Algae in your tank

Mar 12, 2010

Kettering graduate Jeff Bargiel is pushing "pond scum" as the biofuel technology answer to U.S. energy needs.

Pond scum’s image is about to undergo an amazing make-over. That bane of those who have decorative ponds in their backyards may be just the biofuel resource the energy-hungry U.S. is looking for.

Kettering University alumnus Jeff Bargiel ’06 is working for a company that is leading the charge to make algae (a.k.a. pond scum) the next hottest thing in alternative fuels – yes, algae, or more specifically, microalgae, a unicellular form of algae that produces one to two orders-of-magnitude more oil than any other biofuel crop on a per acre basis, according to the Department of Energy (DOE), and thus has the potential to be the most viable and economic source of liquid biofuel. 

Furthermore, algae recycle the greenhouse gas carbon dioxide into useful fuel; the oil can be converted into drop-in renewable jet fuel, renewable diesel, biodiesel, fuel oil blends, and other products; use non-arable land and reclaimed water so as not to compete with food; can be harvested year-round reducing risk from a failed harvest while stabilizing fuel prices; and can be grown domestically in the U.S.  Altogether, algae hold tremendous potential to address problems with both energy and environmental security.

Bargiel is the Business Development Specialist for Phycal LLC near Cleveland, Ohio, a company that grows and harvests energy products from microalgae. The Applied Physics major describes his role at the company as “performing commercial feasibility analysis of new technologies, marketing, grant writing and assisting with investor fundraising.” He has helped raise over $8 million in private investment, grants and contracts.

He considered himself lucky to be only the third employee hired at Phycal. “For me it was better than hitting the lottery,” he said. I was here at the beginning and working with some very smart people,” adding “you have to have a high level of risk tolerance to work for a startup.”  The company now has 35 full-time employees and is growing.

Algal oil is traditionally produced by first growing the algae in open ponds or closed reactors, starving them, dewatering and drying to powder, and finally extracting the oil with aggressive solvents, according to Bargiel.  This kills the algae, is very expensive and energy intensive and is not scalable. “Imagine taking something that is 99.9 percent water and drying it to powder.  It just doesn’t make any sense.”  Phycal (from the Greek “phykos” meaning algae, and from the Latin “calor” meaning energy, hence, Phycal  = algae-energy) is different. 

“We’re talking about thousands of acres of algae ponds with water, fertilizer and sunlight to sell a commodity product.  That sounds like agriculture, and if we’re ever going to be successful we have to think like farmers, but with an algae twist,” said Bargiel.  Phycal’s current technical approach includes three advances in key areas:  extraction of oil, lipid production, and integration:

For the extraction, Phycal utilizes Olexal®, a novel living extraction process that “milks” oil from algae and recycles living algae back to the ponds to grow more oil.  Milking saves inputs, energy, and time.

“We don’t have to spend our resources growing algae ‘cows’ when what we really want is the algal oil ‘milk.’”  Also, it requires almost no dewatering; cleans many culture contaminants; and increases oil productivity.

To increase lipis production, Phycal employs Heteroboost™, an algae “feedlot” that uses algae already matured in the open ponds and increases their lipid content in a closed system by feeding them fixed carbon, such as inedible sugar and glycerol.  This dramatically increases productivity with low additive cost.

An finally, the company uses an integrated production system design to reduce capital expenditures and operating expenses and therefore minimize unit output costs.  Key innovations include pond design and operations, reductions in internal energy consumption, water management, and reductions in nutrient costs.

To develop these systems, Phycal currently operates a sub-pilot facility near Cleveland, Ohio, and an algal biotechnology lab in St. Louis, Mo.  “We’re currently scaling up processes to be moved to our pilot in Hawaii,” said Bargiel.

“The sub-pilot produces only a few gallons of oil per year, but its purpose is basic experimentation and development, not production,” he explained, adding “the pilot in Hawaii will be 30-plus acres with capacity to produce 100,000-plus gallons of algal oil per year.  Its purpose is for us to learn how to run an algae farm, validate our cost model, and attract the capital needed for a commercial farm.  It’s in permitting phase now and construction will start in late 2010.  It’s a $65 million project over four years with most funding coming from the DOE and private investors,” he said.

So is algal oil cost effective for energy?  “Not yet,” says Bargiel, “and probably not for a while.”  No company has demonstrated the cost effective production of algal oil for energy.  Although, many have cost models and are constructing pilots and demonstrations, including Phycal.

“It takes a lot of capital and development to meaningfully demonstrate new energy technologies to attract the even larger amounts of capital required to build a commercial facility.  Combine a farm with a refinery and it’s easy to reach a billion dollar price tag,” he said.

Phycal chose Hawaii primarily because of climate and economics, according to Bargiel, who stated Hawaii is probably the best place to grow algae in the U.S. because of stable and warm temperatures, sunlight, fresh water, nutrients and carbon dioxide all readily available.

Additionally, Hawaii has the highest energy costs in the US, with nearly all energy imported and about 90 percent of the electricity coming from oil power plants, making it a good test site for algae-based biofuel use.

“Hawaii allows us a higher cost target so that we can be more easily profitable.  Meanwhile, we will continuously improve our processes until they are good enough to compete on the continental US with relatively inexpensive petroleum.  Hawaii could easily use every gallon we produce there,” he added.

After the pilot program and commercial plant in Hawaii, Phycal will begin to branch out to other states. “We’ll most likely be growing commodity algal oil in warmer climates for at least the first few farms,” Bargiel explained.

“However, there are some companies working on producing algal oil in more temperate climates. These usually require having different species for different seasons and a source of waste heat from a nearby power plant or industrial facility. Algae grow everywhere, even under the Antarctic ice sheets, but that doesn’t make it economical,” he said.

There are many arguments in favor of pursuing algae as a biofuel according to Bargiel, including:

  • Size - an algae farm the size of Alabama could grow all of the petroleum the U.S. currently imports (3.6 billion barrels per year);
  • Volume - algae have a typical range of 1,000 to 4,000 gallons of oil per acre, per year;
  • Carbon footprint - algae get most of their carbon from consuming CO2 (“We’ll need concentrated CO2 from industrial sources, such as refineries or coal power plants, and so we’re recycling that CO2 and getting more turns on it before it is released to the atmosphere.  Phycal and others have completed life cycle analyses to show that algae releases 40 to 60 percent less CO2 than petroleum fuel counterparts. If someone invents a way to concentrate it directly from the atmosphere then algal oil will be carbon-neutral,” Bargiel said.);
  • Land use -  algae can be grown in ponds on non-arable land;
  • Energy - Algae are expected to be energy positive;
  • Continuous season -  algae can produce year round algae-based biofuel;
  • Infrastructure - algal oil can be converted into a drop-in replacement for diesel or jet fuel and transported in the existing infrastructure.

What makes algae oil such an efficient and green replacement for petroleum is found in its structure and hydrocarbon make-up.  “Not all algae produce oil, but of those that do, there is a balance of “fat” and “fast” growth that must obey laws of nature but they can produce it so efficiently because they don’t have stems and leaves that divert energy and resources away from producing oil,” explained Bargiel. “Slow growing algae can accumulate as much as half of their body weight in oil.  It is plant oil very similar to soybean or canola, called a triacylglyceride (TAG),” he said.

“TAG is three hydrocarbon chains attached to a single glyceride,” he continued. “Algae typically produce hydrocarbons in the 16-18 range making them perfect for diesel. Most of the petroleum reserves on Earth are actually from millions of years of buildup of dead algae. Over time, the buildup goes through many reactions to get what we know as petroleum. The great thing is that algal oil is typically much ‘cleaner’ than petroleum,” he said.

What would need to happen to make algae-based bio-fuel the fuel of choice in the U.S?

Global oil prices would have to change, it would need political support and investment by the energy industry, according to Bargiel. The U.S. government actually explored algae as a fuel source through the Aquatic Species Program from 1978 to 1996 to study microalgae as a source of domestic fuel.

The oil situation in the 1970s, including the oil embargo and Iranian Revolution, brought the need for energy security to the forefront, he explained. The conclusion of the program was that fuels from microalgae would never be productive until crude oil reached $40 per barrel. In 1996, oil was $20 per barrel and it was never thought that it would surpass $40, so the program was shutdown.  When prices started rising again, it was easy to ramp up corn and soybean production and divert more of it to fuel, whereas algae was relatively obscure, he said.

The Energy Independence and Security Act’s (EISA) Renewable Fuel Standard 2 mandates that the U.S. be producing 36 billion gallons of advanced, non-corn based, renewable fuel by 2022 where a portion is expected to come from algae.

The good news is that there has been a tremendous amount of funding pouring in for algae research in the last two years, said Bargiel.  The Wall Street Journal called the summer of 2009 “The Summer of Algae,” and the Departments of Defense, Energy, and Agriculture have together invested more than $800 million into algae fuel research.  Additionally, some big names in energy have announced algae efforts.  “ExxonMobil just committed $600 million and Dow Chemical $50 million, just to name two,” Bargiel said.

“This is serious, we’re serious, and the U.S. is getting serious,” he said. “As a commercial entity, we wouldn’t be trying to do this if we didn’t think we could do it economically.  In six to fifteen years, the U.S. could be seeing some of its petroleum consumption replaced with algal oil on a path towards domestic energy security.”

Written by Dawn Hibbard and Jeff Bargiel