by David Schwartz
t was in 2001 when Dr. Isaac Berzin, a PhD Chemical Engineer at MIT’s Center for Space Research, started to question the work of the Department of Energy’s Aquatic Species Program, the first major scientific collaboration looking at creating biofuel from algae. “Their plan was to take CO2 rich effluents from power plants, feed it to algae, and create biodiesel,” he says.
The idea intrigued him that you could turn carbon emissions into fuel, but he became more curious as to why this 20-year, multimillion dollar project didn’t seem to execute its plan.
When he read about their research there were two numbers that really started him thinking, he says. “One number was: what was the size of the power plant they were using? How many megawatts? And the answer was: zero. There was never a power plant involved in the 20 years of NREL research.”
His second thought focused on how many gallons of biodiesel the DOE project produced. “And you can guess the answer: zero!”
So while the idea intrigued him, he was also sensing an approaching moment of opportunity. “The world, on one hand, is shouting ‘We have too much carbon in the atmosphere’ and at the same time it is shouting, ‘we don’t have enough carbon as liquid fuel.’
“In making the change, it’s all about how you take the CO2 carbon and create an organic carbon: oil – turning your problem into your solution,” he says. “The natural answer is photosynthesis. And algae are champions of that, and what is even better: no fertile land and no fresh water are required. That is what intrigued me – turning one of the world’s biggest problems into one of the world’s biggest solutions, in a natural way.”
So with a motivation to be the first commercial producer of biofuel made from algae, Dr. Berzin left MIT to start GreenFuel Technology in Cambridge, Massachusetts – the first algae-to-biofuel company in the world. Their first biofuel was produced using the effluent of MIT’s 21-megawatt power plant, the first one ever to recycle CO2 and nitrogen effluents into biodiesel.
From there they expanded to a 1000-megawatt power plant in Arizona, and after several years the bottom line was that technologically they were able to make it happen, but… “We were able to recycle carbon from CO2 into fuel using algae,” he says, “but the inconvenient truth was that it was not economically viable. No one was going to pay $800 per barrel just because it was green.”
In 2009 GreenFuel closed its doors, after $70+ million of investment. Since that time, Dr. Berzin has been operating, as he says, “under the radar” using his hard won wisdom to retool the algal biofuels industry with a strategy more likely to address the all important economic factors in algae’s development path. Most recently he has announced a partnership between his company, Israeli-based Qualitas Health, and Valicor Renewables, formerly Solution Recovery Services (SRS) located in Dexter, Michigan.
We spoke with Dr. Berzin recently to find out what he’s been up to for the past four years, what observations he has from the experience of building and closing down the first major algal biofuel company, and to learn more about this new partnership with Valicor.
As you look back on your eight years at GreenFuel, what are some of the lessons that have come to light?
GreenFuel was mainly dealing with the scientific challenges of growing algae productively using power plant effluents and creating fuel from the oil – an amazing set of technology challenges that we planned to deal with.
But no one was measuring the overall economic equation around everything that algae produced. So this was the biggest mistake. Because I was so passionate about fuel, I didn’t really want to hear about anything but fuel, such as the coproducts that have become popular as first generation output from today’s algae companies. At the time, it wasn’t interesting. I was blind and deaf to it.
As a scientist, when I look for retrospective here – and I’m sure we all know it from life – sometimes your biggest passion makes you blind. The same driver, the thing that makes you do all these crazy impossible things, can be the one thing that hurts you the most in the end.
GreenFuel Technologies closed their doors in 2009. What sorts of projects dealing with algae have you been involved with in the past four years?
When GreenFuel closed the doors we went under the radar to take a step back and see how we could build a combination that made sense. So we explored feed and food as complements to the fuel. And then we had to make priorities. What are we going to the market with first, and what do we do after? Altogether the economic equation now makes a lot of sense.
And it led us to our decision to go out first with the product that we think has the most economical advantage: omega-3. So we went through a whole discovery process of what makes sense in the omega-3 world. What we discovered was that this multi-billion dollar market is thirsty for a change. It has a global need for an alternative omega-3 source, because the demand is huge and the present marine-animal sources are not sustainable. And worse than that, the quality of input – mainly fish oil – is problematic as far as how clean it is in terms of heavy metals, drugs and other toxins.
But also, fish oil is a blend of DHA and EPA – the two major omega-3s that are known to be helpful for human health, except that DHA and EPA are not such a good thing together.
Many studies are now looking at the fact that you need different omega-3s for different applications. If you are a baby, and you want to develop your brain and your eyes, you want DHA-rich omega-3. That’s why Martek is doing so great; they have a pure DHA product from algae that goes into baby formula. But as an adult, if you want to improve your cardiovascular system – as was proven by the Amarin clinical trials – or you want to improve your mood, what you want is EPA.
We just met with one of the leading psychiatrists in the field. His group recently concluded a meta-analysis, looking at omega-3 as an antidepressant. They are using the expression “unopposed EPA,” which means, how much EPA minus DHA you have, because EPA and DHA compete for the same receptors in your body, and DHA will not help your depression. Their research found that only if the majority is EPA do you get good results in the depression studies. So going with pure EPA, rather than an EPA / DHA mix, is important.
In addition, it doesn’t matter how much EPA you swallow, it’s a matter of how much ends up in your body – which is called bioavailability. If you look at the market today, there are products that are more bioavailable, like krill oil. Despite the fact that krill oil contains only about 30% omega-3, this market segment is growing at about 40% annually, although the price tag of krill oil is significantly higher than fish oil with comparable composition.
This higher price is because the krill oil companies were able to show that their polar-lipid omega-3 gets absorbed in the body (going from the digestive system to the blood, and from the blood to the organs) at a higher rate, compared with other omega-3 compositions typical to fish oil products. It is important to remember that the polar lipid composition that makes krill oil so bioavailable comes from the algae in their diet.
And this led you to the partnership with Valicor?
This is the basis of what we are doing now with our partner Valicor. In our algae strain we have pure EPA – meaning no DHA – formulated in polar lipids that make it more bioavailable, similar to krill oil.
That’s where Valicor and our corporation have a very strong proposition to the market. Their extraction technology is food grade, uses non-toxic solvents, but more than this – it extracts the oil while keeping the polar structure of the molecules intact. Most of the other algae extraction technologies break these valuable molecules.
How do the roles work within the partnership?
Valicor is an amazing extraction partner. Qualitas Health has developed the before and after, which means we select the algae strains, build the farms that grow the algae at very large scale and harvest the algae. Valicor has developed the technology to extract the oil from the algae paste.
Once we have extracted the EPA-rich oils with Valicor’s technology, we take it to further refinement to make sure we have a constant product formulation regardless of how the composition of the algae might change on a seasonal basis. Then we have other partners that market it. We plan to supply the product at the barrel level, and our partners will encapsulate and market it further.
You’re calling this EicoOil, at least at the barrel level. How will this be differentiated from other omega-3 oils?
There are three aspects in which this patent pending oil is totally different. Aspect #1 is that it contains only EPA, with no DHA. So the unopposed EPA level is maximal. Secondly, the EPA composition is rich in polar lipids, which makes it more bioavailable than the form produced by fish oil. EicoOil is currently in clinical trials and we hope to prove this point scientifically.
Third, unlike marine-animal based omega-3, EicoOil comes from a sustainable and primary source – algae. So it’s an optimum molecular structure and composition from a sustainable source — we think there is a lot of value in that.
Since other partners will be bringing this to market, do you see this mainly being encapsulated as supplements, or will it be incorporated into foods as well.
We plan to launch the first product in Q4 2013 in a softgel format as a supplement. The regulation level for food ingredients is higher, so this application will probably follow.
With your company responsible for growing the algae, will you be licensing farms or owning the farms?
So far we’ve raised enough money to build and operate our own farms. We’ve had some thoughts in the past to license the technology, but we think that a better way to go at this point is to have our own farms.
Where are you cultivating?
We have two locations currently cultivating. One, mainly aimed at the aquaculture industry, is in the North of Israel. It is a partnership with two strong Kibbutz groups, which are also investors in the company. The main production farm for EicoOil is being built in the Southwest United States, because of the climate, access to brackish water, land availability and infrastructure. There is also a lot of CO2 available locally, thanks to the local oil and gas industries.
What strain are you cultivating?
We are using nannochloropsis and are very happy with. It’s a natural strain, not genetically engineered. But we’ve learned how to keep the strain, on one hand, very productive in terms of EPA production. And on the other hand, our cultures can sustain for a long time without crashes.
Crop protection is one of the major challenges that the industry is facing: the robustness of the system. If you look at the successful large scale algae operations, you usually see extremophiles – algae that like to grow in extreme conditions, for example: extreme pH or extreme salinity. But our algae are not extremophiles. One of the strategies we worked hard on in the last couple of years was crop protection, enabling us to grow Nannochloropsis at large scale in a robust way.
Is your intention to get back to fuel at some point?
Yes, because it happens naturally: Feed, Food and Fuel. If you look at the algae, when you recover the oil, you’re left with a pile of protein meal. Most of what you’re left with, if you do the mass balance, 60-70% of the mass is protein meal. So of course you’re going into the feed market because that’s the by-product. Then when you look at the oil fraction, the non-omega-3 oil is a perfect feedstock for biofuels. So making the decision to do all of the three (feed, food and fuel) is a very natural fit that I think makes a lot of sense.
On a more reflective level, do you have any advice for the algae entrepreneurs out there looking to help move this industry forward?
Well, I have some scars to share, and hopefully some wisdom that comes along. I think first you need to know that it’s a deceivingly simple industry. It may look simple, but it’s really hard – because many different disciplines are required. You need someone to farm the algae, someone who can separate the algae from water, someone to extract the oil out, someone to refine the product…the spectrum of talents that you need around the table is significant.
So my advice is that partnerships make much more sense than going it alone. Don’t think that all of the wisdom is in your head because you cannot solve all of the problems at the same time. Teamwork is much more efficient.
Conclusion number 2, and I wish I had known this before, is: Cash is not king, it is King Kong! Make sure that the compass in your hand looks at the economical equation. It’s very easy to be distracted by the technological challenges, or what’s interesting, or what’s easy, or what makes technological sense. But the main thing that should guide you is your economical compass.
The third thing is: listen to the algae. In the end, the role of technology is to keep algae happy, and not vice versa. You don’t train them to jump as high as you want, you have to listen to what keeps algae happy and accommodate them. Biology comes first; then technology.
Here’s the bottom line. I still think that algaculture is absolutely the agriculture of the future. The world cannot sustain itself with the finite resources of fresh water and fertile land. So if you look at all of the above – feed, food and fuel – it will happen. There’s no doubt in my mind. Algae will be the next big thing. I don’t see a world without it and the view is definitely worth the climb.