In California, a new report from the Energy Biosciences Institute (EBI) in Berkeley projects that development of cost-competitive algae biofuel production will require much more longterm research, development and demonstration.
“It is clear,” the EBI scientists conclude, “that algal oil production will be neither quick nor plentiful – 10 years is a reasonable projection for the R, D & D (research, development and demonstration) to allow a conclusion about the ability to achieve, at least for specific locations, relatively low-cost algal biomass and oil production.”
The report can be downloaded from the Digest’s Biofuels Information Zone, here.
Authors include Nigel Quinn and Tryg Lundquist of Lawrence Berkeley National Laboratory, Ian Woertz of Cal Poly, and John Benemann. Benemann recently made the Digest’s Top 100 People in Bioenergy list.
“Even with relatively favorable and forward-looking process assumptions (from cultivation to harvesting to processing), algae oil production with microalgae cultures will be expensive and, at least in the near-to-mid-term, will require additional income streams to be economically viable,” the authors noted in a release highlighting their findings.
The “10-years away” theme: a gathering of outlooks
There are a wider assortment of algal fuel commercialization timelines than crayons in a big Crayola box, but there are a couple of studies that have come out from academia of late that focus on the 10 year horizon. Phil Pienkos, Al Darzins and Eric Jarvis at NREL recently wrote in IEEE Spectrum: “our projections suggest that in the next 10 years or so algal biofuels will be able to compete economically with crude oil costing between $75 and $100 per barrel.”
That’s also the horizon we see in the work at Sapphire Energy, which is constructing a 1-million gallon demonstration scale facility by 2014, and expects to be at commercial scale production with a 100 million gallons facility by 2018 and at 10 such facilities by 2025. ExxonMobil and Synthetic Genomics, in their communications, emphasize the long-term nature of their R&D work on cyanobacteria-based fuels.
Key finding: demonstration-scale plants are “premature”
Overall, this report from EBI is the most comprehensive survey to date that we’ve seen on the economics, and technical challenges for algal fuels.
So it is worth taking a long look at the authors’ conclusion that “the building of 100-hectare demonstration plants, with investments of tens to hundreds of millions of dollars, are premature.”
There are a couple of items that must be noted in this study, for those who despair over the gloomy scenario.
First, the authors go into exhaustive and impressive detail on the current cost scenarios, limitations of current technologies, and the resource limitations in California and elsewhere in terms of appropriate sources of light, CO2 and land. That’s what makes this foundational study a complete “must-read”.
However, there isn’t any forward modeling on how fast the costs will come down. The source of the authors’ conclusion on the 10-year scenario is simply a scientific wild-ass guess, in which the authors note the 10 year timelines cited by Shell, ExxonMobil, NREL and the UK’s Carbon Trust. Essentially, they are re-tweeting undocumented timelines, rather than analyzing them.
Proteins zeroed in value
Second, the authors chose to discount the value of proteins down to zero, predicting that the market for high-value feed “would likely be saturated before significant biofuel quantities were produced, while commodity animal feed co-production would not likely have a decisive effect on biofuel production costs without other production improvements in addition.”
Hmmm, we respect the argument about saturation, but we don’t agree that an esteemed researcher’s “say-so” should be the accepted level of proof required on a critical point of inflection. We note that in other news today, reports that up to 5 million tonnes of additional fishmeal will be needed by 2020, above current global consumption. That could well support up to 700 million gallons of fuel production (assuming a 30 percent oil content) – not an insignificant amount of fuel, and that’s before considering the growth in demand for animal feed. Or serving algal feed to animals or fish to meet current demand.
Strategies not considered: Solazyme, Algenol, PetroAlgae
Among the companies that are making faster commercial strides are three companies with an alternative route to value, Solazyme, Algenol and PetroAlgae. In the case of Solazyme, they are growing heterotrophic algae (feeding sugar to algae that grow in the dark), not the phototropic algae considered in the study. In the case of Algenol, they are capturing ethanol secretion from cyanobacteria, which are grown in closed photobioreactors. In the case of PetroAlgae, they are producing a protein concentrate and fuel precursors from lemna, or duckweed.
The presence of alternative strategies is not proof that progress will come faster – in each case, the success of Algenol, Solazyme or PetroAlgae will depend on the quality of the technology, which is in part based on undisclosed intellectual property. Not to mention the availability of financing for large-scale biofuel projects in general. But it is important to note that almost all scenarios for a faster commercialization of fuels made from algae — and related platforms — involve commercialization of one or more of the competing technologies other than those considered in this study.
The futurist’s conundrum and Parkinson’s Law
One difficulty we have noted elsewhere in the discussion of the commercialization of algal fuels, and raised by the authors of this report: “Ten years is a short time for development of any novel technology, but a very long term for a venture capital fund…which perhaps explains the differences between the venture-backed firms and projects funded by larger companies and governmental organizations, which may be able to take a somewhat longer view.”
What the authors are getting at is that your view of the timeline appears to depend less on the science and more on Parkinson’s Law, as stated in a 1955 essay in The Economist:
“Work expands so as to fill the time available for its completion.”
Parkinson, in a subsequent book, humorously compared the time it took a prototypical retiree to mail a letter to the time required by a busy executive to complete the same task. He also famously tracing the massive growth in British colonial administration headcounts, well after the British had begun a program of de-colonialization.
In the case of algae, organizations that depend on R&D for their livelihood are usually found projecting a need for more R&D. Conversely, organizations that depend on investor dollars for their livelihood project a need for more investment in commercialization, and project fast(er) returns.
One note: It would be useful if the organizations that do R&D in this field would refrain from doing assessments of the need for more R&D. No matter how rigorous the work, there is an inherent conflict of interest in asking the professional researcher to model how much more professional research is needed.
The Digest’s Take
Having said that – the study itself, as an examination of the current state of play, is without parallel among the generally available studies on the economics and current science of algal fuel production. A must-read on that level.
But we’ll not consider that a 10 year horizon is a reasonable projection — just as we discount the “just around the corner” scenarios — until the parties reason and document the case.