At What Cost? An Algae Oil Price Report

Exxon Mobil has been running a prime time television advertisement, featuring Jon Weissman, a company scientist and algae researcher. He glorifies the beauty of algae and its potential as an energy source while shimmering tubes of red, yellow and green algae oil appear floating in a heavenly white field. But algae’s potential as a fuel feedstock potential boils down to price-and it’s a secretive issue.

Technological advances in the production of algal biomass combined with hundreds of millions of dollars invested this year in research and production have brought the industry closer to commercialization and cost-efficient production of algal biomass, says Minnesota’ s Algal Biomass association. When its leader, Mary Rosenthal, was asked at the 2010 National Biodiesel Conference, “What’s the price of algae oil today?” however, her answer was “I can’t speculate on that.” Most of the companies that New Diesel Magazine spoke with wouldn’t give a straight answer to the same question either.

One company that would, Renewed World Energies of South Carolina, is pursuing several interesting pathways to reduce the cost of algae oil refining. We can make algae oil for about $15 per gallon today,” says Rick Armstrong, CEO of RWE, which displayed a working prototype at the Algae Biomass Convention in San Diego, US.

RWE’s photobioreactor consists of vertical ‘ponds’ or panels, an automated process control system, and harvesting equipment. The panels are designed to allow maximum light availability for algal growth. “The system is controlled by proprietary software and hardware configuration with a touch screen providing diagnostics and control for an operator,” RWE says. “The instrumentation, valves, algorithms, and control parameters were designed specifically for the photobioreactor.”

Phillip Pienkos of Colorado’s National Renewable Energy Laboratory told New Diesel Magazine that NREL has actually been researching the cost of algae oil and said that survey answers to production costs have ranged widely. Some companies that make algae oil for neutraceutical and other human consumption applications use food grade equipment and their cost to make a gallon of fuel from algae oil would be astronomical. “We decided not to include that data because the procedures for making fuel and chemicals are so much different,” Mr. Pienkos says. “and we also saw results in the 2 per gallon range which was very low. The overwhelming result of our studies shows between $10 per gallon and 30 per gallon.”

NREL’s algae oil price study will be completed shortly and published in a peer reviewed scientific journal most likely this fall, Mr. Pienkos said.

Capital, energy and nutrients are needed for growing algae and represent the primary expenses asociated with algae oil production. Oil extraction requires energy consumption, and one of the problems associated with reducing algae oil costs, but when it comes to producing fuel, RWE is experimenting with a pathway to skip this step, wchih involves the gasification of harvested biomass en toto.RWE’s photobioreactor consists of vertical ‘ponds’ or panels approximately 8 cm thick and 120 cm tall, an automated process control system, and harvesting equipment. The panels are designed to allow maximum light availability for algal growth. Water, nutrients and gases are circulated through the panels. The reactor can make use of CO2 and NOX from flue gases, or use compressed gases. Algae ready for harvesting first passes through a pre-screening process which reduces the water content by 20 percent. A final screening removes excess water before the algae is processed into biofuels using traditional technology.

Solazyme, the California algae company that is producing algae also would not is close the current price of their process per gallon, but Genet Garamendi, press liaison said that they were 12-24 months away from being in the price range to make fuel production, economically feasible. Solazyme has made thousands of gallons of algae fuel for a U.S. Navy contract, the company told New Diesel Magazine. “This was fuel made for military specifications, so we can produce quality fuel from algae at present,” Ms. Garamendi told New Diesel Magazine.

Solazyme emphasized working “down the curve” to open up more applications that the oil could be used as a source to manufacture. Pharmaceutical, neutraceutical and food grade applications are more economical at the present than fuel production. “Fuel is toward the bottom of that curve,” Ms. Garamendi says. “But I assure you that we are on track to be producing algae oil for fuel production within the next 12 to 24 months.”

The sources in this article are the result of telephone interviews performed by New Diesel Magazine Editor Nicholas Zeman