Algae for Biofuels:
Moving from Promise to Reality, But How Fast?

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.

In the meantime, several non-fuel applications of algae could
serve to advance the nascent industry.

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, write

authors Nigel Quinn and Tryg Lundquist of

Lawrence Berkeley National Laboratory,

which is a partner in the BP-funded institute.

Their conclusions stem from a detailed

techno-economic analysis of algal biofuels

production.

The project is one of the over 70

studies on bioenergy now being pursued by

the EBI and its scientists at the University of

California at Berkeley, the University of

Illinois in Urbana-Champaign, and Berkeley

Lab.

The algae biofuels industry
is still in its early

gestation stage, the new
report notes.

Although well over 100 companies in the

U.S. and abroad are now working to produce

algal biomass and oil for transportation fuels,

most are small and none has yet operated a

pilot plant with multiple acres of algae

production systems. However, several

companies recently initiated such scale-up

projects, including several major oil

companies such as ExxonMobil (which a

year ago announced a $600 million commitment to algae biofuels
technology), Shell

(with a joint venture project, 'Cellana,' in Hawaii), and Eni (the
Italian oil company,

with a pre-pilot plant in Sicily).

The U.S. Department of Energy has funded several R&D consortia
and pilot projects, and  one 300-acre
demonstration project in New Mexico, by Sapphire Energy, Inc.

The U.S. Department of Defense is supporting several fast-track
projects. In the United Kingdom, the Carbon Trust has initiated a 10-year
effort to develop algae oil production, engaging a  dozen universities and research laboratories,
while the European Union recently funded 
three 25-acre pilot projects.

Most of these projects use the raceway, open pond-based algal
production technologies, which were analyzed in the EBI Report.

These projects hope to show that it is possible to mass culture
algae with current or near-term technology within the technical and economic
constraints required for biofuel production.

Once the technologies are developed, global resource availability
will be a major

controller of algae production, the report states.

Four key resources (suitable climate, water, flat land and carbon
dioxide) must all be available in one location for optimal algal biomass
production.

The authors state that despite the need for all four resources,
algal

oil production technology has the potential to produce several
billion gallons annually of

renewable fuel in the U.S.

However, achieving this goal, particularly at competitive

capital and operating costs, will require further research and
development.

The EBI report focuses on algal biofuels produced in conjunction
with wastewater

treatment as a promising cost-effective strategy to fast-track
development of a practical

production process.

Besides providing the needed water and nutrients, use of
wastewater

in algae production provides the potential for income from the
treatment service

provided.

The areas the study identified as essential for R&D are in
both the biology and

engineering fields. The ability to cultivate stable cultures under
outdoor conditions, while

achieving both high productivities and oil content, is still to be
developed. Despite the

well-known rapid growth rate of algae, increasing the volume of
algae oil produced per

unit of surface area per year is a crucial goal.

Oil-rich algae strains that are biologically competitive with
contaminating wild species and that consistently grow well in various climates
are needed. Other key steps to be improved are low-cost harvesting of microscopic
algae cells and the extraction of their oil content, as well as dealing with
the biomass residue remaining after oil extraction.

The report?s analysis includes five conceptual facilities for
algae pond biofuel production, four of them 250 acres in size and one of 1,000
acres. All used municipal wastewater as the source of both water and nutrients,
with some emphasizing production of oil, while others have wastewater treatment
as their main priorities.

Biofuel products included either biogas and oil or just biogas
production, with the biogas used for electricity generation.

The hypothetical location was the Imperial Valley in southern
California,

where the only major microalgae farms in the continental U.S. are
presently located. In

the scenarios, productivity peaks in the summer months but is
essentially nil in the

coldest winter months, with light and temperature being the main
limiting factors.

Engineering designs and cost analysis for the various cases were
based on projecting

current commercial microalgae production and wastewater treatment
processes at much larger scales.

They assumed higher productivities due to plausible technological

advances. The estimated capital costs for a 250-acre biofuel
production system

emphasizing oil production were about $21 million, with annual
operating costs at around $1.5 million, to produce about 12,300 barrels of oil,
giving a break-even price per barrel of oil of $330 (based on an 8 percent
capital charge). Increasing the scale of the system to 1,000 acres reduced the
break-even price to about $240 per barrel.

These prices considered wastewater treatment credits, which
reduced costs about 20 percent. Other facilities that maximized wastewater
treatment produced fuel at lower cost due to greater treatment revenue.
However, the availability of wastewater would greatly limit the national scale
of this lower-cost fuel production.

Other co-products, specifically animal feeds, could help offset
costs, but these products

are of relatively low value or have very limited markets. ?Wastewater
treatment is the

only realistic co-product for (algal) biofuels production,? the
report states. ?Only through

intensive, continuous, large-scale research with outdoor ponds can
we hope to progress in a reasonable time frame.?

?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, ?A
Realistic Technology and Engineering Assessment of Algae Biofuel

Production,?  can be read on the Energy Biosciences
Institute web site

(www.energybiosciencesinstitute.org) by accessing ?Publications?
in the Resources

drop-down menu).

Energy Biosciences
Institute News Release

For Immediate Release

Tuesday, November 2,
2010 Contacts:

Nigel Quinn Ron Kolb,
Communications Manager

NWQuinn@lbl.gov Energy Biosciences
Institute

510-486-7056
RRKolb@berkeley.edu, 510-643-6255