The A.I.M. Interview: Sandia and DOE’s Ron Pate

by David Schwartz

The most direct support for biofuels development can be expected to come from a combination of DOD, DOE, and USDA, of which the recently announced joint initiative on advanced drop-in biofuels is a prime example. I don’t know if DARPA will continue to support advanced biofuels work as they have in recent years, but other DOD organizations like the Navy are clearly interested and committed to moving forward with support for the development and use of advanced biofuels.

The USDA certainly views biofuels as a key element in their programs for rural economic development and revitalization, while contributing to national energy security and reduced environmental impacts. DOE and USDA have a history of cooperation and collaboration on programs and investments in bioenergy, biofuels, and some aspects of bioproducts, that can be expected to continue and perhaps expand in some ways, as the example of the new DOD-DOE-USDA initiative shows.

Among the projects and technologies you’ve observed, as a representative of the DOE whose work involved choosing promising candidates to fund, can you talk about any of those that you think have a high chance of succeeding, and why?

I think it is still too early to judge the comparative likelihood of success among different technological approaches and projects. DOE’s algae-related projects are multi-year efforts that have not been underway very long. The Biomass Program has invested in a relatively broad portfolio of competitively selected projects that not only had to meet required selection and cost-share criteria, but also had to demonstrate technical merit and promise for success in addressing whatever aspect of algae biofuels they are each focused on. Within the limits of funding available thus far, I think DOE has made a good faith effort to support a diverse mix of projects that collectively address key challenge areas for algae biofuels using different approaches that complement one another with minimum duplication of effort.

Some projects are being done by only one, or a relative few, investigators focused on a narrow area of investigation or innovation. Others cover a wide spectrum of things in a more integrated way by a multi-disciplined team of scientists, engineers, economists, and other specialists. Some involve detailed investigations in the laboratory or through computer modeling, while others involve development, integration, testing, and operation of large-scale facilities in the field. Because of the differences in project scope, areas of focus, and degree of risk, each project will have different metrics and time frames for getting results and gauging success in achieving desired objectives.

I think the main point to be made here is that all of the projects currently underway show varying degrees of promise, with different levels of risk, for meeting their objectives and contributing to the advancement of algae biofuels. The next two to three years, in my opinion, will be a critical period for seeing the outcomes of current algae projects, judging relative success, and making course corrections in the direction of federal investments.

Along those lines, from your unique perspective of selecting applicants for the DOE to provide support, do you see any that have solved critical technical or biological problems that their competitors are currently still struggling with?

Well, first of all, a lot of work is going on in industry with private sector funding that is being done behind closed doors in a very proprietary way.  Even within projects that involve federal funding from DOE and other agencies, some aspects of the technical and economic performance details associated with progress being made may need to be carefully controlled by those involved to avoid the compromise of proprietary information. The degree that this must be done depends on the project and the amount of private sector cost-share involved. So, commenting on specific details about any one project or trying to do comparisons with the state of technology of competing organizations or projects is not appropriate, nor would it even be possible for anyone who is not aware of the proprietary details of the work underway behind the closed doors of competing organizations.

I think the main point to be made here is that DOE is investing in a portfolio of algae-related projects ranging in scale from laboratory research to pilot and demonstration scale integrated systems, as well as cross-cutting modeling, analysis, and preliminary assessment of techno-economics, LCA, resource use, and sustainability. These projects are addressing a wide range of technical and economic challenges using various approaches, and most have only been underway for a relatively short time and are still very much works in progress. Again, the next several years, as these and other projects progress and report results, will be important for seeing where we are with algae biofuels.

A good source of information on what’s going on with algae-related projects under OBP is to check out the 2011 OBP Program Review Portal. This web site documents the peer review process the Biomass Program has gone through this year, broken down by topic area. By drilling down into each topic area, you can find peer review presentations on the activities, status, and future plans for nearly all of the projects funded under OBP. This is publically available information that can help gauge the state of the technology from the perspective of the OBP program investments. The OBP web site also provides additional information and access to resources of interest to the algae biofuels stakeholder community.

What gives you the most optimism for the future of algal biofuels?

I think the biggest reason for optimism lies in the potential improvements that can be made through the huge advances that are taking place in the biological sciences and biotechnology. Algae is a relatively unexplored area of biology, and one can say with confidence that we have barely scratched the surface of algae species discovery, exploration and detailed characterization of algae biology and its productive application for fuels and other valuable compounds and materials. The usual example for comparison is the domestication and improvement of crops like corn, which started as wild, low-productivity species historically, but through huge cumulative investment of resources and effort has spawned today’s highly productive cultivars and management practices.

Today’s advanced biotechnology tools and techniques can be expected to greatly accelerate the process with algae, but it still requires a sustained investment of resources, time, and focused effort. This is something that algae have lacked in comparison with other more traditional crops, including those of more recent interest as feedstock for biofuels.

Additional advances can also be expected in the development of technologies, processes, and integrated systems that can take optimum advantage of the algal biology within engineered systems to produce and process algae into fuels and other products at reduced cost and with reduced resource use intensity. Included in this is the development and application of advanced materials, sensors, controls, operational protocols, system design and integration capabilities, and analysis tools.

Bottom line is that our country can bring a lot of innovation to bear on this through the collaboration of industry, universities, and others in the R&D stakeholder community if suitable conditions exist to foster interest and provide the incentives to pursue it.

What gives you the most concern or pessimism?

Probably my biggest concern is the impact of the economic downturn and future uncertainties with industry, financial institutions, and the government for making investments in RD&D in general, and algae more specifically.

Although the idea has been around since the 1950s, algae biofuels remain an immature field that lags behind other alternative biomass feedstocks and paths to biofuels in terms of RD&D investments made over the years. More effort and time will be needed to increase algae productivity and reliability while greatly reducing the costs of doing so at the large scales needed for fuels that must compete in price and availability with petroleum-based fuels.

Other more conventional approaches to biofuels can also take advantage of the significant infrastructure already in place with the agriculture, forestry, and municipal solid waste industries, but algae biofuels face the added challenge of needing to build up aquatic feedstock production and processing infrastructure at scales that do not currently exist.

Early opportunities being looked at by many for doing that include synergistic co-location possibilities of combining algae biofuels production with other industry or utility operations that can more cost-effectively provide needed inputs to the algae operation. Well-known examples include the use of nutrient-rich wastewater from municipal and agricultural operations, the use of waste streams of CO2 from stationary sources for autotrophic growth, and the use of industrial byproduct sugar feedstocks for heterotrophic growth. These have to be looked at on a case-by-case basis to determine whether the logistics and economics make sense, but today’s investment climate makes things harder.

Mobilizing the financing needed to develop and operate a commercial biofuels project is tough enough when you have a good handle on things and a lot of supporting data and analysis at progressively larger scales on the technical and economic performance you can expect with the approach and technologies that you propose to use. With algae, there is still a lot of uncertainty with all of that. It’s not unlike the situation of bringing new agricultural crops to market. Until you go through the multi-year trials needed to work out agronomic details for best cultivars, production practices, and maybe also custom processing equipment at the scales and variations in growth conditions required to gain confidence and reduce risks, the agricultural producers and investors won’t be willing to move forward with it.

I think new industries driven by new technological innovation often best emerge and get established through the competitive and sometimes chaotic process of a lot of different players pursuing different approaches to open up promising new market opportunities. Those with complementary strengths and interests who cross paths in the process may then grow larger and compete more successfully through mutually beneficial alliances and partnering.

At the highest level, maybe the biggest balancing act is finding the proper role and extent of government involvement that defines the policy and investment climate within which the process of industry development operates. Another balancing act will be the role and extent of involvement of today’s mainstream industries associated with conventional fuels, engines and vehicles, transportation, and their associated infrastructures with the efforts of algae biofuels industry development.

The growing interest in developing drop-in equivalent biofuels is in recognition of the huge sunk investment that exists with current petroleum-based hydrocarbon fuels infrastructure, operational logistics, and certification requirements. Future success for algae biofuels industry development will likely rely on forming strategic alliances with these other industry sectors. Interest in aviation biofuels from algae by the commercial airline industry and the military are prime examples.

Much of the algal industry, as you well know, is currently branching off to pursue higher value products of algae first, with biofuels beginning to take more of a back seat – except when given financial support from the government specifically for fuel development. Is this an inevitable trend, in your opinion?

I think this is an inevitable trend. It provides a way to achieve commercial viability to an industrial venture by bringing in the revenue streams needed to support continued operations and investments that may eventually allow for affordable biofuels production. As we all know, commodity fuels are a relatively low-valued product in terms of the revenue it can bring in for each kilogram of produced algae biomass or algal oil. The current projected costs of producing biofuels alone from algae are significantly higher and non-competitive relative to the cost of petroleum-based fuels.

Producing higher value co-products is certainly viewed as a way to make the overall enterprise economically viable, but introduces the complications of managing market saturation for co-products at the scales needed for fuels. The future of algae biofuels will ultimately depend on how successful the industry can be in bringing production costs down at the scales needed for fuels. It will also clearly be influenced by the price and availability of petroleum and petroleum-based fuels, the cost and availability of other competing alternative fuels, and the investment and policy climate that exists in the country over the coming years.

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