Scale Up

The A.I.M. Interview: CEHMM’s Doug Lynn

April 10, 2011, by David Schwartz
AlgaeIndustryMagazine.com

Southeastern New Mexico’s Center of Excellence for Hazardous Materials Management, better known as CEHMM, was established in May of 2004 as a 501(c)(3) organization dedicated to reducing the impact of hazardous materials on the environment. Somewhat under the radar, the organization, driven by Executive Director Doug Lynn, has become one of the country’s most progressive algae cultivation and processing operations. On April 19, 2010 CEHMM became a fully integrated algal biorefinery with the capability to operate at more than 1000 gallons per day throughput.

We spoke with Doug Lynn recently to find out about their recent progress in scaling up.

When we last visited CEHMM in late 2009 (see http://www.algaeindustrymagazine.com/doug-lynn/) you were somewhere in between the pilot and demonstration phase with your first two raceway pond systems, and were not quite in operation with a dedicated SRS-based processing facility on site. Give us an update on how things have progressed since then.

We’re now in full operation with over a million liters of culture. We’ve added three additional quarter-acre raceway ponds that are over a hundred thousand gallons each. We’ve got a fully integrated process. We harvest in 21,000-gallon increments, four days a week. We harvested less aggressively through the winter, but have harvested year round for two consecutive years now. Most of our cultures stay at around a gram per liter—which equates to more than 2700 pounds of dry algae in an acre-foot of water.

Many people in the industry use the grams per meter squared per day to describe productivity. We operate more along the lines of true agricultural nomenclature. But for the scientific community’s sake, that equates to around 40 grams per meter squared per day productivity.

The reason we only harvest four days a week is because that’s really all the resources we have right now as far as personnel and time. During extraction, we can process 1000 gallons a day throughput capacity, and we can make a half-gallon of oil for every 20 gallons of throughput.  We extract wet and our algae consistently produces 35% to 45% oil content. We’ve had it over 50%, and can drive it to that standard, but the residence time required is too long.

...it’s all about the farming and you’ve got to treat this like a crop. But that doesn’t mean you ever neglect the science.

How are you handling crop protection?

We have developed technology that was the result of invaders that came in on the heels of Hurricane Alex in June and July of 2010—we experienced an invasion of species we’d never seen before. We worked diligently at trying to find a way to either mechanically or chemically treat these ponds so that we could get back into a pure crop culture.

It was almost like the discovery of penicillin when we found a very inexpensive way to treat the ponds and, lo and behold, we now have absolutely pure cultures in all of our ponds. Since then we’ve had no other invaders, no rotifers—they are 100% pure cultures and we can keep them that way, and it costs us less than $100 per 400,000 gallons. The treatment lasts up to four months. And we can still maintain food grade because these are biodegradable reagents we use. Our cultures are probably every bit as pure, if not purer, than those being raised in closed photo bioreactors.

Is this treatment proprietary, and are you going to be licensing it?

Yes it is, and yes we are. We currently have some pretty big names that want to license it and are in the process of negotiations right now. We’ve been able to replicate the treatment time after time, and we have it dialed in. We’ve had our algae analyzed for livestock nutritional needs, fish digestibility and palatability—for both of those it rates excellent. And almost 20% of the oil we pull out of the algal cells is EPA, one of the Omega-3 phospholipids.

Also when we visited you said the operation had the potential to produce 6,000 gallons of oil per acre per year. How has experience panned out against that expectation?

The potential to do in excess of 5-6000 gallons per acre-foot of water per year is absolutely reasonable. But we’re not able to do it yet, because we don’t have the personnel to run our refinery 24-7. Every time we harvest we’re pulling off four to five hundred pounds of dry algae daily. We currently maintain over 1000 gallons of concentrated biomass in storage. You extrapolate that out to productivity measurements that the industry uses as their standard, which is grams per meter squared at 12 inches of depth. So, during our optimum growing season, we run at or more than 40 grams per meter squared per day productivity. As a farmer would see it, at a gram to a gram and a half per liter, we’ve got nearly 3000 pounds of dry algae residing in that acre-foot of water and we can harvest half of that—around 1500 dry pounds of algae—every week.

One of CHEMM's algae ponds in Southern New Mexico

One of CHEMM's algae ponds in Southern New Mexico

Despite all the hype and excluding pharmaceutical grade PBR growers, (their biomass is cost prohibitive for animal nutrition or fuels) not more than three or four entities can even come close to, or compete with, these numbers. One of those who are definitely capable, not surprisingly, is Sapphire.  I’ll stand toe to toe with anybody if they want to step up and look at purity and quantity of culture. I was thinking about issuing a national challenge and see who can make the most biomass, make the most oil, produce the most co-products and produce the highest quality (purity) biomass on an acre-foot of water.  Stop predicting performance from test tubes, beakers or little bathtub raceways. This would alleviate all the hype—see who can walk the talk. I believe it would reduce the top 50 algae companies down to less than five. The problem here is that it may embarrass the federal granting agencies and misled investors when you consider where huge sums of their monies have ended up. If anyone doesn’t believe me, come here we’ll show you what we can do first hand. I’m not a bit shy about that. We can walk the talk. (Editor’s note: contact Doug (575) 885-3700 if you’d like to discuss or challenge his claims.)

When we first talked the vision seemed to be oil for fuel. The industry at large has moved since then in the direction of higher value products from oil, at least in the early phase of commercial scale. Has your focus changed as well?

There’s a saying that what goes into pork sausage, is everything but the squeal. We need to get everything but the squeal out of algae. To focus on one product with something that makes so many co-products is unreasonable if you are trying to get a commercially viable and marketable industry on its feet.

The economic feasibility analyses that we’ve run with Dr. Starbuck at NMSU and Dr. Richardson at Texas A&M all graphically illustrate that even at over $150 a barrel for crude oil, algae oil just for fuel alone is not economically feasible. Granted, if you were a defense contractor or were one of these consortia that got millions of dollars to research it, then it may be profitable for you and your career. But my kids and grandkids aren’t going to see it.

So what we’ve discovered in all the economics we’ve looked at is that you take every single aspect, every byproduct, every co-product, that you can derive from these cells and you come to the realization that fuel is probably the least valuable product you can pull out of this algae.

...we’ve had no other invaders, no rotifers—they are 100%  pure cultures and we can keep them that way, and it costs us less  than $100 per 400,000 gallons.

But that doesn’t mean that we give up on fuel. There will always be demand for fuel. Neither do we ever give up on carbon sequestration. At my facility we’re sequestering two metric tons of carbon every day just growing our algae. We always strive to make better fuel, and make more fuel, but we have to realize there are so many other products in algae that will make it economically viable today.

What strains are you working with and have you been rotating them for seasonal conditions?

We grow basic strains of wild algae. But without giving up a whole lot of information on that, we’ve got two species of the same genus. One prefers cold weather, one prefers warmer weather, so we cohabitate the ponds with them, and that’s how we’re able to harvest through the winter, because one simply predominates the other. Their oil profiles are the same and crop protection protocols are identical. Additionally, the nutritional aspects are all the same. One just prefers a little cooler water. But we’re not getting any losses in the summer, either, when it’s 110 degrees outside and the pond temperatures are near 90 degrees. We have mechanisms in place that we can simply cool the water down mechanically, and it’s very inexpensive.

More and more players in the algae space have teamed up in collaborations and consortia. Has CEHMM joined forces with others for mutual benefit?

We’ve intentionally kind of flown under the radar, because early on we entered into arrangements with some fairly large government contractors and they wanted to run roughshod over us, and that’s just not acceptable. So we have intentionally maintained some autonomy.

I’m not about to give away the IP or knowhow we’ve derived in getting where we’re at today. Some of the consortia, universities, national labs and other folks in this industry operate under the auspices that if you sign up you automatically surrender your rights to all of your intellectual property for very little to no return.

Sometimes you get in with a consortia or elaborate collaboration with multiple partners and the money turns out to get squeezed so hard that by the time you get anything out of it, you’re barely maintaining basic operational needs.

Right now we’re in the process of negotiating with several private investment firms who have examined other algal companies worldwide and the results of their investigations are that we’re a company that is shovel-ready to pull the trigger on full-blown commercialization and get product in the market.

As algae commercialization is beginning to happen on a broader scale, what role do you see CEHMM playing going forward?

CEHMM is a 501 C-3 and that puts us in a unique but precarious position. No one wants to invest in a not for profit organization, and there are a lot of strings attached to having that kind of status. So these investment groups will come in and want to license the technology and knowhow that’s been developed within the organization, and that’s how they’ll run with their commercial facility. CEHMM will probably take proceeds from that and launch another research project or put it into a couple of our existing R&D projects to further develop them and grow the organization. The charter for the CEHMM organization is to build this kind of technology and then get it out into the marketplace where it can be commercialized

So what are your expansion plans for CEHMM’s algae project?

I want to go to 1000 acres, and I want it to happen now. I can confidently pull the trigger on a hundred acre facility and start making product in ninety days if I have the financing. Right now the private investment groups are doing their due diligence on it, and it looks very promising.

Because of your background in farming and ranching, you relate more to the farmer’s mentality in approaching the era of algae as a farmed energy crop. Do you consider yourself an evangelist in getting this message to other farmers?

Without question I see a role in that, because since Day 1 when I used to give presentations in public meetings I would emphasize that it’s all about the farming and you’ve got to treat this like a crop. But that doesn’t mean you ever neglect the science. We got to where we are based on science. We’ve done the right species selection, developed our crop protection, balanced the nutrients that we feed the algae to get them to these densities where the ponds look like big vats of pea soup. That’s all been done with science. But the architecture of all of the science has always been in support of farming—crop management.

If you ever exclude the farmers from the equation, you’ll never get to commercial. Because these are the people who are able to take the seeds that people like Monsanto develop and put it in the ground and grow it in thousands of acres to feed the world. So for algae, being a photosynthetic crop, we have to look at it from a farming perspective. And I feel good as an evangelist for that.

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