Algae Business by Riggs Eckelberry Algae: The Cornerstone Feedstock

Algae: The Cornerstone Feedstock

January 18, 2012
AlgaeIndustryMagazine.com

If only there were enough algae to meet the demand. Algae is highly productive, soaks up toxins and CO2, and can be grown without impacting food or fresh water supplies. And it exactly replaces petroleum, because petroleum is mostly old algae. For these reasons, strategic buyers like the U.S. Department of Defense favor algae for the long term.

But algae production ramp-up is only just beginning; it will take years to build capacity and bring down production costs.

The situation has caused many producers to focus on “higher value” products such as nutritionals, further delaying scale-up.

An elegant solution

Bio-engineer and entrepreneurial biofuel visionary Larry Sirmans proposes an elegant solution: to use algae as a cornerstone ingredient for other, much cheaper waste feedstocks. Algae’s high BTU value and chemical composition can improve average energy content when mixed with other biomass fractions. Its petroleum-like structure may also help “format” other feedstocks.

“Biofuel visionary Larry Sirmans proposes an elegant solution: to use algae as a cornerstone ingredient for other, much cheaper waste feedstocks.”Larry plans to develop strategically-located blending refineries that will initially supply the US Military “drop-in” biofuels.  As a US Navy Veteran who was disabled in the service, and as a long time biofuel and alternative energy industry professional, Larry Sirmans enjoys a unique perspective on the U.S. military’s ambitious biofuel scale-up.  “The US Navy is deploying the Great Green Fleet,” he says.  “To be able to operate effectively around the world in different theaters, the military needs relatively local and secure fuel supply availability”.

To help make this happen, Larry has transitioned from his role as Technical Director at Australia’s MBD Energy Ltd., a major player in algae for carbon capture, to launch Future Energy Solutions, Inc. (FES – and its Australian sister company,  AES Pty Ltd.).

FES has initial funding commitments from the renewable energy and sustainability investment group Energime to help develop this new generation of biorefineries.  Additionally, FES and AES are attracting interest from various governments and industrial organizations.  We at OriginOil are proud to also be partners in his new venture.

I asked Larry to describe his newest venture. Here’s the story, in his words.

Biofuel visionary Larry Sirmans proposes an elegant solution for algae scaleup…

A Global Supply System

The military wants to encourage the development of a strategic biofuels production capacity that can feed the military supply system. This will be part of newer and smarter military force of the future that is not so dependent upon conventional fossil fuels. To encourage this industry to develop, the US military is using its relatively large consumption demand to influence change and create the incentive for industry to scale up biomass feed stocks for actual fuel production.

As Defense has clearly stated, there’s more than financial cost at stake in their biofuels commitment. Everything that the military operates for transport runs on fossil fuels: planes, ships, armored vehicles, et cetera.  Outside of the nuclear fleet, the military is powered by fossil fuel.

Our military has learned from Iraq and Afghanistan that we can’t afford to be hostage to foreign oil. Costs can end up well over three hundred dollars a gallon, when you count everything.  And it’s said we lose one soldier or marine for every fifty fuel convoys to bombs and ambushes in Afghanistan.

The bottom line is operational effectiveness to protect human life and ultimately the nation. So, the Department of Defense is urgently encouraging a national biomass industry for drop-in transportation fuels.

“Our military has learned from Iraq and Afghanistan that we can’t afford to be hostage to foreign oil. Costs can end up well over three hundred dollars a gallon, when you count everything.”

Why drop-in fuels?

Biofuels have to be to be drop-in (that is, identical to petroleum based fuels), so we don’t have to retrofit delivery infrastructure, storage tanks, engines and existing military platforms. Algae have proved an ideal biomass source for drop-in fuels, which is why it has featured so prominently in early tests.

The military wants a fifty-fifty biofuel-petroleum mix, but the mixture must meet defined standards to run existing engines without problems.

Eventually, like all customers, the military needs prices in line with petroleum. Its commitment to developing national biofuel security assumes that scale will cause the cost to come down to petroleum levels.

One solution while algae is still ramping up: blend it with less expensive, lower BTU content feedstocks, lowering total biofuel production costs.

Driving scale through the military

At approximately 5 billion gallons a year, the Department of Defense is the largest single petroleum consumer in the world.

For producers and growers, how the military buys is as important as how much it buys. Defense procurement contracts are multi-year, specified volumes, at pre-established prices. They enable project finance by assuring long-range, predictable revenues.

Right now, the Defense Logistics Agency (DLA) is committed to issuing five-year supplier contracts, known as “off-takes”. That may change to ten-year contracts.

Refiners will have something literally to take to the bank: multi-year off-take contracts. These refiners, in turn, can make multi-year commitments to feedstock producers, who can bank on those too, especially if they adopt systems and processes specified by the refineries.

Blending standards are crucial

Diverse feedstocks must be readily mixable at the refinery.

Right now, the Idaho National Laboratory of the U.S. Department of Energy (DOE) is researching and certifying various feedstock blends. We can expect feedstock combinations in which algae may transform higher-volume, lower-cost ingredients into quality, cost-effective blended fuels.

New standards will govern how feedstocks blend into common biocrude, ready for refining into drop-in fuels. They will cover energy content, density, and conversion, and BTU values per ton or per gallon.

Types of blendable feedstocks

Refinery feedstocks will vary by regional availabilities.

New England and the Northwest can supply a lot of wood chips or cellulose. The Great Plains produce corn stover (stalks and leaves). Miscanthus (a grass) may become big in some western areas, while the Southwest’s sun and arid lands will encourage high-volume algae.

Wastewater treatment plants can produce high-volume algae while using it to remove nitrates from their water. They can also contribute fuel made from organic waste. Municipal waste collection facilities can contribute plastics and other convertible waste.

Cheaper feedstocks such as wood chips can provide tonnage volume. Recycled rubber tires can be added for higher BTU content.  When blending with higher-yield feedstocks such as waste palm oil or camelina, algae can enhance both energy yield and operational quality.

“At approximately 5 billion gallons a year, the Department of Defense is the largest single petroleum consumer in the world.” The role Future Energy Systems will play

A number of American and Australian players are positioned to build regional biorefineries to meet projected demand.

FES will be the project developer, project manager, process designer and eventually, the operator of these refinery projects. To make these projects bankable to investors and attractive to the military, FES intends to carry out reliable and rigorous bankable feasibility studies in key geographic regions that combine strategic military fuel demand with biomass feedstock availability to justify newer generation refinery development.

The studies will identify regionally available feedstock supplies that can drive a refinery’s volume of fuel production. Based on that data, we intend to model refineries’ capital and operational expenditures to determine commercial viability. The DLA won’t issue a longterm purchase contract unless it is assured that a commercial venture is sound. In turn the investability of a project will be determined by the government procurement contract.

Remember: This is strategic fuel supply. The DLA needs to know that a refinery’s long-term viability is assured.

Global deployment

America deploys military forces throughout the world, and they all need fuel. Our military needs infrastructure in key areas around the globe to supply plane, ships and ground transportation abroad as it does back home.

Then there are our allies, who want biofuels for their own national security. I can envision biorefineries developed first by historically friendly nations already on the development path, such as Australia; but the ultimate potential market is not just military fuel demand. The heavy transportation and aviation industry will need biofuels as well. Eventually, refineries of biomass with an algae component will come to South America, Africa and elsewhere.

These other locations such as the emerging Australian algae industry, have viable feedstocks too. And many of them have the same right conditions of sunlight, non-arable land, and demands for carbon capture and water treatment we have as in America.

By its actions today, the U.S. Military is planting the seed for an international biorefining infrastructure that will eventually serve the world.

In all, classic Larry Sirmans: a blend of vision and practical engineering from a guy who has built some pretty big biofuel, infrastructure and heavy industry  projects in his time.

We wish Larry the best of luck in his new venture, which promises well to help jump-start global algae and biomass biofuels production at a scale that will really make a difference.

Go to HOME Page

Copyright ©2010-2011 AlgaeIndustryMagazine.com. All rights reserved. Permission granted to reprint this article in its entirety. Must include copyright statement and live hyperlinks. Contact editorial@algaeindustrymagazine.com. A.I.M. accepts unsolicited manuscripts for consideration, and takes no responsibility for the validity of claims made in submitted editorial.

Visit the A.I.M. Archives

AIM interview ArchivesAlgae 101 ArchivesHot Products ArchivesInnovations ArchivesMoney ArchivesProcess ArchivesResearch ArchivesScale Up ArchivesThe Buzz Archives

FREE Algae News & Updates

Sign up to receive breaking A.I.M. updates! 

From The A.I.M. Archives

— Refresh Page for More Choices
Algae.Tec Ltd has received its first purchase order from Reliance Industrial Investments and Holdings Limited (RIIHL), in connection with the arrangements announced on Ja...
Valensa International and Contract Biotics have announced that Contract Biotics has started construction of an additional six acres of algae production units at the compa...
Algatechnologies (“Algatech”), Israel, has announced a more than 100% expansion of its production capacity of AstaPure® brand natural astaxanthin. This doubling of capaci...
As the number of photobioreactors in an algae growing operation increases, there is a need for both autonomous control and monitoring of individual PBRs, as well as centr...
“Proterro has reached its Q1 sugar-production pilot milestones,” CEO Kef Kasdin reported at the recent Advanced Biofuels Leadership Conference, in Washington, D.C. “In fo...
A series of articles by Stephen Mayfield and the UCSD Laboratory deserve recognition for their articles on algae-based medicines for malaria and cancer. Mayfield and his ...
Santa Fe Community College has been awarded a $50,000, SEED Infrastructure Grant from the Experimental Program to Stimulate Competitive Research (EPSCoR), for commercial ...
Although the use of whole microalgae in animal diets has long been studied, the 
de-fatted biomass of microalgal species, derived from biofuel production research, has on...
By sending algae into space, a U.S. Department of Agriculture (USDA) scientist and his team will be able to study some of the key mechanisms that control plant growth and...
In Phys.Org, Yu Yonehara notes the breakthrough research from the Tokyo Institute of Technology on the connection between early marine algae and the development of terres...
The Algae Biomass Organization (ABO) released the following statement calling on the EPA to include Carbon Capture and Utilization strategies in rules proposed June 2, 20...
A new, outdoor system at the University of Dayton Research Institute has been producing a high volume of algae since its installation in the summer of 2013, even through ...
Steven Mufson reports for the Washington Post that Algenol Biofuels estimates hackers have attempted to break into its computers 39 million times in four months this year...
Phys.Org reports that scientists Jolanda Verspagen and Jef Huisman of the University of Amsterdam, The Netherlands have concluded that rising CO2 concentrations in the at...
Using a combination of satellite imagery and laboratory experiments, researchers have evidence showing that viruses infecting those algae are driving the life-and-death d...
Oregon State University researchers are combining diatoms, a type of single-celled photosynthetic algae, with nanoparticles to create a sensor capable of detecting minisc...
Chase Ezell writes in Earth911.com about the irony of Algenol’s biggest friction source on the way to marketing their carbon reducing algal-based ethanol being — the EPA ...
SCHOTT AG, of Mitterteich, Germany, and Algatechnologies Ltd. (Algatech), based at Israel’s Kibbutz Ketura, have signed an R&D agreement to strengthen their partnersh...