Minimizing Algal Cultivation Input Costs
by Dr. Mark Edwards
The 2009 ABO Algal Industry Survey provided valuable insight about our emerging algal industry. The 222 respondents, about half of whom were scientists, were positive about the industry’s future and optimistic about algae’s potential to help solve critical social and economic problems. The ABO survey and report by Mark Edwards, Arizona State University, Elizabeth Willett, Mars Symbioscience, and Mary Rosenfeld, Executive Director, Algal Biomass Organization is available from the ABO.
Most industry participants believe algal production will focus on four biofuels: biodiesel, jet fuel, ethanol and gasoline. Microalgae appear to be the favored feedstock, although some producers plan to use marine micro or macroalgae (seaweed) or genetically modified strains. Most growers will use carefully selected algal strains from natural settings while others will choose high lipid species from algal collections or their own genetically modified strains. Algal producers are experimenting with a diverse set of production models with about a third using open ponds, another third using semi-closed ponds or polycultures. About 30% of producers plan to use closed or semi-closed systems. About 40% indicated producers will cultivate algae all over the earth, with the mid-latitudes and tropics being the favored production areas.
Production models seem to vary based on the production objectives, type of feedstock and location. International producers tend to use open ponds while many U.S. producers are planning to use closed or semi-closed cultivated algal production systems. International producers are using naturally occurring algae species while some U.S. producers are planning to use a combination of species and selection and genetically modified organisms that maximize the production of algal oil or other targeted products.
The industry’s most critical input challenge is total cost. The producers in the nascent algal industry are searching for financing based on total cost of production. Total cost is very difficult to measure when very few businesses growing algae are producing at scale. Earthrise Nutritionals, for example, produces 500 tons of spirulina each seven month growing season using 30-year-old technology. Even If Earthrise made their production costs public, other producers using different technology, growing dissimilar species in various locations, would not be able to reliably estimate their costs.
Total cost for algal production will diminish with the learning curve associated with experience. However, initial costs are substantial and several public business plans show research facilities that cost $10 million and production facilities at $25–$50 million. A simple average sized, 50 million gallons a year ethanol plant costs on the order of $250 million (about five dollars per gallon of production). Algal biofuel production plants will certainly have similar cost structures.
Water represents one of the most critical variables in algal production. Algal cultivation in open ponds or runways loses roughly as much water to evaporation as field crops. Alfalfa grown in Arizona consumes 11 acre-feet of irrigation water, which is nearly four million gallons/acre. Water scarcity and cost are motivating algal producers to explore closed and semi-closed cultivation systems to minimize evaporation. Other algal producers are planning to use waste or brine water but each add new issues and cost to production. Fortunately, oceans of brine water sit under the southwestern US deserts. Several lines of algal research are examining cultivation methods that diminish the net water requirement.
Nutrient costs are also an important variable that is likely to increase. Business models that planned to use common field crop N-P-K fertilizer soon recognized that the residual nutrients were often more valuable than their coproducts. Nutrient cost is the reason that the algae to energy business models have failed. The cost of nitrogen fertilizer follows the price of natural gas because 90% of nitrogen fertilizer comes from the energy used to produce it. Potassium supplies are sufficient but the energy and dollar costs of potassium rock extraction from mines 3000 feet underground continue to rise.
Many scientists think that phosphorus will become unavailable or unaffordable, possibly within the next generation. The price of phosphate fertilizer increased 700% in a recent 14 month period although the market prices came down in step with oil prices. Arizona State University has established a Sustainable Phosphorus Initiative led by James Elser, Mark Edwards and Dan Childers. The SPI is designed to build a credible scientific consensus on the dimensions of phosphorus sustainability and find interdisciplinary solutions for phosphorus conservation, recycling and sustainable applications.
One innovative line of research pursued by ASU professor Roberto Gaxiola is to discover the biological pathway for phosphorus consumption. Robert’s goal is to develop plants that consume less net phosphorus. He is also exploring mechanisms that enable plants to recover phosphorus currently not bioavailable to plants because they are locked in complex molecules in the soil. Professors Roger Ruan at the University of Minnesota, Bruce Rittmann and Ray Curtis at ASU, Tryg Lunquist at Cal Poly and many others are working on methods for phosphorus recovery in municipal waste streams.
My favorite sustainable solution for phosphorus and all the algal nutrients and micronutrients required to cultivate algae is ZooPoo. ZooPoo is a proposed destination green ecological exhibit where animal manure, botanical waste and zoo trash are ground up and used to feed algae. ZooPoo will recover, recycle and reuse the substantial energy and nutrients in the zoo waste stream for feed, vitamins, minerals and medicines. Animal waste contains roughly 60% of the energy in the plant before it went through the animal. Even better, animal waste retains 80% of the nutrients and 95% of phosphorus value originally in the plants. Nutrient phosphorus is absorbed readily by growing animals in their bones, teeth, eyes and hair. Most of the dietetic phosphorus flows through adult animals after they have used it for energy and multiple metabolic purposes.
ZooPoo is designed to educate the next generation in sustainable food and energy production and attract farmers who could put similar systems on their farms to recycle their waste streams. ZooPoo demonstrates a new form of farming called “abundant agriculture” where farmers produce carbon neutral food and energy using non-fossil inputs; sunshine, CO2 and wastewater. The energy necessary for moving water and extracting algae come from renewable sources – wind, solar or geothermal.
Each ton of algae consumes 1.82 tons of CO2, which makes carbon dioxide a potentially high cost input. Numerous business plans show their algal production facilities co-located with power or manufacturing plants where they can use the waste CO2. A recent examination of power plants in the US, India and China found that most facilities have insufficient available land nearby. In addition, coal plumes carry considerable sulfur (which can be fatal to many algal varieties) and heavy metals including arsenic, mercury, lead and cadmium. Algae tend to bioaccumulate heavy metals which can be problematic for coproducts such as food, feed, fertilizer, nutraceuticals or pharmaceuticals.
Fortunately, Canada recently announced a project to build a pipeline to recover CO2 from a cement kiln, which produces much cleaner CO2 than coal-fired power plants. The St. Mary’s cement plant is building a $4 million closed cultivated algal production system (CAPS) with 1500 square foot capacity operated by Pond Biofuels. The demonstration facility will feed the CO2 to a strain of algae sourced from the nearby Thames River and produce algae which will be burned for electricity or harvested to produce liquid biofuels for the plant truck fleet. The plant, a subsidiary of Brazil’s Grupo Votorantim, is seeking alternatives to potential payments of up to $30 per ton of CO2, which is estimated to add 15% to the cement price.
Land costs are likely to be a modest cost in many algal production models. Producers are planning to use low value land that has no or few alternative uses. For example, Algae Biosciences, led by CEO Andrew Ayers, plans to produce algae in the Holbrook Arizona using a pristine brine aquifer. The company has innovated with a hybrid production model that uses closed CAPS in a greenhouse for inoculation and covered runways for production. The land sits over the brine aquifer and few weeds grow because it is high desert and the soil salts are too high for terrestrial plants. Holbrook sits at 5,500 feet and Algae Biosciences has calculated that the cost of heating the greenhouse in the winter for algal production is less than the cost of cooling the production system in Phoenix at 1,100 feet.
Algal producers are using an assorted set of production strategies and tactics to manage the complex set of input costs. Managing these input costs and finding sustainable production models in many different locations and for diverse applications will enable the algal industry to have a successful path forward.