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

by David Schwartz

Aprincipal member of the technical staff of Albuquerque, New Mexico-based Sandia National Laboratories, serving in the Earth Systems Analysis – Energy, Resources, and Systems Analysis division, Ron Pate has been on M&O Contractor assignment in Washington, DC with the Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy (EERE) in the Biomass Program for the past two years, bridging the gap between the science community and the DOE’s policy and financial support of algal technology development.

At Sandia, Ron has worked for over 25 years on a variety of technology and systems engineering research, development, testing, and analysis programs spanning the areas of national security, defense systems, sensors, energy systems, and critical resource issues. In recent years he has focused on biofuels and the interdependencies of energy, water and other key resources, and has led and contributed to Sandia teams engaged in program development and R&D projects in these related topic areas.

Ron was part of the core national team that facilitated the development and publication in 2010 of a National Algal Biofuels Technology Roadmap report, under the auspices of the Office of Biomass Program (OBP) in the Office of Energy Efficiency and Renewable Energy (EERE) at the DOE. Ron’s two-year assignment with the DOE, providing technical support to OBP’s emerging algae biofuels program, concludes at the end of FY11, after which he will return to Sandia in October 2011.

Since Ron is one of those rare scientists familiar with both the commercial and regulatory sides of the complex algal landscape, we had been looking to get his unique insight and predictions since the earliest days of A.I.M. We appreciate his sharing of not only these, but some extremely valuable documentation that should be studied by anyone serious about the future of this industry. Please note also that his comments reflect his personal and professional opinions, and do not represent an official position of the DOE or Sandia National Laboratories.

Regarding the recent announcement of $510 million to be invested by the government over the next three years in advanced biofuel development, how much of that do you think will go in the direction of algal biofuels, and what part of the process will get the most support?

Based on information released thus far, algae will likely have an opportunity to compete under the initiative. The operative word is “compete”, since there will certainly be detailed objective requirements and criteria that will have to be met. Among those will be the fact that the main goal is to produce drop-in hydrocarbon fuel. Also, a substantial cost-share from industry will be required, which, according to the public announcement, is likely to be at least a one-to-one match (≥50% industry cost-share). An additional goal that will no doubt get translated into some form of requirement under the program will be to get the costs of the biofuels down to a level approaching being competitive with petroleum fuels, at least when cost offsets that may be provided under the program are factored in.   There will also be some level of requirement for GHG reduction relative to conventional petroleum fuels.

The recent (August 16) announcement[1] basically says that there is a joint Navy-DOE-USDA biofuels initiative getting underway, at the direction of President Obama, that plans to invest up to $510M over the next three years toward the production of advanced “drop-in” biofuels. The official document backing this up is a short MOU[2] signed by the Secretaries of the Navy, DOE, and USDA, which is in response to the President’s directive issued this past March as part of his “Blueprint for a Secure Energy Future”[3].

The MOU document gives brief background on why the development of a robust domestic market and supplier industry for advanced drop-in biofuels is an important element of our national energy security, and describes the objective of the initiative simply as: “… the construction or retrofit of multiple domestic commercial or pre-commercial scale advanced drop-in biofuel plants and refineries with the following characteristics:

  • Capability to produce ready drop-in replacement advanced biofuels meeting military specifications at a price competitive with petroleum;
  • Geographically diverse locations for ready market access; and
  • No significant impact on the supply of agricultural commodities for the production of food”

This was recently followed by the public release of a request for information (RFI)[4] from industry to help inform the expected call for proposals. The RFI has a list of what the government believes will be important considerations.   This includes the maturity of technologies proposed for commercial scale deployment, and the feasibility and economic viability of proposed biomass feedstocks to meet commercial scale biofuel production volumes.

Commercial scale biorefinery production volumes are characterized as being on the order of 10 million gallons per year. The challenge for algae is whether it will be able to successfully compete head-on under this program with other more mature biofuel production technologies and feedstocks.

How much investment has gone into algae research so far from the DOE?

Well, first of all, there was the original DOE investment of about $25 million for the Aquatic Species Program that ran from 1978 – 1996[5]. The recently renewed interest and funding for algae biofuels RD&D at DOE has primarily been through DOE/EERE’s Office of Biomass Program (OBP). This began early in FY2009 with the initiation of the National Algae Biofuels Technology Roadmap effort[6]. Investments in algae took a big leap during the FY2009- FY2010 period with the addition of stimulus (American Recovery and Reinvestment Act: ARRA[7]) funding on top of DOE’s normal program budget funds.

Total OBP investments in algae from FY2009-FY2011 add up to about $183 million. Of that, about $146 million was ARRA funding and about $37 million was program funding. The ARRA funding was invested in three algae-related Integrated Biorefinery (IBR) projects cost-shared with industry, two of which are pilot scale (Algenol, with $25M in DOE cost-share, and Solazyme, with $22M in DOE cost-share) and one demo scale (Sapphire, with $50M in DOE cost-share). The NAABB Algae Biofuels R&D Consortium project was also a cost-shared effort with industry, university, and national lab partners funded through DOE with $49M in ARRA contribution. Program funds from OBP have gone toward the support of three other cost-shared algae R&D consortium projects, and a number of additional algae-related projects with industry, universities, national labs, and the National Academy of Sciences.

Besides the OBP investments, DOE’s ARPA-e Program, Fossil Energy Program (through NETL, with focus on carbon capture), and the Small Business Innovation Research (SBIR) Program have each also invested additional funding recently in algae-related RD&D projects. As of last December, the total investment in algae by OBP, ARPA-e, Fossil Energy, and SBIR was about $236 million. I’m not sure what the total funding is as of today. DOE’s Office of Science also makes significant investments in biological sciences, technologies, and tools that are being leveraged for, and contribute to, algae biofuels R&D. Again, I don’t know exactly how much additional investment that adds up to and it is difficult to map and attribute how much of those investments contribute directly to algae R&D, since it represents the development of supporting technical capabilities and knowledge base that has broader applicability.

I think it is safe to say that DOE’s combined investments in algae since 2009 exceeds $240 million. This is a relatively modest figure in the grand scheme of things, especially in comparison to both public and private sector investments that have been made in other fuel alternatives, both fossil and renewable. Investment of a few hundred million dollars over several years is also small in comparison to the strategic importance of fuels to our economy and national security. When you consider that we spend something close to a $1 billion per day on petroleum imports alone, it puts things in more perspective!

What role do you see for the DOE going forward, with respect to algal biofuels R&D or infrastructure building?

I expect to see DOE continue to play a role in making key investments in biological science and technology at the more fundamental levels, mainly through the Office of Science, that will contribute to the knowledge base and development of tools that can benefit algae R&D. This is true regardless of whether or not the Office of Science actually invests significantly in work on algae, which it currently does not. At the more applied level, I expect to see continued direct investment in algae biofuels RD&D and support for infrastructure building through OBP, with maybe continued support through ARPA-e for research and technology development that falls somewhere in between. All of this is contingent on what happens with future budgets.

Investments by both ARPA-e and OBP can play an important role in supporting U.S. technological innovation and reducing industry risks with new applications development. In my opinion, algae biofuels fall into the “high risk / high reward” category of investment that is difficult, if not impossible, for the private sector to undertake and support on their own at the levels and breadth of effort needed to really advance the field. My own experience is that the so-called “valley of death” is a very real place when it comes to taking a technology idea from concept to commercial product, and it usually takes much longer time and requires much more investment than most people think. This is especially true in mature and relatively conservative industry sectors like energy and fuels and their associated end-use application markets.

I believe that DOE, both through its investment funding and by providing access to it’s network of national R&D capabilities, can play an important role collaboratively with industry and academia to help address some of the more critical and higher-risk technical and economic challenges facing biofuels generally, and algae specifically.

It’s important to keep in perspective that we’re talking here about strategic investment in U.S. innovation and technical improvement for the longer-term future of reliable and sustainable domestic fuel supplies critical to the nation’s economic and environmental health and security. This, in my opinion, brings national security and national economic well being arguments to the table for why federal investments are needed and appropriate to support critical RD&D involving longer lead times and technical risks that can’t be borne by, or left entirely to, short-range bottom-line market-driven industry decisions. We also need to be working on reducing demand through more efficient use of energy and fuels, but developing more secure and sustainable supply side options can’t be ignored.

How about funding from other governmental agencies, like USDA, EPA, DARPA or others? Where do you see the most support for algal biofuels coming from in the future?

These and other federal agencies, including DOE, communicate and coordinate at high levels though an interagency bioenergy R&D board and related biofuels working group. Each of the federal agencies come at this from the perspective of different missions, roles, responsibilities, authorities, and budgets. Agencies like EPA have a regulatory role that is clearly different from the scientific and technology research, development and application roles of agencies like DOE and DARPA.