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The challenge of algae fuel: An expert speaks

Algae is great, but where do you grow it?

Making fuel out of algae is one of those ideas that everyone loves. An acre of algae can produce 50 times more oil than an acre of soy, estimates John Sheehan, now vice president of strategy and sustainable development at LiveFuels.

"It can produce a lot of oil," he said in an interview on Wednesday.

The oil can be used to make biodiesel or synthetic forms of petroleum or both. Many hope that algae-based fuel can sell for around $40 to $50 a barrel, or a lot less than crude.

Algae facilities can also suck significant amounts of carbon dioxide out of the atmosphere. The fumes coming out of utility smokestacks can be piped into algae growing facilities. And to top it off, algae's not a massive food crop at the moment, so you aren't using a valuable food crop to gas cars.

Sheehan's not new to the field. He oversaw biomass, ethanol and algae programs at National Renewable Energy Labs. An NREL paper on algae--along with research from some of the national labs--forms the basis of a lot of the thinking around algae.

Right now, though, no one is producing it commercially. Companies such as LiveFuels, GreenFuel Technologies and Solazyme hope to start seeing algae oil get into the fuel markets in a substantial way over the next few years, but it's still mostly experimental. GreenFuel recently hit some snags and changed CEOs.

One challenge is removing the water. It's not uncommon to have 1 gram of usable algae in every liter of water. "That's 1,000 parts of water for every part of algae," he said.

The industry is also in the midst of a few religious wars. One is controlled versus open ponds. In controlled facilities, engineers can regulate the growth of organisms and control what kinds of species grow in the environment. These facilities cost quite a bit. Controlling the rate of growth can also be a problem.

"Open ponds are the cheapest, simplest solution," he said. "But it is much harder to maintain consistency."

Then there is the question of using biologically enhanced organisms or a mixture of naturally occurring species. Enhanced organisms can produce more oil per cell. However, they may not thrive if foreign species enter the pond.

LiveFuels is an open pond/multispecies company, by the way.

"The issue is: is it doable?" he said. "The question is: can we get the costs down to where it can compete" with fossil fuels?