Algae Business by Riggs Eckelberry Algae’s Killer App

Algae’s Killer App

April 13, 2011
AlgaeIndustryMagazine.com

Editor’s note: We are very pleased to present our new monthly columnist, Riggs Eckelberry, who many of you know as the CEO, Chairman and lead entrepreneur behind OriginOil. Riggs has an extensive background in business development over several industries, and has an especially keen eye for how the various parts of the algal industry relate to each other and can be optimized. Beginning with this installment, Riggs will focus on key business areas in the development of our industry, drawing on both direct experience and his astute observations. Welcome, Riggs!

“Algae production has the potential to transform things that we currently think of as liabilities into valuable assets.”Where in the world is the best place for a new algae facility? If you answered, “wherever there’s abundant sunlight for photosynthesis” you’re on the right track. Beyond that, I’d like to offer what I think is an even better answer—one that underpins the economics of algae production.

The best place for a commercial-scale algae facility is next to a power plant that emits large amounts of carbon dioxide. The very best place is next to a power plant that is also near some sort of wastewater treatment facility that has access to fertilizer run-off water.

That’s in theory. In practice, it’s all driven by politics.

The Primary Driver: Political Pressure

Commercially viable algae production depends on one key factor: the political environment for carbon and nitrate reduction. Local and regional government support is good, but at OriginOil we have learned that a strong national government policy makes all the difference.

So—where political pressure exists to reduce emissions and runoff, power utilities and wastewater treatment companies will eagerly contribute CO2 and nutrient-rich water to your algae facility.

In fact, they should pay well: the fossil fuel industry needs to reduce its CO2 output to claim “cleaner” fuels; and wastewater treatment plants pay dearly for the “tertiary” stage of de-nitrification.

Liabilities into Assets

By utilizing waste products from one industry as feedstock for another, we are killing two birds with one stone. Algae production has the potential to transform things that we currently think of as liabilities into valuable assets.

Algae can help on three levels:

  1. Algae capture the carbon dioxide that would otherwise go into the atmosphere, converting it into biomass through photosynthesis. As we all know, algae can replace petroleum, displacing fossil-based carbon—a huge win for energy security and our environment.
  2. Algae will absorb nitrogen and phosphorus directly from an effluent stream. Algae are already being used to clean treated sewage in a demonstration program, which I will describe in a moment.
  3. Once you have reduced greenhouse gas emissions and cleaned up polluted water, the algae products are themselves environmentally beneficial.

In the future, I believe these “combo” facilities will be the most economically attractive algae projects and also the easiest for stakeholders to support.

The Challenge of Scale

The most important challenge is scale. In an ideal situation, water, nutrients and CO2 will be readily available, meaning that solar energy will be the limiting factor (at least in biological terms).

Sunlight is directly related to surface area. That’s why we measure it as watts/m2. A quick look at the emissions from 1,000 megawatt power plant, and you realize we’re talking about a very, very large algae farm.

For now, we are still focused on maximizing the efficiency of key technology components, and scaling up systems to demonstration levels. That’s our goal in working with our pilot customers, such as Australia’s MBD Energy.

Wastewater treatment is first and foremost about public health, and these operators move very slowly and conservatively. Algae has been their historical enemy.

Wastewater: a Case Study

Algae’s ability to clean wastewater is being studied at the Rochester Institute of Technology. The researchers say the results are great so far.

“Algae will take out all the ammonia—99 percent—88 percent of the nitrate and 99 percent of the phosphate from the wastewater,” said Jeff Lodge, associate professor of biological sciences at RIT. “All those nutrients you worry about dumping into the receiving water. In three to five days, pathogens are gone. We’ve got data to show that the coliform counts are dramatically reduced below the level that’s allowed to go out into Lake Ontario.”

Lodge said algae is “doubly green” because it cleans water and provides a biofuel. The last, and winning ingredient is the CO2.

Inside the wastewater plant, there’s often a Waste To Energy (WTE) system. That’s a handy source of CO2 in addition to the nutrients.

Even if you get only one or the other, it can still improve the economics of algae projects enough to get them fast-tracked. Again, it all depends on the incentives to clean-up pollution problems.

If there’s a lot of pressure for environmental remediation, the project’s algae-to-oil and biomass output may actually become a secondary driver for the project.

The Problem with Wastewater

When we first modeled algae production, we had found unexpected costs in handling all that water (at harvesting time, there’s a 1000 to 1 ratio of water to algae!)

Water handling? No problem in a wastewater treatment plant! Plus, the zoning is already taken care of, and there are the plentiful nutrients and, usually, the CO2.

Wastewater is such a great synergy for industrialized algae that it was our first partnership focus at OriginOil.

But we needed early adopters, and these are not early adopters. Wastewater treatment is first and foremost about public health, so these operators move very slowly and conservatively. Algae has been their historical enemy; think we’re going to change that overnight?

So, wastewater treatment plants are a good idea, but will be slow coming online as part of the algae equation.

Meanwhile, the go-go environment for algae, the business that will get us scaled up to the massive footprint that we need to start making a difference with our products, is bio-carbon capture – with the added bonus of converting valuable oil-rich biomass into profitable revenue.

...for algae, the business that will  get us scaled up to  the massive footprint that we need to start making a difference with our products, is bio-carbon capture.

Carbon Capture is King

OriginOil is working with Australia’s MBD Energy, a public unlisted company part funded by the mining giant, Anglo American, to use algae for carbon capture. They contracted with three major Australian power plants to reduce their CO2 emissions. (We’re supplying them with our advanced oil extraction technology.)

Two tons of CO2 are converted into one ton of algae, plus one ton of oxygen—that’s what the power plants like about algae. The huge commercial bonus to MBD, however, will be the large-scale low cost production of biofuel, oil for plastics and nutritional feed for farm animals.

For a growing number of coal and gas fired power station operators, algae is a vastly faster, cheaper and more visible way to reduce their carbon emissions than, say, burying the CO2 underground.

On top of it, there is no public health concern. It’s a completely safe process that will only help reduce emissions—and in the process, create beneficial fuels, chemicals and nutritional products.

In the high tech world, we always recognized that a new industry didn’t take off until it had its “Killer App”.

Carbon capture is Algae’s Killer App.

Riggs Eckelberry is Chairman and CEO of OriginOil, a publicly-traded technology firm in the algae-to-oil sector, which he co-founded in 2007. He transitioned into clean technology from a career in high tech, having previously helped take Los Angeles-based CyberDefender public as its president and chief operating officer. Earlier, he was a key member of the team that developed YellowPages.com, resulting in its sale for $100 million; and he contributed to numerous other company successes in a lengthy career during and after the dot-com era. Mr. Eckelberry believes that we must learn from the lessons of high tech to achieve sustainable development in clean tech. In particular, he advocates for a highly-distributed energy model that will eventually make every CO2 source an energy provider. In January of 2011, Riggs Eckelberry was named to the Advisory Board of the National Algae Association.

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