A few days ago we got an email from a proponent of Algae farming to produce biodiesel.  He referenced a study from 1998 sponsored by NREL entitled “Biodiesel from Algae.”  Referencing the study, the writer stated, “Spanning almost two decades of research, this article covers the prospect of large scale production of biodiesel using relatively simple techniques. Although already a decade out of date, the information contained within is extremely timely…”  He then quoted from the study directly:

Didymosphenia geminata, microscopic algae once scarce, but now in many streams and rivers of North America (Photo: US EPA)

“The ASP regularly revisited the question of available resources for producing biodiesel from microalgae. This is not a trivial effort. Such resource assessments require a combined evaluation of appropriate climate, land and resource availability. These analyses indicate that significant potential land, water and CO2 resources exist to support this technology. Algal biodiesel could easily supply several “quads” of biodiesel—substantially more than existing oilseed crops could provide. Microalgae systems use far less water than traditional oilseed crops. Land is hardly a limitation. Two hundred thousand hectares (less than 0.1% of climatically suitable land areas in the U.S.) could produce one quad of fuel. Thus, though the technology faces many R&D hurdles before it can be practicable, it is clear that resource limitations are not an argument against the technology.”

Is it this simple?  The question of algae as a source of commercially viable transportation fuel certainly becomes more compelling ten years later, with a barrel of oil costing well over $100 and another ten years of dramatic advancements in genetic engineering.  Here are just some of the companies developing techniques to extract fuel from Algae:  Aquaflow Bionomics, Aurora Biofuels, Bionavitas, Blue Marble Energy, Greenfuel Technologies, Inventure Chemical, Live Fuels, Petro Sun, Sapphire Energy, Seambiotic, Solazyme, Solena, and Solix Biofuels.

Another way to assess the promise of Algae as a biodiesel feedstock is to compare it to cellulose as an ethanol feedstock, as we did recently in our report “Algae vs. Cellulose.”  But the landscape shifts all the time as these technologies race to market.  Last week I had the opportunity to ask Dr. Charles Wyman about the feasibility of algae.  As someone who has done pioneering work towards commercializing cellulosic ethanol extraction, and the founder of Mascoma, Wyman certainly isn’t disinterested.  But the market for transportation fuels is big enough for cellulose and algae; they compete with petroleum, not with each other.  Wyman pointed out that extraction of fuel from algae depended on flat land, abundant water, sun and injections of CO2.  Absent any of these factors, and the capital cost for algae systems went way up.  Basically his point was there aren’t a lot of places where you have flat land and abundant water, which means not only the refinery would represent a major investment, as with cellulosic feedstock, but also the growing area.  Sorghum and Miscanthus, by contrast, will find vast areas of viable land where they can grow, with minimal capital investment.

NREL’s study, ten years old, still timely, indeed presents the potential of algae to join other emerging alternative fuels as candidates to replace or augment petroleum.  The fact that dozens of start-ups have sprung up to realize this potential indicates there is a genuine opportunity.  But if a capital investment to create the algae ponds or enclosed growth reactors must be incurred along with the capital investment to build the refinery itself, algae as a fuel may find itself at a disadvantage vs. cellulosic ethanol.