Sunday, February 28, 2010

Have you tried putting algae in your Mercedes’ engine?

Solazyme CEO Jonathan Wolfson thinks that research into bio-fuels has finally approached a level that makes production scalable to meet mass-market demand.

by Poornima Weerasekara

A few years ago no one would have used the words Merceds and Algae in the same sentence. But now Solazyme, Inc., a South San Francisco, based biotechnology company has developed an algae oil-based biodiesel which it has road tested on a Mercedes Benz C320.
“We have Road tested algae fuels unmixed in unaltered engines for over 10,000 km. The oils produced by Solazyme’s algae would be a full replacement for petroleum-based fuel, not an additive,” Wolfson said, at the recently concluded Stanford e-Week seminar that focused on the challenges of commercializing bio-fuels.

The department of Defense in Sept. 2009 also switched to using jet fuel made entirely of algae derivative supplied by Solazyme.
Earlier the company had its research and development funded by the Navy in exchange for 20,000 gallons of fuel for its ships.
“The department of defense cares about bio-fuels because it gives energy security. The Environmental protection agency wants greater progress in this area because it’s a source of clean energy. There is a lot of momentum in the bio-fuel sector,” he said.

According to Wolfson, the biggest challenge facing bio-fuel companies is finding a production process that makes the “cost per unit” competitive with conventional oil.

“Can u do it at the right cost? Our target is to design a process that converts a pound of bio-feed stock to oil at 0.25 – 0.50 cents per pound. That’s the key to making production scalable,” he said.

Algae bio fuels reduce carbon footprint by 80-90% vs. ultra low sulphur petroleum source – source: life cycle association.

Byproducts of algae based oil production can also be converted into consumer and industrial chemicals, including food additives and cosmetics,” he added.

Taking a greenleap forward
But Solazyme didn’t stumble on the right production mantra for several years.
“When we started we were making a lot of algae in these bio-reactors. But this path was not commercializable in the near future,” Wolfson said. “Then we found this angel investor – who had launched several bio fuel companies- that had failed. He said if you guys succeed you would disintermediate conventional oil.”

“That is when we realized that conventional oil companies owned over a $1 trillion worth of distribution infrastructure. We realized that if we wanted to make it big we needed to leverage on this infrastructure. We threw out our first production platform and from then on the only thing we care about was SCALE,” he added.

Solazyme entered into a biodiesel feedstock development and testing agreement with Chevron Technology Ventures in late 2008. Industrial fermentation – the same tech used to make beer or wine – is at the heart of their new proprietary technique to turn algae into oil.

Why algae?

“Algae are single cell organisms that have evolved to compete in very harsh environments and as a result have evolved incredibly strong pathways to store oil,” Wolfson said. “It has the highest energy density compared to other plants used to make bio-fuels like Canola or Soy. Algae production processes are yielding 10 times more oil per acre than soybeans,” he added.

The future ain’t slimy

“When we started the company – the weren’t many algae fuel companies. Now there are over a hundred of them,” Wolfson said adding that There weren’t many Venture Capitalists that were funding clean-tech.

“Literally less than half a dozen VCs were making energy investments 5-6 years ago. But now everyone wants a piece of the algae pie. So the future of this sector is neither slimy nor slippery,” he added.

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