These guys are doing itFirst generation biofuels, like corn ethanol, haven't fulfilled their promise of displacing fossil fuels in a green, carbon neutral way. It's because they require a lot of energy to produce and use food crops, competing with people and animals for that supply, driving prices up and putting pressure on farmland. That's where second and third generation biofuels come in; they use more efficient processes that make them carbon-neutral or, ideally, carbon-negative, and they're made from feedstocks like waste biomass and algae, removing the pressure on food supplies. That's the theory, but in practice there are big challenges that need to be surmounted to make it all work, as we've seen over the past few years, which have been rough on the industry. Many next-gen biofuel startups appeared on the scene and few of them have shown commercial viability (yet).
Algae Systems might be an exception to the rule, with an interesting production process and some heavy-weight backing that gives it a much higher chance than others of crossing the finish line. CEO Matt Atwood is both an entrepreneur and a chemist. John Perry Barlow is vice president (Yes! JPB from Grateful Dead fame and the co-founder of the Electronic Frontier Foundation (EFF), an organization that should be particularly dear to anyone who likes a free and open internet). Finally, the financial muscle comes in good part from billionaire Edgar Bronfman Jr. Not a bad group if you want to make things happen!
The five years old Nevada-based startup is using an interesting approach that was first looked at by NASA. The idea is to use municipal waste water to grow algae in special bags that are anchored offshore where they get plenty of sun and where the waves keep everything well mixed. Once the algae has grown enough, it is harvested, and the now clean water can then be used by cities and farms or return back to the sea. The algae goes through a special "hydrothermal liquefaction" process that, with temperatures of about 550 degrees Fahrenheit, turn it into a kind of bio-crude oil. Another useful byproduct is fertilizer, from the part of the algae that isn't turned into fuel. Nice 3-for-1!
This algae-based crude can then be further refined into diesel, gasoline, or even - promisingly - into jet fuel. I'm particularly excited about the latter because while we have a clear path to electrify a lot of ground transportation, air travel will use liquid fuels for the foreseeable future, so if we can make carbon neutral or carbon negative fuel for planes, this would be a great step forward!
To show that this isn't just theory, but that it works in practice, Algae System has built a pilot plant in Daphne, Alabama. This operation isn't just neutral on the environment, it actually consumes pollutants like phosphorus and nitrogen, leaving cleaner water behind. The demo plant treats about 40,000 gallons of waste water per acre per day and produces about 3,000 gallons of fuel per acre per year. This is just a start and Algae Systems expects productivity to improve.
Here's a funny anecdote, as reported by Alabama.com: "After nine years at the helm of [Daphne municipal water and sewage utility], Rob McElroy is stepping down as general manager to take a position with Algae Systems, a company that's found success with an environmentally friendly wastewater-treatment and biofuel-producing pilot project on the city's bayfront." Apparently he was so impressed working with the pilot project that he decided he'd rather work with them directly!
The next step is to build a commercial-scale plant, which would cost between $80-100 million, but before they get there, they need to raise some more money.