Turn and Face the Strange: The New Algae Makes a Bowiesque Pivot into New Markets

by Jim Lane (Biofuels Digest) ... But the RE in algae these days has been, more or less, REposition. Possibly REthink. Certainly not much REfinance, or REcommit to the original targets. The algae business models of 2009 burst up in a bloom, and busted when OPEC took the oxygen out of the water or when the costs just stubbornly refused to go much below $10 per gallon for algae oil.

What the ventures showed in the labs, however, struggled to be verified in the field. Capital costs became the bottleneck for ventures pursuing closed photobioreactor systems, while operating costs and low yields generally bedeviled those pursuing open pond systems.

Algae, yes. Algae that provides solutions to real-world problems, certainly. Affordable algae for every market including the Nirvana of Fuels, not yet.

But DENSO has been on the move. Last summer, the company announced that it would build a large 20,000 square meter test facility for the culture of Pseudochoricystis ellipsoidea, an oil-producing microalga patented by DENSO that is used to help reduce CO2 emissions. The new facility located in Amakusa, Kumamoto, Japan, will be used to perform verification tests needed to establish large-scale microalga cultivation technologies required to improve biofuel production efficiency. The facility was scheduled to start operations in April, 2016 — but there has not been a corresponding “we’re open” update yet from the company. To date, DENSO has been working at 300 square meter scale at its Zenmyo Plant site in Japan.

It’s been a common refuge for algae ventures, focusing on niche products such as omega-3 fatty acids or astaxanthin. There, the product prices can support relatively high-level algae costs. Sapphire Energy has refocused there, and Heliae too.

Algenol has retreated, with the departure of its visionary CEO and founder Paul Woods, to stealth mode. And there’s been investor panic. It’s mot clear whether the long-standing target of $1.00 per gallon (operating cost) ethanol was unachievable in an investor-friendly time frame, or whether the regulatory complexities of entering the fuels market and low oil prices dimmed the enthusiasm. They’ve been in search of a near-term market to generate some cash flow.

Meanwhile, Joule Unlimited merged with Red Rock Biofuels — which has its own fuels-based business model involving gasification and conversion of gases to liquid fuels, with some brand-name technology partners, a USDA loan guarantee, and brand-name off-takers too — and getting that venture financed has been Joule’s primary mission of late, pushing its fuel-creating cyanobacteria into the background, for now.

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And then, there’s spirulina. ... As Earthrise advises, “Ecologically grown Spirulina contains one of the highest densities of protein found in any food, offers more beta-carotene than carrots, more iron than raw spinach, and more calcium than milk on gram per gram basis. Whenever possible, replacing other foods in your diet with life-enhancing micro-algae is good for you and the health of our planet.”

Another product that has star power is astaxanthin. It’s a dark red carotenoid found in nature primarily in aquatic animals such as salmon, trout, krill, shrimp, crayfish, and crustaceans.

Hy-Tek Bio has been developing technology using “a unique strain of algae (HTB-1) – isolated from thousands of strains – to absorb up to 100 percent of the GHG emissions from flue gases produced in industrial manufacturing and power generation.

Clearas has been active in this field. It’s Advanced Biological Nutrient Recovery system is described as “a controlled and continuous flow environment that leverages a facility’s existing microbiology – algae and other biological organisms – to recover excess phosphorous, nitrogen and other high-profile contaminants in wastewater. An extension of the activated sludge process, the ABNR system is a bolt-on and modular solution for existing wastewater treatment infrastructure. Clearas has a current project at Grand Lake Saint Mary’s, in Mercer County, Ohio, focused on nutrient removal in Grand Lake.

For those who could advance past nutraceutical economics but could make it as far as fuels, the advanced nutrition markets became popular. There was the human side — where algal oils could provide a healthy alternative for food ingredients.

The financial world simply bailed on algae biofuels. Policy has something to do with that — or the lack of the stability thereof. But it has more to do with oil prices, really.

Now, the narrative has shifted, because the fracker is the swing producer, not the farmer. That’s why some thoughtful advanced technologists, seeing that carbon regimes are the way forward for environmentally-friendly fuels, are making overtures again to the environmental community. Which itself parted with biofuels over food vs fuel and land use disputes that, ultimately, were more about 1G technologies than 4G.

With realignment on carbon, may things are possible, But until then, it’s going to be a steady diet of REfocus and REposition for the wonder-workers of the algae industry, and a whole lot of omega-3s and nutrition to come.