The US DOE's Pacific Northwest National Laboratory has an article on a new process for creating biofuel from algae - Algae to crude oil: Million-year natural process takes minutes in the lab.

Engineers have created a continuous chemical process that produces useful crude oil minutes after they pour in harvested algae — a verdant green paste with the consistency of pea soup.

The research by engineers at the Department of Energy's Pacific Northwest National Laboratory was reported recently in the journal Algal Research. A biofuels company, Utah-based Genifuel Corp., has licensed the technology and is working with an industrial partner to build a pilot plant using the technology.

In the PNNL process, a slurry of wet algae is pumped into the front end of a chemical reactor. Once the system is up and running, out comes crude oil in less than an hour, along with water and a byproduct stream of material containing phosphorus that can be recycled to grow more algae.

With additional conventional refining, the crude algae oil is converted into aviation fuel, gasoline or diesel fuel. And the waste water is processed further, yielding burnable gas and substances like potassium and nitrogen, which, along with the cleansed water, can also be recycled to grow more algae. ...

PNNL scientists and engineers simplified the production of crude oil from algae by combining several chemical steps into one continuous process. The most important cost-saving step is that the process works with wet algae. Most current processes require the algae to be dried — a process that takes a lot of energy and is expensive. The new process works with an algae slurry that contains as much as 80 to 90 percent water.

The Huffington Post has an article on the ever elusive quest to produce biofuel from algae - Algae Biofuel Project In Europe Moves Ahead With First Biomass Crop At Spain Site.

A European Union-backed project to produce biofuels from algae moved a step forward on Thursday by producing its first crop of algae biomass at its site in southern Spain, the main company behind the scheme said on Thursday. The "All-gas" project will cultivate fast-growing micro-algae by using the nutrients in wastewater and then by further processes generate biomethane which can be captured and used in transport fuel. The biomass obtained from the algae crop showed high energy potential with a methane production capacity of 200-300 litres of gas per kilogram of biomass processed, water company FCC Aqualia said. ...

However, development is still at a very early stage, there is no large-scale production in Europe and, along with the progress announced on Thursday, FCC Aquilia has also ruled out some of its earlier ideas for producing biodiesel after it proved unsustainable. Experts say costs must be cut dramatically to make production commercially viable and the U.S. National Research Council has said the technology only had the potential to generate a tiny percentage of U.S. transport needs and would need to use enormous quantities of water to do so. ...

In 2009, Exxon Mobil Corp. said it would invest $600 million to develop algae-derived biofuels within a decade. It has already invested more than $100 million but has failed to produce economically viable results after four years' work.

Steve LeVine has an article on Exxon and Craig Venter's efforts to commercialise biofuel production from algae - Trouble in the algae lab for Craig Venter and Exxon.

A much-trumpeted partnership of one of today's most celebrated scientists and the world's largest publicly traded oil company seems stalled in its aim of creating mass-market biofuel from algae, and may require a new agreement to go forward. The disappointment experienced thus far by scientist J. Craig Venter and ExxonMobil is notable not only because of their stature, but that many experts think that, at least in the medium term, algae is the sole realistically commercial source of biofuel that can significantly reduce U.S. and global oil demand.

Venter, the first mapper of the human genome and creator of the first synthetic cell, said his scientific team and ExxonMobil have failed to find naturally occurring algae strains that can be converted into a commercial-scale biofuel. ExxonMobil and Venter's San Diego-based Synthetic Genomics Inc., or SGI, continue to attempt to manipulate natural algae, but he said he already sees the answer elsewhere -- in the creation of a man-made strain. "I believe that a fully synthetic cell approach will be the best way to get to a truly disruptive change," Venter told me in an email exchange.

Venter made his remarks before a conference this week on the future of energy at the New America Foundation in Washington, D.C., and in subsequent emailed replies to questions.

A drive to reduce dependence on fossil fuels -- because of vulnerability to the volatile Middle East, concern about global warming, and the hundreds of billions of dollars spent on oil imports -- lies behind such efforts to create a scaled-up biofuel. Since up to half of algae is already oil in its natural state, many experts say it is a superior alternative to biofuels created from agricultural products such as corn, palm and switchgrass, which contain much smaller percentages of oil.

When announced in July 2009, the Venter-ExxonMobil alliance of colossals attracted wide publicity. It called for ExxonMobil to spend up to $600 million if publicly undisclosed milestones were reached in the lab. The Wall Street Journal said the partnership might signal "a coming of age" for algae biofuel. Greenbang fretted that the alliance might actually prove "unholy," but not Gigaom, which said it could be "algae's big break."

The terms of the alliance omit the fully synthetic approach that Venter is now advocating, so he is conducting "an ongoing dialog" with Exxon about a new agreement, he said. He appeared to suggest that such a new compact would require more Exxon investment.

ExxonMobil spokesman Alan Jeffers suggested that the company has a different assessment of the alliance's state of play. "The ExxonMobil-SGI algae project is ongoing and has reached no such conclusions as characterized in your note," Jeffers told me in an email. (I had asked whether it is true that the alliance had failed to find a suitable strain of natural algae, and that Venter was seeking to shift to a new stage of research.).

What we may be witnessing is simple friction between the well-known conservative ways of Exxon and the free-wheeling, iconoclastic Venter. In this case, Venter from the outset may have wanted to move directly to the test-tube and create his own algae, while Exxon -- holding the purse-strings -- advocated a less-expensive, step-by-step approach starting with existing strains. There is no sign of anything approaching a rupture. But if the alliance does eventually fail, it would be a serious blow for Venter, who has said that to succeed he needs access to the deep pockets of a Big Oil company, and to a significant but lesser degree for ExxonMobil, which has widely promoted the partnership as evidence that it is a forward-looking company

The Climate Spectator has a post on another proposed algae production plant in Australia - Team Biofuel.

Australia’s Algae.Tec says it has signed a deal to build its proposed algae harvesting and production facility at the Nowra ethanol plant of Manildra Group, the largest ethanol producer in Australia. Algae.Tec executive chairman Roger Stroud said the algae photo-reactors would be sited next to the main facility and take a carbon dioxide feed from the main ethanol fermenters.

“Algae.Tec is one of only a few advanced biofuels companies with a technology designed to grow algae on an industrial scale," says Stroud. "The photo-reactors are currently being assembled at the company’s USA headquarters, in Atlanta, Georgia." Algae.Tec says its enclosed module systems occupy less than one tenth the land footprint of pond growth options.

The Climate Spectator reports that algae biomass hopeful MBD Energy (the subject of reports in the SMH and Australian in recent years) is moving forward with its demonstration plant at the Tarong power station in Queensland - Supersize Me.

Algae oil developer MBD Energy has placed an order for a large-scale algae extraction system with the US-based OriginOil for installation at its demonstration plant at Tarong power station in Queensland. The equipment, one of the largest extraction systems to be produced to date, will allow up to 1,100 litres of algae culture to be produced per minute, according to OriginOil. “This milestone places OriginOil at the forefront, globally, of delivering high scale, energy-efficient dewatering and extraction of algae, one of the most critical issues facing algae production today,” said OriginOil CEO Riggs Eckelberry.

The 1 hectare project at Tarong will begin production later this year. MBD will use the power station's CO2-laden flue-gas to feed a Bio-CCS Algal Synthesizer. It will serve as proof of concept for a larger, second stage facility of up to 80 hectares before being progressively expanded to a much larger third stage facility. MBD Energy will use the algae biomass to produce fuel, feedstock and other products.

The Climate Spectator has an article on Qantas' interest in jet fuel derived from algae - Oil and water.

Qantas last week announced the launch of its sustainable fuel strategy, a collaboration with San Francisco-based renewable energy group, Solazyme, to explore opportunities for algae-based sustainable aviation fuel. Qantas and Solazyme will work together over the next year to pursue potential for commercial production of Solazyme’s microbial derived aviation fuel, Solajet, in Australia. This latest move is part of the airline's long-term strategy to accelerate the commercialisation of 'drop-in' alternative jet fuels to help cut greenhouse gas emissions. Qantas already has a similar arrangement with the Solena Group for waste-based sustainable fuel.

In Australia, demand for aviation fuel is currently at about six billion litres a year, and Qantas’ Peter Broschofsky, who is coordinating the biofuels initiative as well as chairing the environment committee of the International Air Transport Association (IATA), says that $180 per gallon fuel in 2008 helped move the concept of lower cost, lower emission biofuels out of the too-hard basket. He also described how Boeing galvanised the industry behind the development of the Bio-SPK jet fuel specification, which most are predicting will be approved in the first half of 2011 and possibly late in the first quarter, says BiofuelsDigest. “Watch the flood,” Broschofsky predicted, “after the fuel is certified, interest will be at a fever pitch, and we want to get in ahead.”

As for the technology, according to Solazyme, it "allows algae to produce oil and biomaterials in standard fermentation facilities quickly, efficiently and at large scale." These can then be tailored for biofuel production, as well for the replacement for fossil fuels and plant oils. According to the company's website, a study undertaken in 2009 concluded that full lifecycle greenhouse gas emissions from field-to-wheels for Solazyme's algal biofuel, Soladiesel, are 85 to 93 per cent lower than standard petroleum-based ultra-low sulfur diesel (ULSD).

Biodiesel Magazine has an article on Aurora Algae's plan to build an algae based products plant in Australia (with biodiesel seeming to be a low priority) - Aurora Algae unveils new business plan.

Aurora Algae Inc. is in the process of constructing a demonstration-scale facility in northwestern Australia, which is expected to be operational by the end of the year. Plans for an adjacent commercial-scale plant are also underway.

The company, formally known as Aurora Biofuels Inc., recently changed its name to reflect a new focus. According to Aurora CEO Greg Bafalis, the original focus of the business was on biofuels development, but with the name change Aurora has shifted its focus to algae production. “When I joined the company it was really apparent to me that the platform is algae—and what you can make from that algae,” he said. “So, we’ve transitioned into what I call higher value products, such as omega-3 EPA. Moving towards those higher-value products allows us, with our current yields and current cost structure, to actually go out and build a commercial facility in a profitable manner.”

While Aurora plans to initially focus on the production of high-value algae-based products, the company hasn’t abandoned the idea of biofuels production. “We haven’t completely dropped biodiesel production,” Bafalis said. “I would say instead of being the primary product, it’s more of a byproduct in our process.” Ramping up and optimizing a new technology is always an expensive and time consuming process, he continued. “By going towards higher-value products, it gives us the time to go out on a very large commercial scale and prove out our system, grow our algae, and find the optimizations we need to get the costs in line to produce a product like biodiesel,” Bafalis said. “We think the evolution will be there, and down the line—whether its five years or 10 years—maybe the costs will come into line, and at that point we’ll not only to serve the attractive markets that we are going after in nutriceuticals, but also evolve back into the fuel markets.”

Work on Aurora’s demonstration-scale facility is nearly complete. “Over the past 10 months, we have been developing and constructing a demonstration facility in northwestern Australia,” Bafalis said. “We currently have 38 micro-ponds, which are basically two square-meter ponds. We’ve been growing algae in those ponds for the past few months and gathering a lot of very important data. We are also in the middle of constructing six one-acre raceway ponds, which will come into operation at the end of the year.”

Tom Konrad has the latest of his "peak oil investments" series out, this time peering into the murky pond of algae-to-biofuel companies - The Best Peak Oil Investments, Part V: Algae.

If you need to own your own feedstock to be a profitable biofuel company, you can either grow it, or make use of the waste from some other economic activity. The potential of biofuel from waste is inherently limited by the waste currently produced, and the amount of available waste is likely to fall over time as the economy becomes more resource-efficient because of rising commodity prices. While I think compaines that control waste streams care good investment opportunities, waste is inherently limited when it comes to replacing oil. It's the very limitation of waste as a resource that makes it a good investment.

If you grow your feedstock on good agricultural land, you will be giving up the opportunity to produce valuable food. If you grow hardy non-food crops on marginal land, you will probably have very low yields. For instance, Jatropha has long been heralded as a non-food crop that can produce oil for biodiesel on marginal land, but the best Jatropha yeilds are produced on well-drained soil with ample fertilizer and rainfall or irrigation. Since most arable land and available water are already in use, the potential for additional biofuel production from conventional crops is limited.

Many observers herald biofuel from algae as a way to thread this needle. Algae grown in open ponds is likely to produce 5,000-10,000 gallons of oil per acre per year, while companies using bioreactors have made claims approaching 10 million gallons per acre. The higher-end claims for algae in bioreactors are either pure fantasy, or would require vertical farms with artificial light, but a 100,000 gallons per acre per year (1/100th of the high-end claims) is generally considered achievable. For comparison, Zeachem is aiming for 2,000 gallons of ethanol per acre of sugarcane per year, one of the most productive conventional biofuel crops. Corn produces less than 500 gallons of ethanol per acre per year.

The potential of a hundred times improvement in fuel yields over conventional crops keeps people excited about algae. On paper, such yeilds would allow algae to replace oil in our economy. Actually achieving these yields is tricky. Open ponds have problems with contamination by wild algae, and evaporate enormous amounts of water into the atmosphere. They also need to be fed with carbon dioxide and nutrients to achieve good yields, without so much stirring that the algae (which prefer still water) are disturbed. Bioreactors help solve the contamination and water evaporation problems, and can allow more surface area for light absorption and algal growth. But bioreactors cost much more than open ponds, and require more maintainance and attention to keep them at the proper temperatures and light levels. Like open ponds, they need to be fed CO2 and micronutrients to achieve optimal growth without creating too much turbulence for the algae to grow. ...

Here's a quick list of the publicly traded companies I know of that are working on algae, and what they do:

Green Star Products, Inc. (GSPI.PK). Green Star's primary business seems to be selling continuous flow biodiesel reactor technology. This is not a great business because it's currently hard to sell biodiesel for more than the cost of the inputs needed to make it. They have also developed a formulation of micronutrients that they think are excellent for increasing the productivity of certain algae strains.

OriginOil, Inc. (OOIL.OB). Origin has developed a process using electromagnetic fields to extract oil from living algae without killing the cell. If they can make it work at reasonable cost, this technology should be a real boon to the industry. Unfortunately, the company is losing money hand over fist, and does not have revenues or cash to speak of. Since the company will have to keep raising new money from investors for the foreseeable future, the stock will almost certainly continue to fall until it can begin to fund its operations internally.

PetroAlgae, (PALG.OB). PetroAlgae is attempting to commercialize an open pond "microcrop" technology (they are working with other small aquatic plants such as duckweed as well as algae.) Yields will likely be relatively low for algae because they do not add carbon dioxide to the process, and they will have to cope with large water losses from evaporation. Like OriginOil, PetroAlgae has no revenues and will need to raise money soon to continue operations. On March 5, the company privately sold stock at $8 per share, despite the fact that its shares are currently trading for around $22 on the open market. I can't imagine why the stock has climbed since it went public in 2008 at around $3. If you can find shares to borrow, this looks like a stock to short.

PetroSun Inc. (PSUD.PK). Back in September 2007, PetroSun made a splash as the first public company to try to commercialize algae for biofuel. I was skeptical at the time, and said so in March 2008. My skepticism now seems justified, since now their website has a couple mentions of algae, but the catfish farms they converted into algae farms in 2009 are not mentioned, and their only projects and prospects are traditional oil and gas projects. The stock is down to $0.045 from $0.16 since I panned it in 2008.

Conclusion

Algae has great promise for producing liquid fuels in sufficient quantity to replace petroleum, and it can do so without using excessive water or farmland. That potential, however, is fairly far off. The technology is capital intensive and far from commercialization, a combination almost certain to make investors in the public stocks poorer rather than richer. If and when fuel made from algae is available in significant quantity to make a dent in our thirst for fossil fuels, it will probably have been developed by companies that public investors cannot currently buy. Stock market investors should wait until this industry matures from its current infancy to something closer to adolescence. Buyers of the current batch of infant companies are likely to suffer the fate of other new parents: many sleepless nights.

The Guardian has a report on efforts by the US military to promote the development of algae based fuel (and some very optimistic timeframes being claimed for production) - Algae to solve the Pentagon's jet fuel problem.

The brains trust of the Pentagon says it is just months away from producing a jet fuel from algae for the same cost as its fossil-fuel equivalent.

The claim, which comes from the Defense Advanced Research Projects Agency (Darpa) that helped to develop the internet and satellite navigation systems, has taken industry insiders by surprise. A cheap, low-carbon fuel would not only help the US military, the nation's single largest consumer of energy, to wean itself off its oil addiction, but would also hold the promise of low-carbon driving and flying for all.

Darpa's research projects have already extracted oil from algal ponds at a cost of $2 per gallon. It is now on track to begin large-scale refining of that oil into jet fuel, at a cost of less than $3 a gallon, according to Barbara McQuiston, special assistant for energy at Darpa. That could turn a promising technology into a ­market-ready one. Researchers have cracked the problem of turning pond scum and seaweed into fuel, but finding a cost-effective method of mass production could be a game-changer. "Everyone is well aware that a lot of things were started in the military," McQuiston said.

The work is part of a broader Pentagon effort to reduce the military's thirst for oil, which runs at between 60 and 75 million barrels of oil a year. Much of that is used to keep the US Air Force in flight. Commercial airlines – such as Continental and Virgin Atlantic – have also been looking at the viability of an algae-based jet fuel, as has the Chinese government.

"Darpa has achieved the base goal to date," she said. "Oil from algae is projected at $2 per gallon, headed towards $1 per gallon."

McQuiston said a larger-scale refining operation, producing 50 million gallons a year, would come on line in 2011 and she was hopeful the costs would drop still further – ensuring that the algae-based fuel would be competitive with fossil fuels. She said the projects, run by private firms SAIC and General Atomics, expected to yield 1,000 gallons of oil per acre from the algal farm.

Robert Rapier has an interview with an un-named company CEO about biofuel production from algae - Interview With an Algae CEO .

One of the things I did on the trip was take a tour of an algae farm. I spent some time with the CEO, and got to ask numerous questions. He had some very interesting comments, which I will capture below. Because he has to work in this industry, I am not going to identify him or his company. Below I will indicate his comments as CEO and mine as RR.

RR: Talk about some of the challenges of growing algae.

CEO: The list is exhaustive. It takes a lot of water. It takes a lot of electricity. Solar penetration is only about an inch into the water, so we really have to keep the ponds mixed well. One thing people never mention is the phosphorous requirement. Phosphorous is a limited resource, but a critical one for the algal growth. If you are trying to make oil, then you have to stress the algae and push it into a lipid production mode. But that causes growth rates to stall. If you engineer algae for higher oil production rates, they can't out-compete the native species in the ponds.

RR: I talk to John Benemann on a fairly regular basis, and he has said much the same. He likes algae for the potential, for the water treatment possibilities, and as something that should continue to get funding for lab research. But he is pretty harsh on the uber-optimists.

CEO: Yes, I know John as well. He has done some good work in the field. Have you seen his latest paper?

RR: (He shows me the paper, and I acknowledge that I do in fact have that one).

RR: I was looking at those open ponds and wondering if the evaporation rates wouldn't be problematic. That could create seriously high water usage, especially for those schemes that propose to use open ponds where the solar insolation is high (like in the Arizona desert).

CEO: Yes, those open ponds require a lot of fresh water. You should see our water bill.

RR: What about photobioreactors? Some people envision them as a solution to some of the problems (evaporation, contamination) of the open pond system.

CEO: They are ungodly expensive relative to how much algae they can produce.

RR: So how do you foresee the future of algal fuels?

CEO: There is no future. Look, some of these guys are out there committing fraud with their yield claims. Nobody is making fuel except for small amounts in the lab. I just don't see how anyone will ever make cost-competitive fuel from algae.

RR: How about fermentation approaches like Solazyme? I haven't written that off yet.

CEO: Yes, but they are using sugar, and sugar is food. They say they won't always use sugar, but who knows?

Plastics News has an article on making bioplastic using algae as the feedstock - Cereplast develops algae-based bioplastics..

Bioplastics maker Cereplast Inc. plans to launch a line of bioplastic resins based on all-natural algae by the end of 2010.

“Algae-based resins represent an outstanding opportunity for companies across the plastic supply chain,” Cereplast founder, Chairman and CEO Frederic Scheer said in an Oct. 20 news release. “We believe that algae has the potential to become one of the most important green feedstocks for biofuels, as well as bioplastics.”

Hawthorne, Calif.-based Cereplast currently uses corn, tapioca, wheat and potatoes to make its bioplastics. The firm also compounds Ingeo-brand PLA bioplastic made by NatureWorks LLC.

“It’s critical to have access to feedstocks not based on starches,” Scheer said by phone Oct. 20. Non-starch feedstocks “have less impact on the food chain and are less sensitive to price changes.”

Scheer said Oct. 20 that the algae-based resins could be blended with polypropylene or other standard resins and used in injection molded or thermoformed parts. Cereplast also is working to use the new products in extrusion applications, he said.

Green building idea of the week from Inhabitat is this photo-bioreactor encrusted building design for producing algae based biofuels - Algae-Covered Buildings Boost Biofuel Production.

Are living green buildings just around the corner? A report recently released by the Institute of Mechanical Engineers suggests that sealed containers of algae photobioreactors could be integrated into the sides of buildings to produce biofuels and sequester carbon, adding a whole new meaning to the term ‘green building’. As the algae grows it sucks up CO2 from the surrounding air which can then be stored.

One of the benefits to harnessing aglaculture for biofuels is that it can use waste-water and ocean water, and it is relatively harmless to the local environment should it spill or leak. Algae also has a much higher production rate per acre (or vertical foot in this case) than soy or corn. Additionally, some studies have shown that up to 99% of the CO2 introduced to the solution can be converted or sequestered.

Currently photobioreactors are much more expensive to use than conventional open-pond systems, but this is why the The Institute of Mechanical Engineers wants more research funding to be pushed toward PBRs. Whereas open pond-style algaculture covers large areas of habitat, PBRs could be incorporated into our existing city infrastructure and provide the filtering and fuel production where we need it most. Although biofuels would help shift us away from oil, they do nothing to address the underlying issues that are such tight siblings with car culture like global warming and social justice. While we try to figure out the future of the planet, maybe flying and driving on algae will buy us a little time.

The report also pointed to several other green building solutions including constructing forests of carbon storing synthetic trees, and using solar reflectors and green roofs as a way of preventing excessive solar heat gain. Hot roofs and asphalt can significantly alter an area’s local climate as well as drive up the need for air conditioning (and the peaker plants that A/C requires).

Cleantech.com has a report on yet another planned algae based biofuel refinery - Plankton Power plans for biofuels facility on Cape Cod.

Wellfleet, Mass.-based algae biofuel developer Plankton Power and Woods Hole, Mass.-based virtual incubator Regional Technology Development of Cape Cod said today they have established a public-private consortium to build a new facility to produce renewable biofuels from algae.

The site, to be called the Cape Cod Algae Biorefinery, is expected to focus on pilot- and commercial-scale development of algae biodiesel that would be cost-competitive with existing petroleum- and vegetable-based fuels, with improved performance characteristics.

The facility, with access to Cape Code’s convenient source of seawater, includes collaboration with the Massachusetts National Guard, Woods Hole Oceanographic Institution, Marine Biological Laboratory, and the Cape Cod Commission.

The proposed biorefinery is expected to be constructed on five acres on the Massachusetts Military Reservation in Bourne, Mass., supported by the state’s National Guard. The facility would focus on Plankton’s algae-growth technology, the result of 20 years of cold saltwater species research and production.

The biodiesel produced from Plankton’s cold-saltwater algae species serves as a drop-in replacement for petroleum-based biofuels, according to the company. By fall 2010, Plankton expects to initiate pilot-scale operations to generate up to one million gallons of biodiesel per year—enough fuel to supply Cape Cod's current biodiesel usage.

The Cape Cod Algae Biorefinery Consortium has submitted a $20 million proposal to the U.S. Department of Energy that would leverage $4 million in private funding to construct the proposed facility. MassDevelopment, the Massachusetts Clean Energy Center, and Loud Fuel are supporting the initiative.

Massachusetts-based Waltham Technologies is also producing biodiesel, but with a special breed of blue-green algae and focused on the beverage industry. The bacteria doesn’t need acres of land, sunlight or ponds often required to grow green plant-like algae (see Blue-green algae turns dirty water into clean energy).

Cape Cod isn’t only being looked at for its biofuel capabilities. A 468-megawatt wind turbine project was proposed to be built off the coast. The $1 billion project was met with some roadblocks from the Cape Cod Commission (see Cape Wind's latest hurdle a breeze?).

Technology Review has an article on a new process for creating biofuel using genetically engineered algae - A Biofuel Process to Replace All Fossil Fuels.

A startup based in Cambridge, MA--Joule Biotechnologies--today revealed details of a process that it says can make 20,000 gallons of biofuel per acre per year. If this yield proves realistic, it could make it practical to replace all fossil fuels used for transportation with biofuels. The company also claims that the fuel can be sold for prices competitive with fossil fuels.

Joule Biotechnologies grows genetically engineered microorganisms in specially designed photobioreactors. The microorganisms use energy from the sun to convert carbon dioxide and water into ethanol or hydrocarbon fuels (such as diesel or components of gasoline). The organisms excrete the fuel, which can then be collected using conventional chemical-separation technologies.

If the new process, which has been demonstrated in the laboratory, works as well on a large scale as Joule Biotechnologies expects, it would be a marked change for the biofuel industry. Conventional, corn-grain-based biofuels can supply only a small fraction of the United States' fuel because of the amount of land, water, and energy needed to grow the grain. But the new process, because of its high yields, could supply all of the country's transportation fuel from an area the size of the Texas panhandle. "We think this is the first company that's had a real solution to the concept of energy independence," says Bill Sims, CEO and president of Joule Biotechnologies. "And it's ready comparatively soon."

The company plans to build a pilot-scale plant in the southwestern U.S. early next year, and it expects to produce ethanol on a commercial scale by the end of 2010. Large-scale demonstration of hydrocarbon-fuels production would follow in 2011.

So far, the company has raised "substantially less than $50 million," Sims says, from Flagship Ventures and other investors, including company employees. The firm is about to start a new round of financing to scale up the technology.

The new approach would also be a big improvement over cellulose-based biofuels. Cellulosic materials, such as grass and wood chips, could yield far more fuel per acre than corn, and recent studies suggest these fuel sources could replace about one-third of the fossil fuels currently used for transportation in the United States. But replacing all fossil fuels with cellulose-based biofuels could be a stretch, requiring improved growing practices and a vast improvement in fuel economy.

Algae-based biofuels come closest to Joule's technology, with potential yields of 2,000 to 6,000 gallons per acre; yet even so, the new process would represent an order of magnitude improvement. What's more, for the best current algae fuels technologies to be competitive with fossil fuels, crude oil would have to cost over $800 a barrel says Philip Pienkos, a researcher at the National Renewable Energy Laboratory in Golden, CO. Joule claims that its process will be competitive with crude oil at $50 a barrel. In recent weeks, oil has sold for $60 to $70 a barrel.

The New York Times has a report on Exxon's new partnership with Craig Venter to produce algae based biofuel - Exxon to Invest Millions to Make Fuel From Algae.

The oil giant Exxon Mobil, whose chief executive once mocked alternative energy by referring to ethanol as “moonshine,” is about to venture into biofuels.

On Tuesday, Exxon plans to announce an investment of $600 million in producing liquid transportation fuels from algae — organisms in water that range from pond scum to seaweed. The biofuel effort involves a partnership with Synthetic Genomics, a biotechnology company founded by the genomics pioneer J. Craig Venter.

The agreement could plug a major gap in the strategy of Exxon, the world’s largest and richest publicly traded oil company, which has been criticized by environmental groups for dismissing concerns about global warming in the past and its reluctance to develop renewable fuels.

Despite the widely publicized “moonshine” remark a few years ago by Exxon’s chairman and chief executive, Rex W. Tillerson, the company has spent several years exploring various fuel alternatives, according to one of its top research officials.

“We literally looked at every option we could think of, with several key parameters in mind,” said Emil Jacobs, vice president for research and development at Exxon’s research and engineering unit. “Scale was the first. For transportation fuels, if you can’t see whether you can scale a technology up, then you have to question whether you need to be involved at all.”

He added, “I am not going to sugarcoat this — this is not going to be easy.” Any large-scale commercial plants to produce algae-based fuels are at least 5 to 10 years away, Dr. Jacobs said.

Exxon’s sincerity and commitment will almost certainly be questioned by its most galvanized environmentalist critics, especially when compared with the company’s extraordinary profits from petroleum in recent years.

“Research is great, but we need to see new products in the market,” Kert Davies, the research director at Greenpeace, said. “We’ve always said that major oil companies have to be involved. But the question is whether companies are simply paying lip service to something or whether they are putting their weight and power behind it.” ...

Currently, about 9 percent of the nation’s liquid fuel supply comes from biofuels — most of it corn-based ethanol. And by 2022, Congress has mandated that biofuel levels reach 36 billion gallons.

But developing biofuels has been tricky, and Mr. Tillerson has not been alone in his skepticism. Many environmental groups and energy experts have been critical of corn-derived ethanol, because of its lower energy content and questionable environmental record.

According to Exxon, algae could yield more than 2,000 gallons of fuel per acre of production each year, compared with 650 gallons for palm trees and 450 gallons for sugar canes. Corn yields just 250 gallons per acre a year.

Exxon’s partnership with Synthetic Genomics is also a vote of confidence in the work of Dr. Venter, a maverick scientist best known for decoding the human genome in the 1990s. In recent years, he has focused his attention on a search for micro-organisms that could be turned into fuel.

“Algae is the ultimate biological system using sunlight to capture and convert carbon dioxide into fuel,” Dr. Venter said.

Algal biofuel, sometimes nicknamed oilgae by environmentalists, is a promising technology. Fuels derived from algae have molecular structures that are similar to petroleum products, including gasoline, diesel and jet fuel, and would be compatible with the existing transportation infrastructure, according to Exxon.

Continental Airlines, for example, has demonstrated the fuel’s viability in a test flight of an airplane powered in part by algae-based fuel.

The Pentagon has also been looking at alternative fuels, including algae, to reduce the military’s dependence on oil.

And while cost-effective mass production of algae has eluded researchers so far, it holds potential advantages over other sources of biofuels. Algae can be grown in areas not suited for food crops, using pools of brackish water or even farming them in seawater.

Exxon Mobil Corp., the largest U.S. oil company, may be fined more than $1 billion for “malicious” sabotage of wells to prevent other producers from tapping fields it no longer wanted, the Texas General Land Office said.

Jerry Patterson, commissioner of the land office that oversees oil leases that help fund Texas schools, asked the Texas Railroad Commission to conduct hearings into an alleged 1990s program at Exxon Mobil of plugging abandoned wells with trash, sludge, explosives and cement plugs. The barriers made it impossible for other producers to revive the wells, Patterson said in a statement he gave to Bloomberg News yesterday.

Under Railroad Commission rules, Exxon Mobil could face fines of $10,000 a day per well, Patterson said in the statement, which he plans to release on Monday. He said those penalties could add up to more than $1 billion on wells the company abandoned in 1991 after a disagreement over royalties with the owners, the O’Connor family, a Texas oil dynasty.

Margaret Ross, an Exxon Mobil spokeswoman, said, “The area in which the wells are located has a water table very close to the surface. It was critical that Exxon protect the groundwater by plugging the wells solidly and thoroughly.”

In March, the Texas Supreme Court dismissed lawsuits against Irving, Texas-based Exxon Mobil for damaging the wells, ruling that too much time had passed. O’Connor heirs and Emerald Oil & Gas Co., which took over some of the former Exxon Mobil leases, were plaintiffs in the suits.

‘Flagrant Violations’ Alleged

“Exxon committed irrefutable, intentional and flagrant violations of state rules regulating the oilfield,” Patterson said in the statement. “The senseless waste of our natural resources, the sabotage of a producing oilfield and cover-up by Exxon is a malicious act that must be dealt with by the state of Texas.”

The Railroad Commission in Austin hasn’t decided whether to hold hearings on the well closings, said Ramona Nye, a spokeswoman for the agency. The three commissioners are next scheduled to meet on July 21. Nye confirmed the agency has the authority to fine companies $10,000 a day for improperly plugging an old well.

The 118-year-old commission has been responsible for regulating oil production in the state since the 1930s, when rampant drilling caused a supply glut that collapsed crude prices, according to the Texas State Historical Association.

From the 1950s to the late 1980s, the O’Connors earned more than $40 million in royalties on crude and gas pumped from 121 wells that Exxon Corp., as the company was then known, and a predecessor, Humble Oil & Refining Co., drilled on the family’s land near Corpus Christi, according to court filings.
Royalty Dispute

The relationship between Exxon and the family deteriorated in the late 1980s, when the company’s request for a reduction in the 50 percent royalty rate was rebuffed, court documents showed. Exxon said the field was no longer profitable and began shutting wells, a process that concluded in August 1991, the documents showed.

Two years later, Emerald Oil, a closely held energy company based in Refugio, Texas, agreed to lease from the O’Connors one- third of the area formerly operated by Exxon. When Emerald drilled into the plugged wells to revive production, drill bits collided with cement, severed pipes and explosive charges normally used to perforate rock formations, Patterson said.

Exxon failed to accurately describe the obstacles it dumped into the wells in reports known as W-3s that it filed with the Railroad Commission, Patterson said in a July 15 letter to the Railroad Commission. Those reports gave Emerald a false picture of how difficult and costly it was going to be to resurrect crude output, he said.

Robert Rapier is saying "I told you so", pointing to this article in Greentech media noting the demise of algae biofuel hopeful Greenfuel - GreenFuel Technologies Closing Down.

GreenFuel Technologies, one of the earliest, best funded and most publicized algae companies, is shutting its doors, a victim of the credit crunch.

"We are closing doors. We are a victim of the economy," said Duncan McIntyre at Polaris Venture Partners, which invested in Greenfuel.

Although it has raised millions of dollars and landed a high-profile deal with Auranta in Spain to erect test facilities, it could not get money to complete the project. In January, it laid off 19 people, or half of the staff.

The company has also been chronically saddled with delays and technical problems. The company's plan was to pump carbon dioxide from smokestacks into bioreactors – i.e., sealed plastic bags filled with algae and water. The algae would grow fat on the carbon dioxide and later be harvested by GreenFuel to be turned into oil for biodiesel. Protein and other matter from the algae would also be sold to pet food manufacturers.

Ideally, GreenFuel's plants would sequester greenhouse gases, help the U.S. get off foreign oil, and bring the company revenue from carbon credits and product sales.

Getting the whole thing to run smoothly, though, was tougher than expected. GreenFuel could grow algae. The problem was controlling it. In 2007, a project to grow algae in an Arizona greenhouse went awry when the algae grew faster than they could be harvested and died off. The company also found its system would cost more than twice its target.

That led to the company laying off about half its staff of 50 at the time and hiring Ethernet inventor Bob Metcalfe as interim CEO. Metcalfe led the restarting and decommissioning of the Arizona project after what he said was a successful trial, and helped the company raise $13.9 million in funding from VCs including Access Private Equity, Draper Fisher Jurvetson and Polaris Venture Partners.

Technology Review has an article on the latest company claiming to cheaply and efficiently extract oil from algae - A New Processing Scheme for Algae Biofuels.

OriginOil, an algae biofuel company based in Los Angeles, has developed a simpler and more efficient way to extract oil from algae. The process combines ultrasound and an electromagnetic pulse to break the algal cell walls. Then the algae solution is force-fed carbon dioxide, which lowers its pH, separating the biomass from the oil.

"It's low energy, there's not a lot of machinery, and it's a simple process," says CEO Riggs Eckelberry. The algae and oil can be separated in a matter of minutes, he adds.

A number of companies are attempting to take advantage of the fact that algae naturally produce oil. But growing algae and extracting its oil efficiently is difficult, time consuming, and expensive. While some companies are focusing on better growing and harvesting methods, others, such as OriginOil, are focused on finding new ways to access the oil.

Each algal cell has a sturdy cell wall protecting it, making the oil hard to get at. The algae also have to be separated from the water that they are grown in and dried out before the oil can be removed. Typically, the oil is expelled from algae by using a press to physically squeeze it out. The leftover mashed-up pulp is then treated with a solvent to remove any remaining oil. While the combination removes about 95 percent of the oil, it is energy intensive. Another method does away with the press and treats the algae pulp with supercritical fluids that can remove nearly all the oil, but the process requires special machinery, adding to the expense. Other researchers are genetically engineering algae that secrete oil.

In OriginOil's process, the algae solution is channeled through a pipe to which an electromagnetic field and ultrasound are applied, rupturing the cell walls and releasing the oil. Carbon dioxide is bubbled through, which lowers the pH. The resulting solution is then piped into another container. The lowered pH separates the biomass from the oil, and the oil floats to the top, while the biomass sinks to the bottom. The oil can be skimmed off, the biomass can be further processed, and the water is recycled. The whole process takes a matter of minutes, says Eckelberry.

Der Spiegel has an interview with Boeing's "chief environmental strategist", Billy Glover, on prospects for biofuel use in air transport (he's very optimistic, but short on detail) - Algae Could 'Supply Entire World with Aviation Fuel'.

SPIEGEL ONLINE: Mr. Glover, given the current low price of oil, why would airlines still even be interested in biofuels?

Glover: Indeed, the oil price has changed rapidly. But it has done that many times before and it will continue to do so. Even today, the highest operating expense for an airline is fuel. It remains a priority to find a way to mitigate that situation. That is why Boeing is trying to open up this avenue of alternative fuel. It can help that situation while having a better environmental performance at the same time.

SPIEGEL ONLINE: It seems that, after a few test flights last year, not much has happened.

Glover: Oh no, we are moving forward very rapidly! The first test flight was in February 2008. But more recently, in December 2008 and in January 2009, there were three test flights in quick succession with a higher blend of biofuel and better performance. We have already achieved quite a bit in terms of technical understanding and technical qualification.

SPIEGEL ONLINE: Still, these test flights seemed first and foremost to be PR stunts aimed at burnishing the airline industry's green credentials.

Glover: We have worked hard and collected quite a bit of technical data. The industry is currently preparing a technical report that is coming out in the next couple of months. That will then go into the fuel specification approval process.

SPIEGEL ONLINE: How high do oil prices have to be before biofuels become economically sensible?

Glover: Affordability is always critical -- and we are not where we need to be yet. But we are at the beginning of a learning curve. The price is expected to come down in fairly short order. That is not going to be an issue in the longterm.

SPIEGEL ONLINE: Where are we now and where do we need to go in terms of production price?

Glover: It depends very much on the types of plants used as well as the methods for processing and delivering that into finished fuel. I do not think there is a simple way to explain a particular price and a particular time. It is all situational.

SPIEGEL ONLINE: How do you plan to ensure that the crops needed for biofuel production do not endanger food production or contribute to deforestation?

Glover: We cannot have commercialization of biofuels unless we make sure that it is done in a sustainable fashion. We aim to firmly establish a user group of top airlines from around the world that will lay out sustainability criteria and initiate aviation-specific discussions and research. We expect that to result in a code of practice to make clear what is acceptable and what is not.

SPIEGEL ONLINE: One of the major points of concern is land use. Take, for example, jatropha, one possible source of biofuels. How many square kilometres of that plant would actually be necessary to fuel a flight over the Atlantic Ocean?

Glover: Good question, I never figured it out that way. We really do not expect that all of the world's flights will be fuelled by jatropha plants exclusively.

SPIEGEL ONLINE: Than let us talk about algae. How big do these cultures need to be?

Glover: The optimists say, to supply the entire world with aviation fuel, you would perhaps need an area of the size of Belgium. We still need quite a bit of research and development work to really determine whether that is possible. So far, we are very pleasantly surprised by the innovation and the progress.

SPIEGEL ONLINE: The biofuels will be blended with traditional kerosene-based jet fuel. What ratio is being planned?

Glover: The fuel specification that is being considered would allow up to a 50 percent mix. Whether one would actually be able to achieve this number with an initial commercial offering will depend very much on supply availability. But over time we actually expect it to increase to even beyond 50 percent.

SPIEGEL ONLINE: How do you plan to make sure the different types of fuel are mixed properly and do not clog the plane's fuel lines?

Glover: The mix is done outside the plane before the fuel has entered into the fuel distribution system. At that point the blend is indistinguishable in performance characteristics from traditional jet fuel. No changes are required to the airplanes; no additional infrastructure is needed at the airports.

New Scientist has a post on Korean research into creating biofuel from seaweed - Biofuel from the oceans.

Almost all commercially produced liquid biofuels come from either sugary crops like sugar beet or cane, or starchy ones like potatoes or corn. But every acre used to cultivate those crops uses one that could grow food - potentially causing food shortages and pushing up prices.

Using woody material instead of crops could sidestep this to some extent by using biomass from more unproductive land. And producing biofuels from freshwater algae cultivated in outdoor ponds or tanks could also use land unsuitable for agriculture. But neither approach has been made commercially available.

Now a group at the Korea Institute of Technology in South Korea has developed a way to use marine algae, or seaweed, to produce bioethanol and avoid taking up land altogether.

The group says seaweed has a number of advantages over land-based biomass. It grows much faster, allowing up to six harvests per year; unlike trees and plants, it does not contain lignin and so requires no pre-treatment before it can be turned into fuel; and it absorbs up to seven times as much carbon dioxide from the atmosphere as wood.

The group's patent suggests treating all sizes of algae - from large kelp to single-celled spirulina - with an enzyme to break them into simple sugars, which can then be fermented into ethanol.

The resulting seaweed biofuel is cheaper and simpler to produce than crop or wood-based fuels, and will have no effect on the price of food, says the group.

Bloomberg reports that there has been another successful test flight using a mix of jatropha and algae derived biofuels - Algae-Powered Jet Proves Biofuel in Continental Test.

Continental Airlines Inc. conducted a demonstration flight today using biofuel, the first such test in the U.S. with a commercial jet, as the industry experiments with ways to curb pollution that leads to global warming. A fuel blend made from algae and jatropha scrub plants powered the unmodified twin-engine Boeing Co. 737-800, Continental said. The flight, which took off without incident about 12:15 p.m. Houston time at George Bush Intercontinental Airport, lasted about 90 minutes. ...

The test by Houston-based Continental, the fourth-largest U.S. airline, is a step toward the International Air Transport Association’s goal of having member carriers use 10 percent alternative fuels by 2017 to reduce global warming. The European Union will cap airline carbon-dioxide emissions beginning in 2012.