Algae – The Truth Behind The Tiny Miracle Fuel

Search the Internet and troll through Twitter, and you’ll find all sorts of compelling, even, cool stories about algae and how this may be our ticket away from dependency on fossil fuels.  By any measure, there are about 200 to 250 start-ups in this fledgling industry.

Who wouldn’t want algae to succeed?  It’s tiny, and it’s everywhere, and you have to try hard NOT to grow it.  Plus if algae could succeed, we would not be wasting land that should be used for growing food, not fuel.

It’s just not that simple.

A few days ago I attended a talk given by Dr. Anthony Michaels, a former USC professor and founder of Phycosystems Algae Biofuel and Proteus Environmental Technologies.  Dr. Michaels gave an energetic talk, full of enthusiasm, and stayed around a long time Thursday evening to answer questions.  He also gave a healthy dose of reality, which I feel is much needed in this debate.

At a fundamental level, it is going to be a challenge in the United States—or any developed country—to replace an energy infrastructure already laden with complex grid systems and huge refineries.

You would think algae would be a natural:  it can grow anywhere there is a source of carbon, i.e. aquaculture facilities and sewage plants.  Per acre, you can produce more oil from algae than other crops like corn and soybeans.  But it’s not easy.  Open ponds are easily contaminated.  Using a closed loop system (where the algae is not exposed to air, analogous to a hermetically sealed refinery) is challenging because you need pure CO2.  And I’ve seen cool videos of photobioreactors, but this technology is still expensive.

But according to Dr. Michaels, even more challenging is the fact that you need vast amounts of water to produce algae.  I’ve been told that the ratio is 1000 to 1, but that figure, according to Dr. Michaels, could be even higher.  And then you’ve got the cost of water, which he said makes the price of algae production prohibitive.  You also cannot grow algae fast and then produce oil—the algae out-compete each other—and no one, so far, has found that magic bullet for making oil out of algae a cost-effective venture.

Could companies make profits out of selling goods that are the byproduct of algae fuel production?  Dr. Michaels was skeptical.  I personally have been told bio-plastics are the ticket, but Dr. Michaels suggested that only food products, such as feed for livestock, offer a possibility of success for algae fuel companies.  Most likely, we will see food companies that “accidentally” sell oil from its algae processing operations.

It seems to me that like many alternative fuel technologies, algae production can find a future in developing nations in regions like Africa, where the cost of installing a grid is far too prohibitive.  Technologies like that of algae and solar can be installed in Africa at a price that makes sense when compared to the infrastructure that fossil-based fuels require.  But for nations like the United States where scale and breadth are crucial, I just do not see algae fitting into our energy kit.

I hope I am wrong.  If anyone at an algae start-up wants to challenge me, I welcome your comments.

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