Live: 300+ Best Black Friday Deals Live: Black Friday TV Deals BF Deals Under $25 BF Deals Under $50 5 BF Splurges 8 BF Must-Haves 15 Weird Amazon BF Deals BF Cheat Sheet
Want CNET to notify you of price drops and the latest stories?
No, thank you

Chevron, NREL to research algae fuel

Algae has been the terrain of start-ups, but now Chevron is interested too.

Algae fuel is going uptown.

Chevron, the honkin' big oil company, and the National Renewable Energy Labs have announced they will collaborate on identifying and developing strains of algae for fuel. Potentially, the research could result in jet fuel that uses algae as a feedstock.

The collaboration is part of a five-year deal, kicked off in 2006. The two are already cooperating on research for bio-oil reforming, which involves taking bio-oils and turning them into hydrogen and other oils.

In the past few years, a number of start-ups such as LiveFuels, Solazyme, and GreenFuel Technologies have come up with plans to turn algae into a basis for biodiesel or a synthetic form of petroleum. Some of the companies want to genetically manipulate the algae, while others will use natural strains of algae. GreenFuel, meanwhile, will put its algae-growing ponds near electric power plants so that the microorganisms can take carbon dioxide out of the atmosphere and cut down greenhouse gases.

Chevron will work with start-ups too. The idea is that start-ups will incubate ideas and Chevron will try to commercialize the promising ones, said Don Paul, Chevron's retiring CTO, in a speech earlier this month. Start-ups will have a tough path if they want to commercialize fuel themselves. Building a full-fledged commercial-scale fuel plant takes about $3 billion and takes more than a decade, Paul noted. A prototype plant--a facility that can crank out 1,000 barrels of oil a day, a drop in the bucket in the world's 85 million barrel a day diet--costs around $300 million

Algae is an incredibly oily microbe--some species are nearly 50 percent lipid. Algae also grows fast so a hectare can produce 15,000 to 80,000 liters of oil a year, far more than most other oily plants. It also has almost no other value, unlike corn.

So the catch? It's not easy to convert into fuel. Separating water from algae has been one of the big problems. It's not uncommon to have 1 gram of usable algae in every liter of water, according to John Sheehan, vice president of sustainability at LiveFuels. "That's 1,000 parts of water for every part of algae," he said in an interview earlier this year.

Cost is also a problem and it's unclear at this point when or if algae fuel will compete with fossil fuels. Sheehan knows of what he speaks. He oversaw some of the early algae fuel projects at NREL. A lot of the start-ups rely on research from the national labs.

If anything, fuel is clearly running out. We've used up about 1.1 trillion barrels of the traditional sources of oil on the planet, said Paul. By 2012, we will have used 1.5 trillion barrels and not everything down below can be extracted. Thus, there is an opportunity for alternatives.