Powering Our Automotive Future with Pond Scum

Corn—or the cellulose in everything from wood chips to crop stalks—are often touted as the basis of the fuel of the future. But Microsoft founder and billionaire Bill Gates is betting that algae will provide the answer to our future fuel needs. He's so sure, in fact, that last week he joined the Rockefeller family and London-based Wellcome Trust to invest $100 million in a California start-up devoted to churning out biofuel from this tiny primitive plant.

San Diego-based Sapphire Energy, which launched in May, plans to use the money to produce more than 10,000 barrels of so-called green crude (oil from algae that is chemically identical to fossil oil) in as little as three years.

But company background materials (pdf) note that it uses "photosynthetic microorganisms, such as algae, sunlight, [carbon dioxide] and nonarable land."

Sapphire Energy is one of more than a dozen companies that have sprung up in recent years to harness algae's power to make and stockpile oil. "Algae stores oil because it's energy dense and [algae] want to use it for fuel" (similar to the way animals store energy reserves as fat), says Jonathan Wolfson, CEO of South San Francisco–based Solazyme, Inc., which produces its algal biofuel in the dark. "Algae is the best in the world at taking chemical energy and turning it into an actual chemical, but it's going to take a long time to make it best at harvesting photons."

That's why Solazyme uses industrial fermenters, such as those used by the pharmaceutical industry to produce insulin, to grow batches of algae in the dark. Instead of feeding on sunlight and carbon dioxide (CO2), Solazyme's genetically engineered algae produce oil from sugar water inside these large tanks.

Costs for algae-based fuel currently range from $10 to $100 per gallon, according to systems engineer Ron Pate at Sandia National Laboratories. "The idea [is] bringing algal oil down to $1 or $2 per gallon at a scale of 50 million gallons [190 million liters] per year."

High cost is a problem throughout the algal biofuels industry. "It's energy cost to pump the water," says Craig Harting, chief operating officer for Vancouver-based Global Green Solutions, which is building 100 bioreactors (large plastic devices used to grow algae) at a pilot plant in El Paso, Tex. "It's capital cost to build bioreactors. It's the harvesting and extraction process."

As a result, most companies say they have yet to determine the consumer price tag for algae-derived oil—or to produce much of the stuff—though Wolfson says Solazyme's goal is $40 to $80 a barrel—competitive with fossil oil.