Dec
13
It’s Official, Algae For Oil Gets the Big Investment Money
December 13, 2007 | 3 Comments
Late yesterday CST, Royal Dutch Shell and HR Biopetroleum announced a joint venture called Cellana for production of oil-bearing algae. Construction of the pilot facility is commencing immediately in an area already populated by pharmaceutical and nutritional algae producers. The joint venture will initially mutually support and be supported by academic researchers from the University of Hawaii, University of Southern Mississippi, and Dalhousie University of Nova Scotia, Canada.
Shell already enjoys a worldwide reputation as the largest distributor of biofuels. In the press release the writer mentions more than once that the attraction to Shell is that algae isn’t expected to be displacing production of food crops for biofuels. The investment, as Shell is disclosed to be the majority shareholder, is for production of test quantities of algae oil coming from indigenous strains so to remove any environmental risks. A primary goal is for the plant to discover what strains are best suited for the local conditions and that produce the highest yield and the most vegetable oil.
The Shell EVP, Graeme Sweeny is quoted saying “This demonstration will be an important test of the technology and critically of commercial viability.” Shell’s Chief Science Officer Mark Huntley said, “HR Biopetroleum’s proven technology provides a solid platform for commercial development and potential deployment worldwide.”
HR Biopetroleum has a few years of experience behind its pond cultivation technique. The techniques developed seem to overcome the contamination problems of open pond systems, most likely a hermetic seal to keep foreign material out of the growth medium. The development of the current art of HR Biopetroleum has been funded in part by the U.S. National Defense Center of Excellence in Ocean Sciences, The U.S. Department of Energy and the University of Hawaii.
To refresh, algae is a fast growing water borne organism of ancient origins. Algae are being grown in cultures for pharmaceutical production, the production of nutritional products and other uses. The culturing of algae by strains that have very high vegetable oil content is a target for the renewable fuels industry as the production per area unit is the highest of the bio based fuel field. In some examples algae can out produce common land based crops by as much as 15 fold per land area unit. Algae already out produces rape, palm, soybean and jatropha on an area basis. The challenge is the commercial scaling, strain selection for processes that can be run continuously. Algae are also being researched for genetic modification to increase the productivity, tolerate contaminates, and resist invasion by competitive species.
This announcement is a milestone for algae as a biofuel. Algae offer an oil product that is very easily made into fuels that can replace the more energy dense fuels such as diesel, jet and kerosene.
The unanswered questions are, will the facility use seawater or fresh water, what other inputs are required beyond the water, algae strain, CO2, and sunlight? How adaptable is the oil product, can it be made into other fuels, such as a gasoline replacement? Is this particular plant product expected to need the glycerin to be removed and will there be an alcohol component to the end product? While I’m not seeking a pure petroleum free result, a product that uses a unit of petroleum to yield a measure of algae sourced biofuel is an important metric.
I congratulate Shell for the innovative attitude and the deep future strategy that algae require. The free world’s oil companies are often the scapegoat for a host of problems real and imagined. These kinds of investments, which on the scale of oil discovery, extraction and processing are so small, offer proof that some of “Big Oil” is seeing a future as supplying energy and fuel as the business and whatever turns out to be the best products to serve mankind as the process. In the coming years its going to get tougher to invest in oil as biofuels get further along and technology, scaling up and innovation drive down investment costs and running expenses.
I wish to extend my highest accolades to HR Biopetroleum. The business model for the research, design and implementation have finally attracted serious money, widespread academic interest and a concept that holds the local environment so safely. You well deserve the leadership. Lets see if you can hold on to it.
For all of us watching this is an important point in biofuels. Algae may well be the source for high-density fuels in the near term. But other technologies will be racing to displace any form of combustion and the improvements likely to come into the consumption side will be affecting the total market even as it grows worldwide.
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