indonesia, tks.

    Reply
  • Bob Mroz 01/13/10 1:00 AM

    Can you put me in touch with an expert in growing algae on a large scale?

    Reply
  • Jim Mulry 01/19/10 5:26 PM

    Millipore is the market innovator for cell biology and lab water purification.  Last year, Millipore purchased Guava Technologies, the flow cytometry and cell counting company.  Millipore markets the Guava instruments with applications for algal research and quality control.  More than 20 customers use Millipore instrumentation for algal research.  For more information, please contact me.

    Reply
  • William Reyes 01/26/10 3:39 PM

    I am a financial advisor looking for opportunities for clients in companies that are promoting ecologically sustainable technologies and reducing their imact on the environment.  I’d like to research companies on the forefront of this technology.  I’m open to hearing from the other side of this debate.  What company is close to 1.10 a gallon for algae biodiesel?

    Reply
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