LiveFuels: Fishing With the Joneses

I had a long conversation with Dave Jones, the COO of LiveFuels over breakfast at Buck's last week. LiveFuels recently announced a shift in its business plan – moving from algae harvester and algae fuel company to fish aquaculturist/fish oil/biofuel/co-products supplier. 

I'm working on a larger look at biofuels from algae that takes into account the many recent announcements and my interviews in the algae realm (Exxon, SGI, Algenol, BP, Martek, etc.).  But I wanted to give a quick take on LiveFuels. Mr. Kanellos reported on the LiveFuels fish story here.

It's not unusual for a startup's business plan to shift from its original idea – many successful VC-funded firms have undergone that change.

Nevertheless, I don't think the founders of LiveFuels envisioned themselves as fishmongers in their original startup plans. I imagine the dream was more about crisp clean labcoats and shiny bioreactors producing millions of gallons of algae-derived oil, selling the oil to BP, and saving the world. Anyway, back to the fish.

Given the company's transformation into fish-squeezing ichthyologists, LiveFuels now has to deal with PETA and the like. Here's a video of Lissa Morgenthaler-Jones, CEO of LiveFuels, and her lapels, trying to calm the inevitable agitated animal rights activists from getting their protest on.

LiveFuels is not the first firm to extract fish oil. Nutraceutical firms extract oils from fish (and algae) to produce DHA and EPA, nutraceuticals which sell for lots more than $4 per gallon. If these nutraceutical oils are worth so much, why would LiveFuels sell them into the vicious, commodity transportation fuel market? 

Nor is LiveFuels the first to consider bioconversion as a method of harvesting algae. Scientists and startups like A2BE have looked at Sea Monkeys and Tilapia as bioconverters. LiveFuels is considering using filter-feeders like menhaden, sardines, or anchovies as its crop.

And LiveFuels is going to have to deal with sentiments such as this (taken from our comment boards, in this case from the erudite F. David Doty):

"The idea by LiveFuels of feeding algae to fish and extracting the oil from fish to fuel vehicles is the sickest I’ve heard yet from a humanitarian perspective. I regularly ingest fish oil. I buy about the cheapest I can find, as do hundreds of millions of others. I pay about $150/gal. If LiveFuels can bring the price of fish oil down, maybe more people can have better health, but fish oil will never fuel our vehicles. The world switched from whale oil to petroleum 150 years ago, and that saved the whales. We won’t go back."

And here's a comment from CGA, "Why not feed the fish to bears and squeeze the bears? They could revive the market for bearskin coats as a byproduct... Seems like an awful lot of wasted entropy to me.

In the words of Dave Jones: "We are still a biofuels company. We just have to harvest the co-products to make it work."

LiveFuels now has engineering challenges as well as ethical and public relations issues to surmount in its new incarnation. More on the company soon.