HAPPENINGS IN ALGAE

Algae-Based Biofuels; Demand Drivers, Policy Issues, Emerging Technologies, Key Industry Players, and Global Market Forecasts
Mackinnon Lawrence and Clint Wheelock, 4Q 2010 (Pike Research)

"…In the face of increasing petroleum scarcity, oil prices, oil price volatility, and greenhouse gas emissions, algae remain an untamed resource, but full of potential…[but] they demand ideal growing conditions…[A]lgae can be considered both a prolific nuisance and a fickle partner.

"Interest in algae as an energy source began in earnest in the 1970s through the U.S. Department of Energy’s Aquatic Species Program (ASP). The effort was discontinued in 1996 due to production challenges and oil prices at $10 a barrel. However, oil prices have been climbing…A variety of startups, the forging of strategic partnerships with large multinationals, and the organization of university-based research consortiums worldwide are evidence of a mounting global response to the challenge of domesticating algae for the production of biofuels…"

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"…[Algae have]…High per-acre productivity (capable of producing 2 to 20 times more oil per acre than leading oilseed crops)…[are a] Non-food-based feedstock…[can] grow on non-arable land (e.g., deserts)…[use] a wide variety of water resources (including wastewater and seawater)…[can produce] a wide range of fuels and valuable co-products…[but] the algae-based biofuels industry is still relatively young. The industry boasts tremendous success in the lab, but has yet to produce a drop of fuel for commercial sale.

"On paper, algae could displace petroleum altogether; however, the industry will take time to develop…By 2020, Pike Research forecasts that the production of biofuels derived from crude algae oil will reach 61 million gallons per year…and a market value of $1.3 billion…[for] a robust compound annual growth rate (CAGR) of 72%…"

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"With 50% of all algae activity, the United States is poised to ramp up production the earliest among world markets…The first commercial-scale facilities with a potential production capacity of 1 million gallons will likely come online in the 2014 to 2016 window…[A]lgae potential is greatest in regions where there is an abundance of land, water, and sunlight…Algae’s ultimate threat is over-hype…Producing algae-based biofuels is essentially an agricultural challenge…

"Production consists of three key technological hurdles, the costs of which must decrease significantly…First, cultivating algae biomass consistently, across regions with varying climates and environments and at scale, has yet to be demonstrated…Second, harvesting and extracting algal biomass from the slurry remains a difficult challenge…Third, techniques for extracting the oils out of the algae are mainly suitable for analytical and laboratory-scale procedures, or for the recovery/removal of high-value products. To produce algal biofuels as a competitive bulk commodity, the extraction techniques must become more efficient and effective…"