Aurora Biofuels on Wednesday said that it has completed a successful trial of growing algae for biofuels and named former Royal Dutch Shell executive Robert Walsh CEO.
The company has been running a test at growing algae in two outdoor ponds--each about as big as an Olympic-size swimming pool--in Florida for the past year and a half.
Based on the results of that test, the company expects it can create a larger-scale demonstration facility that's 50 acres in size late next year, said Walsh who joined Aurora Biofuels from biofuel company LS9. The company raised $20 million last July to build that planned plant.
The biofuels industry has been hit particularly hard by the financial markets meltdown and recession. Several new technology companies are developing techniques for turning algae into fuel because it isn't food and can grow in a wide range of conditions.
The challenge, though, is making and harvesting algae at large scale at a price that's competitive with other feedstocks, such as palm oil or soybeans.
Aurora Biofuels is using a combination of biotechnology and engineering techniques to bring the cost down, said Walsh.
Although it is not genetically modifying algae, it is breeding salt water algae strains optimized for yielding large amounts of oil. It has also developed a method, derived from the waste water treatment industry, for harvesting the algae without having to fully dry it out, a method that is more energy efficient, Walsh said.
The drop in oil prices--now below $50 a barrel--has also made it more difficult for biofuels. Walsh said that the company expects that it can produce a commercially viable product with the price of oil at $50 a barrel and some regulations that put a price on carbon dioxide pollution.
"People will start putting a value on sequestering carbon dioxide and this will be a low-cost way to do that," he said. "It'll be cheaper and more environmentally friendly than compressing CO2 gas to 3,000 pounds (per square inch) and injecting it into old salt caverns."
The company expects to build and operate algae farms at the site of a large polluters, such as a utility or cement factory. The CO2 will be piped into the ponds to stimulate growth. Walsh projects that oil will be in the $60 to $100 per barrel range in the next five years once economies turn around.