Picking up Pennies in Parking Lots: the algae biofuels angle

April 24, 2012 |

En route to zillions in algae? First, you have to get the water out of the algae or the algae out of the water.

Making Algenol’s ethanol-secreting microalgae a technology worth a special accommodation. Which Florida finally granted.

Last year, the US Government minted 8.2 billion coins, of which 4.9 billion were pennies. The vast majority of the pennies will fall between the couches, fill coin jars, or sit unloved in parking lots. It is estimated that as many as 150 billion pennies are floating around in circulation, with the vast majority lying around in various states of disuse.

A billion dollars, lying around? Why’s that? Well, that’s the “making money from algae” problem, in a nutshell. If the average US worker makes $17 per hour, and it takes a minute to find and pick up a penny in a parking lot, you lose money hunting down and aggregating pennies. Nothing wrong with pennies, but when the concentration rate is too low, it’s unviable.

After all, there’s gold dissolved in seawater, too – $10 trillion of it, by one estimate. It’s just unaffordable to extract.

Plus, in the case of algae, and to stretch the analogy, there are a lot of penny-munching critters out there in micro algae ponds. Just when you get to the penny, you find some other critter has swiped it.

Getting algae out of the water

When it comes to micro algae, which generally maxes out between concentrations of up to, say, 0.1-1 percent, and even after you have grown them, you either have to get the algae out of the water or the water out of the algae. Moving 1 ton of water to get to somewhere between 2 and 20 pounds of algae, containing less than a gallon of lipids – well, the economics could get upside down right quick.

Not to mention the nutrient costs, the construction costs, the extraction costs, and yada yada yada.

Which is one of the reasons that, among algal biofuels technologies, the solution offered up by Algenol was so compelling.

A remarkable path

The Florida-based company has a modified microalgae that, when placed inside low-cost plastic tubing filled with seawater, and overfed a diet of CO2, produced and secreted ethanol.  Not entirely different to sweating, and in the evenings when the sunlight faded, an ethanol-rich condensate would form and be collected for further concentration into ethanol fuel. 2 tons of industrial emission CO2 per day would produce 100,000 gallons of fuel ethanol per year.

Now, how much industrial CO2 is available from the average US power plant? Roughly 1.3 million tons – or enough CO2 to support a 180 million gallon ethanol project.

Very compelling as a path to ultra low-cost biofuels, and one of the reasons why Algenol projected it could produce algal biofuels for an operating cost of less than $1.00 per gallon, and a capital cost estimated by the company at $4- $6 per gallon, or another 33 to 50 cents per gallon for capex (amortized over 15 years). That offers a tidy profit potential, with RBOB gasoline trading at $3.18 per gallon, meaning that ethanol would be cost competitive (using the Brazilian 70% rule of thumb) on a cost-per-mile basis at $2.22 per gallon.

Not to mention the energy security and emissions benefits.

Can Algenol’s system work at scale?

Does the technology work at scale? That’s what the DOE would like to find out, and a 30-acre project is in development in Lee County, Florida to make the case that it can.

Thus, very strange when the state of Florida passed a Renewable Energy Act last month requiring “double jeopardy,” which is to say, appointing two different, unsynchronized state departments over the one permitting process for any algal farm over two acres, requiring Algenol to get a specific permit for growing algae from the state’s Department of Agriculture’s Division of Plant Industry. Since Algenol was the only company developing a facility of more than two acres, they can be forgiven for thinking that the provision was aimed at them.

Construction halted, there was talk of heading back to Maryland or another state which did not have such an odious regulatory regime. After all, Algenol’s technology had been reviewed and approved seven times by its primary Florida regulator – why was a new regulator necessary, and why was an anti-regulatory Republican administration and legislature forcing the provisions through?

Cooler heads prevail

Fortunately, cooler heads have prevailed. After consultations with authorities, it was agreed that Algenol’s new integrated algal biofuels site wouldn’t be required to seek the permit and would instead only be required to use best management practices to contain the algae in case of a leak.

Now, Algenol has restarted construction at its first commercial-scale facility in Fort Meyers that will have 3,000 photobioreactors installed in the completed project. It’s a good ending for the Sunshine State, which has a ton of promise in bio-based energy because of the state’s ample supply of heat and sunshine. Now, they have some perspective to go with all that biomass. Good news for Florida and Algenol – good news for the consumer, bringing the prospect of ultra-low cost microalgae making the projects of algal biofuels at scale ever closer.


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