Algae remain the most undiscovered and underdeveloped organism on Earth. A common algae question is:
If algae have so much potential, why has less than 1% of its potential been realized?
The answer lies in a combination of economics, technology and political issues. For decades, cheap fossil fuels made food and transportation so inexpensive that growing algae for food or fuels made no sense. For the last 40 years, soy protein could be grown at about one tenth the cost of algal protein. Similarly, fossil fuels could be extracted and refined for about one twentieth of the cost of algal oils. However, the game changed when DARPA announced $2 algal fuel production in November 2009.
An argument can be made that prior to the recent invention of biotechnology, nanotechnology, biophysics and bioengineering, cultivating algae at commercial scale was simply not possible. Humans have domesticated many plants for our benefit but some plants, such as the great oak tree, remain an enigma. Oak trees produce nuts naturally, but the acorns are harvested primarily by squirrels, not by man.
While algae are among the smallest and simplest plants on Earth, their nano size and growth characteristics made the plants very difficult to understand prior to the ability to see and track energy pathways. Recent breakthroughs in electron microscope scanning, DNA sequencing and a broad array of microbiological innovations have enhanced the ability of scientists to understand how algal cells grow, develop and store valuable compounds.
These breakthroughs will enable algae to be grown for all its many benefits, but the question remains: when will we successfully domesticate algae?
I believe several firms will announce success in field trials in September 2010 and that we will see sustained algal production in 2013. Of course, it will take several additional years to build out the industry, but that will simply be a matter of political will. When crude oil again reaches $100 a barrel and economists point out the $ 0.7 trillion leaving the U.S. for oil imports, the politics of renewable energy will experience a rapid shift.
In addition to the cost issue, cultivating algae presents a nontrivial set of technical challenges, which was assessed in the Algal Industry Survey.
The Algal Industry Survey conducted by the author for the Algal Biomass Organization in October 2009 queried 222 respondents about the challenges facing the industry. Respondents were a savvy group with over 100 algal scientists, producers and engineers, about 25% of whom had worked in the algae industry for over 10 years. About 73% were primarily interested in algal biofuels and many were also interested in carbon sequestration, advanced chemicals and unique compounds, water remediation and other co-products.
Standing between algal producers and successful production are challenges in harvest and extraction, production systems, component separation, algal species selection, culture stability and avoiding contamination. Producers are also concerned about economics, the cost of inputs, siting issues, temperature control, weed algae invasion, mutants, environmental impacts and bio-safety. Algal scientists are addressing each of these areas with excellent effect. Several new production, harvest, species selection and cost breakthroughs have been announced in 2009 that enhance each of these challenges by a factor of 10 or higher. A Harvard research team reported a new species selection technology that improves species selection 100 times.
Political budget decisions
The rest of the algal story may be found in political budget decisions made by both political parties. The Department of Energy was formed by President Jimmy Carter with The Department of Energy Organization Act of 1977. The intent for the DOE was to create U.S. energy independence. Unfortunately, renewable biofuels were given minimal consideration due to cheap coal and the DOE led the transformation of the electrical power grid from oil to dirtier coal. Burning coal to produce electricity adds roughly double the carbon load to the atmosphere as burning fuel oil.
Ironically, when biofuels reappeared on the political stage in the 1990s, the EPA, not DOE, instituted the Clean Air Act and ethanol production by proclamation with no Congressional vote. The EPA action was taken in spite of existing research showing that ethanol production and use created more air, soil and water pollution than gasoline.
Algae and other truly renewable biofuel feedstocks have lost every political battle to corn. The U.S. government committed to corn ethanol in the 1990s as America’s “renewable” biofuel, which eliminated federal funding for algae at government agencies like DOE, NREL and USDA as well as University and institutional research labs. Lack of federal funding was devastating for algal research because many universities had to close their algal labs. The U.S. lost the pipeline of thousands of students and graduate students who would have been trained in algae. Algae took a back seat to corn ethanol and Big Oil because:
- Algae have no political action committees or lobbyists.
- Algae have negative sex appeal – NASA receives $17.3 billion for space exploration but produces neither food nor fuel.
- Algae receive no subsidies or incentives similar to corn or Big Oil.
- Algae receive no refining subsidy similar to the $0.51 a gallon for corn ethanol.
- Algae have no tariff benefit like ethanol.
- Ethanol refineries can get bank loans on favorable terms, often with government-guaranteed loans because the business model has been in place for decades and prolific government subsidies moderate the risk. Algal refiners cannot get similar private funding because there are no subsidies and no government support to minimize the risk.
Corn ethanol receives generous government subsidies due to the strong farm lobby and policymakers that ignore the total cost of ethanol production. Only lavish government subsidies and tariffs make ethanol production economically feasible. Farmers receive subsidies for growing corn, water for irrigation, energy for pumping water and ethanol producers are subsidized for refining ethanol. The severe pollution and health impacts of massive ethanol production, which are estimated to be $43 billion annually, are ignored as the EPA exempts not only farmers but ethanol producers from the pollution laws that were written to protect communities.
Some policymakers have realized that ethanol is a zero-sum game, that it consumes as much energy in production as it provides. When government agencies begin to enforce environmental protection and health laws, the U.S. will shift to less expensive and sustainable biofuels that offer a positive ecological footprint.
The 2007 Energy Security and Independence Act includes language promoting the use of other renewable biofuels such as algae. Algae began receiving light funding in 2008 and NREL has reestablished two algal research projects. However, the algal industry currently receives less than 0.01% of the subsidies for corn ethanol.
Consumers are going to need liquid transportation fuels for several decades because nearly all the world’s existing cars have gasoline engines. The average car produced in Detroit has a road life of about 17 years and will continue to need conventional fuel. Air transportation, trains, trucks and ships will continue to be major consumers of high-value liquid transportation fuels for several decades.
A broad group of private equity firms are making modest investments in algae, but the risks for the first investors in this infant industry are very high. While government funding has been near zero, venture capital dollars totaled $84 million in companies developing algae-based fuel in 2008, up from $29 million in 2007, according to the CleanTech Group. These venture capital dollars are miniscule, since a simple ethanol refinery costs $250 million to build.
The U.S. government sponsored $30.5 billion in health research in 2009. A significant part of our domestic health costs comes from the empty calories in corn sugar, which causes obesity, diabetes, heart disease and cancers. Transforming our food system to low calorie, high nutrient algal sugars would go a long way in addressing our systemic obesity problem. Additional health and environmental costs accrue from the severe pollution plume associated with growing and transporting massive amounts of corn for ethanol production. Replacing corn ethanol with higher energy, cleaner burning algal biofuels would save billions in health and environmental pollution costs. On the Algal Industry Survey, 49% of respondents believed the U.S. could replace 100% of corn ethanol with algal biofuels within 10 years.
The major threat from lack of public funding for algal R&D is that private firms will lock up the fundamental pathways for algae production with intellectual property protections. Intellectual property lock out is already happening as large agribusinesses and oil companies are pursuing patent protections that will preclude others of producing algae efficiently for biofuels, food and many co-products. The irony societies may face is a world that could have viable solutions for green independence from fossil fuels as well as an end to hunger, but the people most in need would not have access.
America cannot afford to wait. Even though Americans make up only 4% of the global population, the U.S. consumes 25% of the world’s fossil energy. America has only 3% of the world’s oil reserves and currently imports about 65% of the 23 million barrels a day consumed. If America fails to move to energy independence, imported oil over the next decade will cost more than the entire current national debt, over $10 trillion.
Algae have remained undiscovered also due to the strong negative social attribution. A Google search on algae often turns up 10:1 hits on how to kill algae rather than cultivation. On an algal belief survey conducted at Arizona State University, over 92% of consumers responded with “dislike intensely.” They dislike algae because they associate it with icky, stinky green slime. Consumers seem to have a natural aversion toward something they cannot see because it is too small. Of course, consumers cannot see plant cells either but they are familiar with the form of traditional land plants. Most consumers have near zero knowledge of algae yet they share a very strong negative perception. The algal industry will have to address consumer attitudes to algae.
An algae strategy
An effective algal strategy needs to address both the technical and political challenges. The algal industry needs public funding at least on parity with other green food and energy technologies because there are considerable risks during the early stages of any new technology. A politically sensible way to migrate to clean energy technologies is a simple Congressional rule that stated “Federal subsidies and incentives are awarded to technologies that have the most positive life-cycle analysis and most benefit the environment as well as human and animal health.”