Friday, May 09, 2008

Vertigro and Algae Oil


Comment on
Vertigro Algal Oil Project

Sometimes I get really well balanced comments (and sometimes I get ones which are not) and rather than leave these considered and intelligent statements tucked-under a past post, I recon they are worth a proper airing. Here is one such comment from Daryl on "Vertigro" and their Algal Oil Project:

Daryl has left a new comment on your post "Algae How Much Oil?":

Hi Tony,

I've been checking into the Vertigro product and algae biostock in general.

In 12/07, Valcent announced initial test results, based on 30 reactors running for 90 days continuously, without any optimization yet.

This configuration can harvest algae and extract oil at a rate of 1 gram/litre (dry weight), which extrapolates out to 276 US tons per acre per year, using their formulas. Then, assuming you can get 50% lipid content (i.e. believe the algae research numbers), that's equivalent to 33,000 gallons per acre per year.

The next step will be to increase the number of reactors to 100, add some optimization and measure again.

Vertigro uses fairly common centrifuge extraction techniques, so I'm guessing similar numbers could be used as estimates for now.

I'm sure they don't have COA yet.

So, the reality is that they're in alpha test and quite a while from getting real world data in order to calculate the kind of metrics you're asking for. By the way, I totally agree that these are key questions to be answered.

Switching to the expert opinions that were cited...

Both are well respected in their field, but walking around with some old school information.

Dr. Benemann argues that ponds are the way to go because they are much cheaper. He dismisses entire spectrums of possibilities, such whether closed loop systems could ever produce significantly higher yields than ponds, or if new micro algae organisms could possibly be discovered or optimized in less than 10 years.

One of the biggest problems with this view is that ponds cannot control the airborne algae and other contaminants, which in turn take over the feedstock growth cycle. Nor can ponds control the temp or pH very easily. As a result, ponds cannot match the production rates of closed loop reactors, they are more labor intensive, and, while it might not be a huge issue, require a lot more land.

Besides the above, what's missing in Dr Benemann's and's analyses is that the cost of many of the bioreactor's components have been commodized, innovations have occurred in temp control, micro filtration, etc., and more research in general has been completed.

Also consider that a high percentage of the byproducts can be easily made into high protein animal feed, processed into fertilizer, or fermented into ethanol or butanol. Yield helps here as well.

Lastly, algae can sequester up to 90% of it's dry weight in CO2. As we evolve into cap and trade, the ability to remove literally tons of greenhouse gases can be monitized.

Put this altogether and it means that the ROI of the bioreactor model has changed considerably in 2008.

The initial cost of the Verigro hardware is estimated at $1M USD for a 1-acre plant. Obviously land, greenhouses, plumbing, construction costs, etc. are incremental.

Given what it is known and what has changed, it's worth watching Vertigro closely, even if they don't respond to inquiries well...

Thanks Daryl, We will wait and see............................


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