Biofuels

According to Perth based Murdoch University’s Professor Michael Borowitzka, the basis of the claim centres around the fact “the algae has been grown for over 12 months, while some are claiming growth rates extrapolated off best conditions. ” Borowitzka, who has 15 years of experience with cultivating algae, is the project leader for a joint $3. 3 million project led by Murdoch University in Western Australia and involving the University of Adelaide in South Australia.

“These results are also achieved in Perth, whereas the trial ponds will be located in Karratha in the northwest where the hot and fine conditions are much better,” he told Australian Aviation. “It was previously believed impossible to grow large quantities of algae for biofuel in open ponds consistently and without contamination, but we’ve proven it can be done. ” The team has developed strains of algae that successfully deal with contamination.

The project has received $1. 89 million from the federal government as part of the Asia Pacific Partnership on Clean Development and Climate. “This is the only biofuel project in Australia working simultaneously on all steps in the process of microalgal biofuels production, from microalgae culture, harvesting of the algae and extraction of oil suitable for biofuels production,” Borowitzka noted.

He said that due to the project’s success, construction of a multimillion dollar pilot plant to test the whole process on a larger scale is now underway in Karratha and it is expected to be operational by July. “We have achieved production rates of 50 tonnes per hectare per year, over half of which is converted to oil. These high production rates are expected to increase at the new pilot plant due to the even better climatic conditions in Karratha. ” Borowitzka added that the cost of producing biofuel from algae already has dropped from $12 per kilo to below $4 in the past year, but the aim is to get it down to less than $1 per kilo. A price of $4 per kilo translates into a cost of $5 per litre of fuel.

Algae of course is not the only biojet feedstock, although it holds the most long term promise.

Airbus engineer program manager – alternative fuels Ross Walker believes that despite the challenges of mass-producing large scale biofuels from feedstocks such as algae, they “will make up 15 per cent of aviation fuel by 2020 and 30 per cent by 2030. ” Thomas Todaro, CEO of Seattle based Targeted Growth, a crop biotechnology company, suggests this is an ambitious target but qualifies that by saying, “We have a lot of smart people working on this and an increasing number of companies. ” “I get an email every week from a new company interested in developing biofuels,” notes Boeing MD – environmental strategy Bill Glover. “I believe that biofuels will make up one per cent of aviation fuel within five years and be a significant part of the fuel supply by 2020. Sure the figures are aspirational, but they are also an intent and we shouldn’t make judgments – it is way too early. We really have made tremendous progress in the last three years. ” A new player with a US$600 million intent is oil giant ExxonMobil, whose chairman and CEO Rex Tillerson once mocked ethanol as “moonshine. ” Last year the company joined with Synthetic Genomics, a biotechnology company, to launch into algae biofuels. Synthetic Genomics is best known for the work of Dr Craig Venter, renowned for decoding the human genome in the 1990s. Recently, he has been focused on a search for microorganisms that could be turned into fuel.

Testifying before the US Congress last October, Algal Biomass Organization executive director Mary Rosenthal, representing the group’s 170 members, said, “Production timelines for the industry range from near-term (one-two years) to mid-term (five-eight years), proving that the algae based fuel industry is ready to commercialise. ” But speaking at the third Biomass Summit in San Diego in October, Colorado based Martek Biosciences chief IP officer Bill Barclay supported Todaro’s caution, telling more than 700 delegates that “we’ve got to be careful not to over-promise success. ” Reflecting the interest in the subject, there were 70 speakers and 25 exhibitors at the conference.

Glover believes the catalyst for investment will be approval of a specification for a 50/50 blend of conventional jet fuel and biofuel that is anticipated this year. “We saw a hint of this last year with the announcement that KLM had formed the SkyEnergy consortium with North Sea Petroleum and Spring Associates to accelerate the development and production of biokerosene. ” KLM also carried out a camelina/jet fuel flight with nonrevenue passengers as observers. There is little question that aviation biofuels will come from a variety of feedstocks. Todaro notes that “all (feedstocks) have possibility, some have promise but none have reality as yet. We are probably the furthest along of anyone trying to create dedicated industrial or energy feedstocks,” he claims, and “we have spent 10 years and US$50 million on these efforts and expect to do 100,000 barrels (16 million litres) a year within three years and that is a massive task. ” Putting that into perspective, on December 15, 21 US and international airlines signed an MoU to purchase up to 380 million litres a year of camelina derived biojet from a TGI facility to be built near Seattle-Tacoma International, but that US$200m (A$220m) contract will account for only between 10 and 15 per cent of the fuel used at the airport each year. “This is the world’s largest aviation biofuel deal by several orders of magnitude,” notes Todaro.

The industry is upbeat on the hereand- now of camelina. Glover says the feedstock is well suited to be a sustainable biofuel crop as it naturally contains high oil content, its oils are low in saturated fat, it’s drought resistant, and requires less fertiliser and herbicides.

It also can grow on marginal land. In April 2009, Sustainable Oils, a joint venture between TGI and Green Earth Fuels, said a lifecycle analysis of jet fuel created from camelina seeds showed that it reduced carbon emissions by 80 per cent compared to traditional jet fuel. In just two years of development, TGI has improved camelina yields by 33 per cent through breeding and expects a further 100 per cent-plus yield increase by 2012.

The company is moving to tap Australia’s vast wheat bowl. “There are three great wheat bowls – North America, Australia and Central Europe – but the latter has significant IP issues for biofuel producers,” suggests Todaro. Camelina is used in place of a fallow paddock and thus it technically is possible to put under crop between 25 per cent and 33 per cent of the world’s dry wheat farmlands.

Estimates put camelina’s potential for North America at 3. 8bn litres within seven years. However, this represents just a tiny fraction of the industry’s requirement for 340bn litres a year. Farmlands in Montana have been used extensively to crop camelina and it has been estimated that the state could support 800,000 to 1. 2m hectares of it, generating 760-1130m litres of oil each year, about 0. 3 per cent of industry demand.

It is estimated that eventually it could be grown on more than 4m hectares in the US. Of the other feedstocks, Glover believes halophytes will be ready in two to four years as will jatropha, although the mechanical harvesting issues of the latter may pose a problem.

He concedes that the industry may have overestimated jatropha’s potential – it was jatropha that formed the basis for Air New Zealand’s December 2008 biofuels 747 test flight (see title pic).

There is little question that algae is the great green hope for the aviation industry, but TGI suggests it is still essentially a science project. “Algae needs to be nurtured and not brought out too quickly or it willfail. We need hardcore science with first class engineering with first class distribution and you need close integration,” Todaro insists. Glover sees algae as an “eight to ten year bet. ” But the science is exciting. In the past three years TGI has achieved in the lab what the agricultural industry has taken 30 years to accomplish – a 400 per cent increase in the lipid content of cyanobacteria (algae).

But how to drive the cost down for full scale production of biofuel is an unknown and is a function of engineering, as there are a significant number of processes and corrections required for algae, such as the dewatering and separating of lipids. The processes do not exist at scale, TGI suggests.

Balancing that view, last year San Diego based Sapphire Energy increased its forecast of its algae production. By 2011, the company says it will be producing 3. 8m litres of biodiesel and biojet per year, double its initial estimates, and by 2018 the number jumps to 380m litres a year and by 2025 to 3. 8bn.

VP Downstream Technology’s Brian Goodall says, “Fuel from algae is not just a laboratory experiment or something to speculate on for years to come. The technology is ready now. Within the next three years we’ll be producing enough to help meet the growing demands of industry and the military. ” Stephen Mayfield, an algae scientist at The Scripps Research Institute in La Jolla, California, told delegates at the 2009 Biomass Summit that he believes the slimy stuff may be worth US$30,000 an acre to farmers – more than they can get for any other feedstock. Delegates pondered: “What will those numbers do for arid or brackish land?” Airbus believes, as does TGI and other biofuel companies, that government incentives are essential to promote biofuel feedstock production. Walker says the manufacturer believes that “governments should not regulate” the use of biofuels, but rather “recognise biofuel use in the (European Union) ETS scheme” through incentives.

Todaro thinks government incentives could play a major role. “The government should provide price support for a limited number of refinery facilities worldwide. I think I know what our biofuel will cost but it is impossible to know until you build it and you can’t build it until you have a customer and the customer will not commit until there is a firm price. ” Airlines may be forced to shoulder price risk, he suggests.

Glover contends that government support is “critical for the biofuel industry as either price or crop guarantees to give a new industry an opportunity to get its feet under it. ” Testifying before Congress in October, Rosenthal urged lawmakers to extend protections to algae similar to those enjoyed by other biofuel stocks. These include tax incentives, subsidies and other financial benefits. She also called on Congress to recognise algae’s beneficial reuse of CO2, which she said should be acknowledged and accounted for in carbon capture and sequestration legislation.

Airbus maintains that putting all the industry’s eggs in one biofuel basket would be a serious mistake. “Local solutions from local environments giving local employment, and thus less energy in transporting fuels, are the keys,” Walker says.

Singing from the same hymnbook, Thailand’s Minister of Energy Wannarat Channukul proposes that the Association of Southeast Asian Nations become a biofuel hub with the potential to be the OPEC of biofuels. He highlighted that Indonesia and Malaysia are the world’s largest palm oil exporters, while in his view Thailand has the best location for biofuel development in the region.

According to Richard Jones, deputy executive director of the International Energy Agency, biofuels account for only 1. 5 per cent of the 85m barrels of oil used every day in global transport of all types. But if all countries embraced biofuel development, that could surge to 25 per cent or 25m barrels per day by 2050.

Boeing and China signed a biofuel agreement late last year with the Chinese Academy of Sciences and Chinese universities calling for research and development that potentially could support commercialisation of jatropha. Boeing has established similar R&D agreements on halophytes in the Middle East and Mexico.

China has been proactive in the biofuel area for a number of years, with jatropha planted in 2007, and the plant – either wild or cultivated – can be found in Sichuan, Yunnan and Guizhou provinces as well as the Guangxi Zhuang autonomous region.

Yunnan has 33,000 hectares under cultivation and the Xinhua news agency claims that the country will have 13m hectares of biofuel plantations by 2020 that will produce over 5m tonnes of biodiesel annually.

TGI sees the military, particularly the US armed forces, playing a key role in the creation of a viable biofuel supply chain for the airline industry, but warns that this should be a partnership. “We have won orders for several hundred thousand gallons for the US Navy and Air Force,” notes Todaro, and there is an “expectation that they will be major customers. ” The USAF recently conducted test runs of an F404 engine using a blend of camelina and jet fuel as part of the validation of biofuels for the military. The military involvement will give the industry and investors confidence, as the first generation of biofuels had real challenges, TGI suggests.

But there has been some confusion in the market. “The second generation (of biofuels) are getting real interest but caution from the financial community,” Todaro says.

“The difference this time is that we need to develop more slowly and thoroughly to give customers greater confidence. ” Inroads into the challenge continued last year as demonstrated by Qatar Airways’s first revenue flight powered with a mixture of gas-to-liquid and jet fuel from London to Doha. GTL, while not reducing CO2 emissions, has lower particulate emissions, and a slightly higher energy density which means the aircraft can fly a little farther on the same quantity of fuel. GTL also gives the industry another fuel source.

Underscoring the Catch 22 for biofuels and the need for a government support role, UOP Renewable Energy and Chemicals GM Jennifer Holmgren asked at the KLM biofuel flight late last year: “Why would someone grow an energy crop if there is no one to sell it to, and what would a buyer do if there is nothing to buy? And buyers want to buy 250 million gallons a day. ”