Advanced BioFuels USA

by Jim Lane (Biofuels Digest)  Sapphire’s Jamie Levine, Matrix Genetics’ Margaret McCormick, Algal Scientific’s Geoff Horst, Heliae’s Len Smith and USCD’s Steve Mayfield reflect on the commercial progress of algae.  There is the dream of algae. All that photosynthetic productivity, all those products that algae can make, all those crushing needs that our society has for more, more, more — fuels, feed, food, pharmaceuticals, nutritionals, and materials.

The dream of algae is most intently dreamed in the world of energy, because the pangs of energy security or lack thereof are felt by so many societies that have CO2 and water to spare, and disabled land to build upon. And where energy security is not a concern, there is the thump-thump-thump of greenhouse gas emissions and climate change, and algae can provide fuels that have 70% lower greenhouse gas emissions. But even climate skeptics can get excited about bioeconomy jobs for rural economies, where the prospect of algae fuels brings with it the promise of economic growth and diversification for small towns.

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For a lack of capital, a need to do business soon with a winning first product, or simply a yield wall they have not been able to overcome, there’s quite a pile-up of algae companies somewhere past perfumery and short of animal feed. Creating a log-jam in markets such as astaxanthin that at times feels as if the Rolling Stones have announced the opening of ticket sales for a last farewell to rock-and-roll tour and the whole world has turned out to get a seat.

The Three-Word Directive

“Now, Now, NOW.” You can hear the whump of the hand slap on the table as the venture-backers give their three-word summary. That is, the expected timing for their companies to get out of the Land of Pre-Revenue and into the Land of Massive-profits-that-help-me-raise-my-next-LP-fund.

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Sapphire is typical. They are Sapphire Energy for now, but the name is clearly going to have to change. They’re now aimed squarely at “commencing omega 3/7 oil sales in 2017 from our Columbus, New Mexico plant, and then omega-3 EPAs, which are sustainable and non-fish in origin.”

“For now, we are focused on health & nutrition,” said Levine, “and later as we move down the cost curve there are opportunities with high-value protein, aquaculture feeds, and animal feed. And we’ll keep an eye on fuels.”

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Heliae’s Len Smith agreed, though for Heliae there was less confidence about hitting the cost curve improvements needed to compete with soymeal, or even fish meal, any time soon.

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“This sector has challenges, cultivation, contamination, expensive processing, nascent science, and regulatory roadblocks. We are behind yeast and e.coli by decades and thousands of years behind farming. But not everything is bleak. We believe our mixotrophic technology has real potential, we have exceeded our nameplate capacity repeatedly over the past year, and we are selling product to commercial customers, But we all still need radical breakthroughs, and to compete with the price of soy or of fishmeal there is a long way to go.”

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“We have to stop kowtowing to fear-mongerers,” she (Matrix Genetics CEO, Margaret McCormick) said of the GMO debate. “Every time we step back to avoid a confrontation we step back for technology industries and science around the globe. We have to ask people, why are you going back to discredited studies that have been driven out of the scientific community? GM’s are regulated, we have to prove they are safe, which is more than you can say for a lot of products.”

She wasn’t having any of that “ we just make what our customers want” chat. None of that “if you want non-GMO, here’s the price and we’ll make it for you”.  None of that at all.

She took square aim at what some have noted as a big global game being played with definitions and regulations around the globe.“100% of French cheese is GMO,,” said McCormick. “it is not an issue for regulators because the Europeans redefined the threshold for presence of genetical modification in order to be “GMO” and re-set the threshold above that for French cheese. We need educational strategies and marketing strategies on the GMO issue. It’s something beyond what a small company can do, perhaps it’s something for the Algae Foundation, because it begins with K-12 and colleges embracing technology and science. If I hear another soccer mom on the dangers of GMOs, I don’t know what I’ll do. I mean, Whole Foods is laughing all the way to the bank. “Organic” designation is not is not a safety tool, it is a marketing tool.”

Mayfield chimed in. “I mean, it is almost a joke,” he said, “with 23,000 people dying because of rising antibiotic resistance, to use one example, and not a person worldwide has become demonstrably sick because of GMO, that we are even talking about this.”

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Do customers know what they want, really? As Henry Ford said, “I never asked my customers what they wanted because if I had, they would have told me they wanted a faster horse.”   READ MORE and MORE / MORE / MORE (Algae Biomass Organization) and MORE (Algae Industry Magazine)