Anaerobic digestion is a process in which bacteria consume organic matter in the absence of oxygen. This process is completely natural and can be found widely in nature. Examples include the rotting of wood in a forest, production of &ldquo;swamp gas&rdquo; in bogs, and the decay of any organic matter. This same process has been used indirectly for years in municipal and food-processing wastewater treatment systems as a means to conveniently reduce organic waste. Now, anaerobic digesters can not only reduce organic wastes, but also produce a renewable, low- to medium-grade fuel gas, or biogas that can be converted to power and heat.
 An anaerobic digester is simply an enclosed container that holds the waste material, the microorganisms, and the environment they live in while excluding oxygen. The digester can be of almost any size, from only several hundred to several million gallons in volume. The digester is really a system of equipment components including solids handling equipment, liquids handling equipment, and gas handling equipment. Key properties used to describe the particular attributes of an anaerobic digester are volume, hydraulic residence time (HRT) and solids retention time (SRT). The HRT is the numerical value, usually expressed in days a volume of water will reside in the digester. Similarly, the SRT describes the numerical value, again, usually in days, that solids will reside in the digester. The HRT and SRT characteristics of the digester are set to achieve the desired treatment of a water stream and simultaneously achieve optimal conversion of the organic matter to biogas.
 Digesters must be maintained in order to keep the digester functioning at design level. This entails feeding the organisms; removing materials indigestible by the microorganisms; and maintaining appropriate temperature, water chemistry and nutrient levels.
 Oftentimes, the food must be presorted in order to remove items that would either interfere with digester operation or poison the broth. Undesired items include objects containing poisonous materials, such as batteries, herbicides, disinfectants and other toxic chemicals. Additionally, metal items such as nails and small pieces of scrap metal should likewise be removed as they may damage pumps and other mechanical components in the system.
 The biogas produced in such a system has many uses. Frequently, the biogas is utilized to operate a modified diesel generator set. In this way, a waste material is conveniently transformed to readily usable electrical power. Over the past several years, federal and state incentives have stimulated the use of anaerobic digestion systems at dairy farms, where a large proportion of the electrical power used in production of dairy milk is self-generated from digestion of manure produced by the herd. The Energy &amp; Environmental Research Center is working on new and exciting uses for biogas. This includes generation of both renewable hydrogen and renewable ammonia from biogas. The EERC is presently working on moving recent laboratory-scale advances into distributed-scale production units for both hydrogen and ammonia. This effort will result in production of future renewable fuels and fertilizers from common waste materials. Author: Paul Pansegrau Research Scientist, EERC (701) 777-5169 <a href="mailto:ppansegrau@undeerc.org">ppansegrau@undeerc.org</a>

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Anaerobic Digestion ABC's

The California legislature passed AB 32 and former Gov. Arnold Schwarzenegger signed the Global Warming Solution Act of 2006, which aims to reduce current greenhouse gas (GHG) emissions to 1990 levels by 2020. The law requires the Scoping Plan, which was approved on Dec. 12, 2008, and provides a road map and timeline for actions to reduce GHGs in California via regulations, market mechanisms and other actions.
 One Scoping Plan item was cap-and-trade regulation, which requires GHG emitters to lower emissions by using allowances for GHG&rsquo;s that are reduced over time requiring either a reduction, the purchase of allowances or offsets from other sources. In preparation for this regulation, a number of industries have also been required to report their GHG emissions.
 As the regulation stands, electrical generators and large industrial facilities would be subject to cap and trade. For most energy generation facilities, the calculations of emissions is based on fossil fuel combustion and any process or vented emissions, as reported under a mandatory reporting rule.
Emissions calculations for biomass facilities, and related compliance obligations are more complicated. Combustion emissions from biomass-derived fuels (except biogas from digesters) from the following sources do not have compliance obligations: sold waste materials; waste pallets, crates, dunnage, manufacturing and construction wood wastes, tree trimmings, mill residues, and range land maintenance residues; all agricultural crops or waste; or wood and wood wastes that follow specific practices.
 In California, the approval of a regulatory action like cap and trade generally requires compliance with the California Environmental Quality Act, which in turn requires an environmental review. In this instance, CARB drafted an environmental document that purportedly reviewed the potential adverse effects on the environment due to the GHG cap-and-trade regulations, including a review of potential alternatives. The document drafted by CARB was the equivalent of an Environmental Impact Report under CEQA.
 The regulation and the environmental document were provided for public review and a hearing in December, where a number of supporters and many others expressed that the environmental document and the regulations were not sufficient.
 After conditional approval in December, the AB 32 rulemaking process for cap and trade encountered a setback when the lawsuit brought by several environmental groups successfully argued, at the Superior Court level, that the environmental document was deficient at addressing all of the relevant alternatives. The court after providing a tentative order issued a final writ of mandate that arguably prohibited the CARB from continuing to work on the regulations.
 CARB appealed the decision and continued to work on the regulations, which prompted objections from the original petitioners. On June 6, the San Francisco Superior Court at petitioners urging issued an order that criticized CARB for continuing to work on AB 32 regulations despite the injunction issued in the CEQA case, and ordered the head of CARB to address these issues or face sanctions. It should be noted that there is a technical legal argument that depending on the form of the writ, the appeal may, on its own have stayed the injunction.
 In a strange turn of events, it was discovered that prior to the Superior Courts June 6 order criticizing CARB, the court of appeals had temporarily stayed the trial court&rsquo;s injunction that prevented the CARB from implementing its cap-and-trade program.
 Thus the parties will argue before the appeals court on whether to maintain or lift the stay while the appeal is pending. In our view, one issue the appeals court should be looking at is whether allowing CARB to go forward could foreclose alternatives or mitigation measures that could otherwise be considered when the revised environmental document is finalized. Since the main focus of the new document is alternatives, the further promulgation of regulations could foreclose alternatives.
However, if the implementation of the rules occurs after the environmental document is released, one could argue that the alternatives discussed may not have been ruled out.
 Finally, if the rulemaking is stayed or delayed for much longer, the scheduled 2012 start of regulation may have to be postponed as well. In mid-June the appeals court will hear arguments on the issue of the stay and the schedule should become more definitive. Authors: Lee N. Smith Stoel Rives LLP <a href="mailto:LNSMITH@stoel.com">LNSMITH@stoel.com</a>

California Cap-and-Trade Wars

Martin Engineering offers online training to improve conveyor operating efficiency Martin Engineering has added an online course to its library of Foundations training programs that teaches personnel to make the operation and maintenance of belt conveyors cleaner, safer and more productive. The company is expanding its workshop series into three customizable training programs, with the Operations &amp; Maintenance Seminar available as an online course. The seminar takes an in-depth look at methods to improve the safety, performance and payback of belt conveyors by controlling fugitive material and improving system efficiency. This online training is for anyone concerned with operating and maintaining belt conveyor systems. Discussion topics include material-handling basics, conveyor safety, belt alignment, belt cleaning, transfer point improvement, belts and splices, leading edge technologies and dust management. After studying these topics, staff and operations will benefit by improving safety, justifying and validating investments, and increasing performance and profitability. To sign up, go to www.martin-eng.com/services/foundations-training-program.
 Cashco announces new leadership Cashco Inc. has promoted Clint Rogers to general manager from his previous position of executive vice president of sales, marketing and engineering. Rogers will be responsible for all activities related to the valve division, which includes manufacturing, purchasing and finance, in addition to his previous duties. Rogers&rsquo; career with Cashco has spanned nearly 18 years, and his leadership experience includes various positions. Since 1998, when he assumed a full-time role with Cashco, he has expanded Cashco&rsquo;s global market by building an international sales team and assisted with product line enhancement. Most recently, he was instrumental in the development of the Cashco tank vent product line, which includes pilot-operated, weight-loaded and spring-loaded vents. Cashco Inc. has also promoted Dimity Ankerholz to assistant sales manager/marketing manager, expanding on her previous role as marketing manager. Ankerholz will oversee the daily activities of internal and outside sales and assist in the long-term objectives and planning for the valve division. Ankerholz began her career with Cashco in December 1998 as a research specialist in the valve division.
 Fecon hires technical service adviser Fecon Inc. has hired Mike Karre as the newest addition to its product support team. Karre&rsquo;s responsibilities will include traveling within Fecon&rsquo;s dealer network to provide technical support, assist with new machine deliveries and start-ups. Karre joins Fecon with 10-plus years of service experience. Most recently he worked for a Komatsu dealer as a field service technician, completing full machine repairs on construction equipment plus maintenance on forestry grinders and coloring machines.
 Covanta plant receives Facility of the Year award The Alexandria/Arlington Resource Recovery Facility in Alexandria, Va., has been named the 2011 Large WTE (waste-to-energy) Facility of the Year in the combustion category by the American Society of Mechanical Engineers in recognition of its strong environmental and safety performance record. The award was announced at the 19th Annual North American Waste-to-Energy Conference held in Lancaster, Pa. In addition to its outstanding environmental and safety performance, the award recognizes Covanta Alexandria/Arlington&rsquo;s technological innovation and its many contributions to integrated waste management. Covanta Alexandria/Arlington processes 975 tons of municipal solid waste per day to produce up to 23 megawatts of renewable energy and recycles approximately 7,000 tons of metals annually.
 Renewable energy alliance elects board members, officers Patrice Lahlum, of Fargo, N.D., has been re-elected chair of the North Dakota Alliance for Renewable Energy. Lahlum, a consultant to the Great Plains Institute on biomass programs, was re-elected at the NDARE annual meeting in Bismarck. Other re-elected officers include Kim Christianson, Great Plains Energy Corridor, vice chair, and Jocie Iszler, communications consultant, secretary-treasurer. Other board members include Al Christianson, Great River Energy; Mindi Grieve, Environmental Law &amp; Policy Center; Terry Goerger, farmer; and Mike Williams, Greenfields Energy. Both Lahlum and Grieve were also re-elected to three-year terms on the board of directors. NDARE is a diverse membership-based advocacy organization that works with citizens, industry, government, interest groups and educators to promote the development and use of renewable energy, including biofuels, biomass and wind energy, as well as the widespread adoption of smart energy efficiency and conservation practices.
 Palmer and Christopher join Michael Best &amp; Friedrich Michael Best &amp; Friedrich LLP announced that Todd E. Palmer has joined the firm as a partner in its Madison, Wis., office. Palmer will lead the Environmental Law Group within the Firm&rsquo;s Energy &amp; Sustainability Industry Team. Throughout his 19-year career, Palmer has focused on environmental law and in particular on assisting clients with the complexities of the Clean Air Act. He has successfully represented a variety of industries including paper manufacturers, printers, agricultural operations, petroleum refineries, recyclers, electric utilities and trade associations. He has earned a reputation as an innovative problem-solver by developing successful, cutting-edge regulatory strategies for clients. The law firm also announced that Mary Ann Christopher has joined as a partner in its Milwaukee office. Christopher will join the Firm&rsquo;s Energy and Sustainability Industry Team and the Transactional Practice Group and has successfully represented clients in complex commercial business transactions, mergers and acquisitions, and project finance, primarily in the development, acquisition, sale, finance, operation and leasing of major infrastructure and industrial projects, equipment assets, and related facilities, with a particular emphasis on the renewable and clean energy sectors such as wind, biomass, biofuels, hydrothermal and nuclear.
 Buchanan Ingersoll &amp; Rooney expands energy practice Buchanan Ingersoll &amp; Rooney PC is opening an office in Southpointe, Pa., to accommodate the growth of its energy practice, which includes the oil and gas (Marcellus shale), coal, renewable energy and environmental sectors. The office will be used by lawyers who have been spending an increasing amount of time with clients in Canonsburg, Pa. Buchanan expects the office will be utilized by lawyers and lobbyists who have clients there. Buchanan's Energy Section includes more than 80 lawyers and government relations professionals whose practices cover a broad range of energy-focused legal and lobbying services from litigation, corporate transactions and leasing to environmental and regulatory issues.
 Biomass Secure Power appoints CFO Biomass Secure Power Inc. announced that Murray Swales has been appointed chief financial officer of the company. Swales earned a chartered accountant's designation from the Institute of Chartered Accountants, British Columbia. He has been involved with public companies and their operating and financial reporting requirements for more than a quarter century, and has served as an officer and/or director of several reporting issuers since 1980. He has diverse business experience, gained as an entrepreneur, as a partner in domestic and international accounting firms, and in senior management positions with various public and private companies.
 NEFCO names Grace VP of marketing and environmental affairs NEFCO has promoted Virginia M. Grace to vice president of marketing and environmental affairs. With more than 25 years in the environmental field in the public and private sectors, and having served as the business development manager at NEFCO since 1996, Grace brings experience with the development, environmental compliance and product marketing for all of NEFCO's biosolids projects. As president of the North East Biosolids &amp; Residuals Association since 2010, Grace also plays a key policy development and leadership role in the biosolids industry. Grace will develop strategic alliances and growth opportunities for NEFCO and will be responsible for management of all company marketing efforts. She will also have executive oversight and responsibility for the environmental affairs of the company.
 Equilibar regulator solves galloping biogas engine speed The Gloversville-Johnstown wastewater plant in upstate New York serves 25,000 residential customers and 30 industrial and commercial customers. The unsteady flow of methane from the digester to two 350 kilowatt (KW) Caterpillar gas engines driving generators resulted in surging engine rpm, something not acceptable in this application. An Equilibar back pressure regulator was installed to route excess gas back to the gas holder. Tests have shown that the system can be smoothly throttled up and down the load range including taking one engine off line or running both engines wide open (700 KW) with no loss of methane pressure or engine speed control.

ONLINE OPERATION: Martin Engineering is offering online workshops to help improve safety, performance and payback of its conveyors. 

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Mary Ann Christopher brings her expertise in complex commercial business transactions and project finance to her new position as partner with Michael Best & Friedrich. 

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Todd E. Palmer will use his experience in environmental law and assisting clients with the Clean Air Act in his new position at Michael Best & Friedrich.


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Business Briefs

The U.K.&rsquo;s National Centre for Biorenewable Energy, Fuels and Materials has recently released a report that finds using biomass crops can play a valuable role in on-farm anaerobic digestion (AD).
 The main point of the report, which was released in May, is that anaerobic digesters operate more efficiently when biomass crops are used along with slurry and manure. &ldquo;Biomass that has already been digested once, for example in a cow, will have a lower yield than biomass that hasn&rsquo;t been digested before,&rdquo; explains Matthew Aylott of the NNFCC. &ldquo;In general, adding crops to an anaerobic digester will increase biogas yields because there are more sugars and proteins in the crop biomass for microorganisms to consume than in slurry or manure.&rdquo;
 Additionally, the report finds that AD can offer farmers a guaranteed market for their surplus crops or residues, a chance to use different cropping rotations and the opportunity to diversify their income. Crops examined in the report are those considered most appropriate for production in the U.K. as supplementary feedstock for AD, Aylott says. These include corn and grass silage and whole crop cereals such as wheat. Farms vary from small- to average-sized dairy farms (130 cows with followers), medium-scale (250 cows with followers) and large-scale (large, mixed farm or collaborative venture assuming 500 dairy cows with followers housed year-round).
 The most attractive option for each farm varies according to farm size, according to Aylott. &ldquo;At small scale, the option generating the most favorable internal rate of return under the U.K. electricity feed-in tariff system, which offers AD plants a fixed income for every kilowatt hour of electricity generated, is the slurry-only plant, primarily due to the cost of feedstock impacting the overall profitability.&rdquo;
 However, if the aim is to increase energy output to warrant heat and power generation, then some crop material should be added, he says. Ideally that would be grass or maize silage, as slurry alone has such a low energy value.
 At medium scale, the most attractive economic option is again the slurry-only model, followed closely by the 70:30 slurry-to-crop ratio. &ldquo;This example shows that inclusion of a relatively small volume of crop material can increase energy output tenfold for only three times the capital cost,&rdquo; Aylott says. &ldquo;Although the cost of production and the energy yield remains constant, the capital and operational costs do not increase proportionate to the scale of the plant.&rdquo;
 The most attractive option for large-scale farms is a higher crop-to-slurry ratio of 60:40, while remaining under the 500-kilowatt threshold for the higher feed-in tariff payment. This maximizes economic returns and energy output, Aylott says. He notes that when the report was composed, the U.K.&rsquo;s Renewable Heat Incentive details were not available and therefore have not been taken into consideration.
 While the benefits can be numerous, using crops in AD processes doesn&rsquo;t come without challenges, the report recognizes. &ldquo;A high proportion of crop material, typically above 50 percent inclusion, would require different AD technology due to the high dry matter content of the feedstock mix, or for water to be added or recirculated through the system,&rdquo; Aylott says. &ldquo;This increases the size of the digester tank(s) required, and as a result increases investment costs. Although this is technically possible and such plants are already developing, it is clearly not the intention of the feed-in tariffs or RHI to encourage wide-scale deployment of crop-based plants, which are more common in countries like Germany. As a consequence, the tariffs are not currently optimized for energy production.&rdquo;
 The research is now being fed back to the U.K. Department of Energy and Climate Change to support policy development on AD, including the current review of the feed-in tariffs support scheme.

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ADDING BIOMASS: The methane yield ranges for a number of possible crop feedstocks.


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Report says biomass crops can enhance anaerobic digestion. 

Adding Value to AD 

In light of the increase in demand for wood pellets, it is no surprise that predictions are outlining woody biomass as the next commodity to be traded on the open market.
 Biomass demand for bioenergy applications is expected to increase, especially in Europe and particularly for wood pellets. &ldquo;It&rsquo;s clear that with incentives in place and the policies in play, that bioenergy is going to be an increasingly important part of the renewable portfolio in many European countries, especially U.K.,&rdquo; says Cormac O&rsquo;Carroll, president of P&ouml;yry Management Consulting in London.
 O&rsquo;Carroll emphasizes that for woody biomass to become a commodity, demand needs to be big enough to support a commodity trading platform. And it looks as though the hundreds of megawatts proposed in the U.K. will help that along. The country can only provide itself with 10 million to 12 million metric tons of sustainable biomass each year, falling short of the 50 million metric tons that will be necessary if the multiple proposed biomass plants are developed there. O&rsquo;Carroll predicts, however, that only a portion of those proposed projects will come to fruition. &ldquo;Clearly, if even a substantial portion of them goes ahead, there will need to be significant imports of biomass to supply these plants,&rdquo; he says. &ldquo;Then they can come from North and South America, certainly, and I think quite a few pellet plants being developed in America are focusing on Europe and in particular the U.K.&rdquo;
 Demand is one important driver of commodity derivative market development, but other factors come into play also, such as volatile market pricing that allows hedging. &ldquo;When we look at pellet pricing, we see that it is quite volatile,&rdquo; O&rsquo;Carroll says. Liquidity is another important element, as well as the number of people trading the material. &ldquo;There are a lot of pellet plants out there and a lot more planned,&rdquo; he says. &ldquo;There are also a lot of pellet consumers on the bioenergy side and more and more entering the business.&rdquo;
 If wood pellets were to become a commodity, it would make the market more efficient and would make moving forward with bioenergy investments much easier, especially from the perspective of power utilities, O&rsquo;Carroll explains. &ldquo;They&rsquo;re used to having a working commodities market for their feedstocks, be it gas, oil, coal.&rdquo;
 For the forestry industry, it could shift the environment surrounding biomass agreements from its traditional bilateral focus. &ldquo;With the emergence of bioenergy, certainly, we see a lot of the forest industry players and forest owners starting to rethink their approach a little bit and starting to think about longer-term contracts and even starting to think about how they might take advantage of the increasing commoditization of biomass,&rdquo; O&rsquo;Carroll says. For forest owners, commodity status for wood would mean another market for their products, but industries using wood now, such as pulp and paper, would most likely not benefit. &ldquo;They may not like to see much of a commodities market develop in biomass because that potentially makes their life more difficult,&rdquo; he says.
 But the scarcity of supply to satisfy growing demand points to woody biomass becoming a global commodity in the near future. O&rsquo;Carroll predicts it within the next few years.

Cormac O'Carroll, president of PÃ¶yry Management Consulting, believes that woody biomass will become a global commodity within the next few years.

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As demand increases, wood pellets could be the next global commodity.

Wood: The Next Global Commodity?

I wanted to write something about the budget battle going on in Washington and attempts to cut funding for the Biomass Crop Assistance Program, but the situation is so fluid that anything I write would be passe within 24 hours, or less.
 I do, however, urge members of Congress to keep in mind when they discuss eliminating money for developing biomass projects, the amount of money the U.S. spends to subsidize and to import fossil fuels, not to mention cleanup costs for accidents such as the oil spill in the Gulf of Mexico.
 Now, on to bigger and more pleasant topics like biomass combustion and gasification, which is the focus of this month&rsquo;s magazine.
 We were fortunate that this issue coincided with the construction startup of Jim Taylor&rsquo;s waste-to-energy facility in Montgomery, N.Y. Taylor is a brave and patient man, after having to deal with permitting issues that lasted for several years and the threat of losing a federal loan guarantee worth $100 million.
 Thankfully, the loan guarantee was restored and, as you can see by the photos in Associate Editor Anna Austin&rsquo;s feature &ldquo;Full Steam Ahead,&rdquo; dirt work has begun on the site. The photos were taken at the end of May so construction is probably farther along by now. You can read more about Taylor and the gasification system he will be utilizing in his New York facility starting on page 22.
 Check out Austin&rsquo;s &ldquo;Cleaner and Leaner&rdquo; feature starting on page 30 if you want to find out how the nation&rsquo;s largest waste-to-energy companies&mdash;Covanta Energy and Wheelabrator Inc.&mdash;reduce emissions and make their plants more efficient.
 Associate Editor Lisa Gibson delved into the biomass situation in India and its efforts to use gasification to power rural areas in her feature called &ldquo;Biopowering India&rdquo; on page 42. While the country already uses much of its bagasse and rice husks for energy, rice and cotton straw, coconut husks, bamboo waste and municipal solid waste offer opportunities for further development.
 Gibson also wrote about a National Renewable Energy Laboratory assessment of biomass combustion and gasification and how it has impacted its development in the U.S. in her feature &ldquo;Inspiring Investment&rdquo; on page 36.

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From Budgets to Biomass Gasification and Combustion

As the biomass power industry struggles to recover from one of the worst economic downturns in our history, we now face another threat: a series of proposed U.S. EPA rules that endanger the continued viability of our plants and jeopardize thousands of well-paying jobs in rural America. On the minds of biomass owners, operators and developers of new biomass plants these days is boiler Maximum Achievable Control Technology and related solid waste rules, proposed EPA regulations that could seriously raise costs for biomass facilities that plan to use available biomass fuels other than traditional wood waste materials.
 If ever there was a case for congressional intervention, this is it. Mired in litigation for years, EPA promulgated draft rules in 2010 which, by the agency&rsquo;s own admission, were based on fundamental misunderstandings about boiler technology and the benefits of various biomass fuels. Instead of going &ldquo;back to the drawing board&rdquo; to find a better, science-based solution, EPA was forced by the court to finalize the rules under an unreasonably short timeline.
 In a partial win for the biomass industry, the EPA agreed on May 15 to stay the so-called &ldquo;boiler and commercial industrial solid waste incinerator (CISWI) MACT.&rdquo; However, the EPA stay remains problematic for two reasons: First, the stay does not affect the solid waste rule, which wrongly classifies millions of tons of valuable biomass as &ldquo;waste&rdquo; and subjects our facilities to overly cumbersome and needless regulations. Second, the EPA stay is at risk of legal challenges from environmental organizations. If successful, these challenges could force the private sector to comply, even if EPA believes&mdash;as the agency does&mdash;that the regulations need more work.
 Neither scenario bodes well for the industry, but what is truly unfortunate about boiler MACT and related rules is that&mdash;although the EPA seems to be trying to do the right thing by biomass&mdash;these rules stand to have a serious impact on our industry with little gain for the environment.
 If the EPA&rsquo;s rules are allowed to proceed unchanged, they will result in what many experts estimate will be billions of dollars in needless changes to industrial facilities. Many existing biomass plants will simply shut down, adding to the growing number of facilities unable to compete with fossil fuel power. New facilities will be placed on hold, chilling renewable energy investment in areas of the nation in dire need of such investment. And, at a time when the nation is promoting the use of domestically sourced renewable energy like biomass, many biomass fuels would be landfilled, contributing to the clutter and emitting dangerous gases like methane.
 The biomass industry needs Congress to intervene now in order to prevent costly regulations that have no public health or environmental benefit. We urge Congress to enact legislation that delays implementation of the rules for at least two years, which is the time believed necessary for EPA to properly consider all of the information necessary to adopt common sense rules. We also urge Congress to require any rule to be based on available technology and to propose standards that are actually achievable at a reasonable cost, and to facilitate&mdash;not hinder&mdash;the use of a wide variety of biomass fuels.
 We need Congress to act as soon as possible to ensure that the boiler MACT and related rules that are enacted will be responsible and won&rsquo;t hinder the growth of our industry. Please contact your member of Congress by phone, email or snail mail&mdash;or all three&mdash;to emphasize the importance of acting now to save renewable energy and jobs in your area. Author: Bob Cleaves President and CEO, Biomass Power Association <a href="http://www.USABiomass.org">www.USABiomass.org</a>

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MACT Rules Threaten to Derail Biomass Industry

Following the devastating earthquake and tsunami in Japan, the world has kept a watchful eye on nuclear power. While some governments, including the Obama administration, maintain that the power source is necessary, others are beginning to erase it from their portfolios, few as quickly as Germany. The country&rsquo;s Environment Minister Norbert Roettgen wants to speed up Germany&rsquo;s nuclear exit, focusing on early implementation of the 2010 Energy Strategy. The country aims to shut down all nuclear power stations by 2022, with only the three newest being permitted to operate that long.
 Parallel to the gradual departure from nuclear power, the percentage of energy generated from renewables will rise consistently, according to the German government. The target is to raise the percentage from 17 to 35 percent in 2020. The government has already finalized a bill to reform the Renewable Energies law and the legislative agencies need to agree to it.
 In light of that switch, solid-fuel handling equipment manufacturer Martin Engineering has increased its interest in the German market, says Jim Turner, vice president of sales and marketing for the company. &ldquo;It&rsquo;s driving the Germans to look at a lot of different ways of producing energy in the short and long term,&rdquo; he says. &ldquo;The power has to come from somewhere and they&rsquo;re looking at biomass to be their No. 1 gap filler for power.&rdquo;
 The 2010 strategy includes reintroduction of support for low-emission woody biomass gasification boilers, with prerequisites for emission values. The country has support in place for pellet boilers and wood chip installations that remained unchanged in the 2010 strategy.
 With an increasing adoption of biomass energy in the U.S. and Europe, Martin Engineering has investigated the intricacies of biomass handling systems, noting their differences with traditional fossil fuel handling systems, Turner says. That research is proving advantageous in a Germany that&rsquo;s intent on more ecofriendly energy.

Germany expedites elimination of nuclear power and increases focus on biomass.

Regeneration in Germany

The Bioenergy Producers Association has been trying for the past six years to pass legislation to make California friendlier toward bioenergy projects, particularly biomass gasification projects. California law, however, contains a scientifically inaccurate definition of gasification, requiring the process to result in zero emissions, the BPA says.
 Attempts to correct the definition have been repeatedly blocked by a minority of democratic legislators on the state&rsquo;s environmental committees. As a result, many companies have located their bioenergy projects in other states.
 &nbsp;At the end of 2010, there was some traction in rectifying the situation, as the California Department of Resources Recycling and Recovery (CalRecycle) issued a finding that Canada-based Plasco Energy Group, which is planning to build a waste-to-energy facility, could meet the intent of the existing gasification definition.
 Once again, however, there are attempts to block the action, this time from the office of the Senate's President Pro Tem Darrell Steinberg.
 On behalf of Steinberg, Chief Policy Advisor Kip Lipper sent a letter to the state agency and the California governor&rsquo;s office, demanding a rescission of the Plasco Energy ruling.
 In response, David Roberti, who served 13 years as president pro tem of the state senate and is currently president of the BPA, wrote a letter to Steinberg describing the action as a &ldquo;frontal attack&rdquo; on the bioenergy industry. &ldquo;It is clear that CalRecycle&rsquo;s ruling on this issue, reached after long discussion, was the correct opinion,&rdquo; Roberti states. &ldquo;Legally, there could be no other interpretation, because it would never be the intent of the legislature to pass a law with which no one can comply.&rdquo;
 Roberti points out that no refinery of any type or size produces zero emissions, and that the standard is not required of any other manufacturing facility. &ldquo;[The standard] has discouraged, indeed has prevented, this industry from attempting to operate in the state.&rdquo;
 The Lipper letter is a damaging signal to the multibillion dollar biobased technology industry and indicates the state is not interested in what it can contribute to California&rsquo;s economy, Roberti says. Nor does it want the industry&rsquo;s help in meeting California&rsquo;s energy goals, including the renewable portfolio standard of 33 percent. Plasco Energy intends to comply with all applicable state and local laws and legitimate environmental standards in its Salinas project, he adds.
 Roberti says using post-recycled waste streams as feedstock for renewable energy production is universally recognized everywhere but in California and that the short-sighted view of a minority of Democratic party members is becoming the subject of ridicule. &ldquo;In a free market economy, the waste-to-clean energy industry has just as much right to be permitted and operate under California&rsquo;s stringent environmental laws as any other,&rdquo; he writes. &ldquo;National security, the economy, energy independence and an improved environment demand this.&rdquo;
 In early May, Roberti received a response from Steinberg, emphasizing that current law does not erect any unique or specific barriers to the construction or operation of gasification facilities. &ldquo;There are no restrictions in law especially applicable to bioenergy or gasification facilities that do not apply to other fuels and energy facilities,&rdquo; he writes. &ldquo;Rather, the supporters of these technologies wish to be accorded elevated statutory treatment currently reserved for activities such as recycling and renewable energy, which the legislature and past governors have held are unique environmental goods.&rdquo;
 Jim Stewart, chairman of the BPA, says Steinberg&rsquo;s comments are refuted by the fact that the waste gasification-to-biofuels/electricity industry has virtually abandoned California, and by the scientifically inaccurate definition of gasification in statute that has caused biobased technology providers and their investors not to risk capital investment in the state. &ldquo;Their letter and demand for rescission of the Plasco Energy ruling has indeed been taken by the industry as a signal that the state's legislature is not interested in the development of advanced biofuels projects in California, nor is it sensitive to the related issues of national security, energy independence, low-cost biofuels, reduced dependence on landfills and the benefits to the environment resulting from the positive use of solid waste as a feedstock for the recycling of carbon through renewable energy production.&rdquo;

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California continues to see attempts to stymie gasification projects.

Gasification Debate in the Sunshine State 

Armed with a $5.3 million federal grant, a U.S. Forest Service Rocky Mountain Research Station laboratory in Montana will embark on a multifaceted research initiative to develop new systems for bioenergy production using wood waste and residues from forest restoration treatments.
 &ldquo;The main goal is to address what we think are some critical issues with regard to using woody biomass in the West for energy feedstock,&rdquo; says Greg Jones, principal investigator for the biomass grant and research forester with the Rocky Mountain Research Station.
 The five-year research effort includes:
 &bull; Experimental forest operations research to develop advanced feedstock logistics and improve feedstock supply chains.
 &bull; Development of new trucking and processing systems to reduce feedstock costs by improving access to dispersed forest treatment residues.
 &bull; Development of multifacility spatial models of forest biomass feedstock flow.
 &bull; Field research and modeling to evaluate the effects of biomass harvest on water resources, soil resources and forest ecosystem.
 &bull; Research and development of a gasification system for forest industry deployment.
 &bull; Product development focused on biochar soil amendments, activated carbon and liquid fuels from synthesis gas.
 &bull; Consequential cradle-to-grave life cycle analysis of all system products.
 &bull; Financial models for the gasification systems co-located at sawmills.
 &bull; Market and nonmarket economics research to quantify the costs, benefits and tradeoffs of the conversion technology if deployed in the forest sector.
 The team has been able to produce a fairly high-energy syngas, as well as biochar, from a preliminary gasification system and feedback from the forestry industry about its utilization has been encouraging. &ldquo;There is certainly interest in this industry if it&rsquo;s feasible,&rdquo; Jones says.
 Transporting and processing residue from remote areas will also be an important aspect of the research, Jones says, adding that little access for wood chippers and other equipment makes biomass harvests in those areas a challenge. &ldquo;A lot of these remote areas in our part of the world are accessible only by logging roads.&rdquo; The group will also look for areas in need of improvement in existing equipment designs, says Nate Anderson, forest researcher with the Rocky Mountain Research Station.

UNITED FRONT: The agencies and local universities collaborating with the U.S. Forest Service Rocky Mountain Research Station laboratory in Montana comprise one of only eight teams to receive funding for biomass research by the USDA and U.S. DOE. 


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Research station launches complex bioenergy research initiative.

Rocky Mountain Research

With more than 1,500 European cogeneration installations under its belt, German company 2G Bio-Energy Technologies is focusing its interests on a growing U.S. biogas market that it says represents enormous opportunity. The company already has a number of combined-heat-and-power projects in line under Florida-based technology manufacturer 2G-Cenergy, which it jointly owns with its North American management office.
 The company saw growth opportunity in the U.S. for its technology, applied in combination with all types of anaerobic digesters at landfills and with methane-generating wastewater treatment facilities, according to Michael Turwitt, 2G-Cenergy president and CEO.
 &ldquo;The U.S. is actually a very interesting and prosperous market for all renewable and energy efficiency technologies,&rdquo; Turwitt says. &ldquo;While the rest of the industrialized world has been very active implementing advanced and modern energy technologies for years, the U.S. market is just now waking up and trying to catch up. The opportunities are endless, and despite a lot of regulatory challenges (every state within the U.S. is different), the market for our products is clearly expanding.&rdquo;
 In April, Pennsylvania-based Environmental Management Group International Inc. awarded 2G-Cenergy with an order to supply a high-efficiency biogas CHP plant for an anaerobic fluidized bed digester technology at a brewery in New York, according to Turwitt. More recently, Three Rivers Solid Waste Management Authority in Pontotoc, Miss., announced it will invest $1.3 million in a 2G biogas power plant for its landfill facility. 2G-Cenergy also has modular systems under development in Massachusetts, South Carolina and Texas, and dairy farm operators have ordered 2G&rsquo;s systems for their biogas plants in Washington, Oregon and California.

The U.S.'s potential for CHP from biogas has attracted a European technology manufacturer.

Biogas Bevvy

A bioenergy buzz across Kentucky prompted more than 50 individuals representing the state&rsquo;s government, academia and bioenergy industry to embark on a multiple-stop, three-day bioenergy tour in May, transforming that buzz into some considerable enthusiasm.
 Tim Hughes, director of biofuels at the Kentucky Energy and Environmental Cabinet&rsquo;s Department of Energy Development and Independence, says the idea for the tour stemmed from some local farmers&rsquo; interest in Missouri-based Show Me Energy&rsquo;s business model, a farmer-owned cooperative that has developed a fuel densification facility. Hughes' cabinet and the Kentucky Office of Agricultural Policy jointly organized the tour.
 Show Me Energy&rsquo;s facility in Centerview, Mo., was one stop on the tour, as were a Monsanto research facility in Chesterfield, Mo., an Abengoa ethanol plant in Mt. Vernon, Ind., and Biomass Power &amp; Thermal and Biorefining Magazine&rsquo;s International Biomass Conference &amp; Expo that was held May 2-5 in St. Louis.
 &ldquo;The tour, which was really well-rounded, provided us with a good overview of the biomass industry and the issues that it faces,&rdquo; Hughes says. &ldquo;The networking was tremendous, and it gave those interested and involved in the state&rsquo;s industry an opportunity to meet and understand initiatives going on across Kentucky, and different programs available.&rdquo;
 Going into the tour, attendees all had different interests that they were hoping to pick up information about, according to Hughes. They were able to accomplish that and much more because of the diversity of information and tour locations. &ldquo;They were able to see a lot of different angles of the industry, and everyone realized there are a lot of questions to be asked about the future of the industry and what we can do as a state to move it forward,&rdquo; he says.
 Currently, Kentucky hosts a grain-based ethanol plant, two biodiesel plants and a few fuel pellet operations, Hughes says. &ldquo;We&rsquo;ve got a very strong forest industry in the state. With the resources we&rsquo;ve got&mdash;the infrastructure, roads and the state&rsquo;s location&mdash;there are a lot more opportunities down the road.&rdquo;
 Hughes said he would definitely recommend a similar trip to other states. &ldquo;It was a tremendous experience and full of value,&rdquo; he says. &ldquo;From the Abengoa plant to Show Me Energy to walking through the biomass conference trade show and seeing all of the different companies involved, as well as attending informative breakout sessions, we were able to see a little of everything.&rdquo;
 Hughes adds that a final report on the trip is being put together for presentation to attendees, the Kentucky Energy and Environmental Cabinet secretary and Kentucky Gov. Steve Beshear.

SHOW ME SITE: Show Me Energy's plant in Centerview, Mo., was one of many destinations on the biomass tour. 

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Group of 50 Kentuckians embarked on three-day biomass tour.

Biomass in the Bluegrass State

When the U.S. EPA&rsquo;s final Tailoring Rule proposal was released in January, the biomass power industry was somewhat satisfied with the three-year deferment of the permitting requirements for carbon dioxide emissions from biogenic sources.
 That would give the EPA time to ensure that greenhouse gas policies properly account for the emissions and carbon sequestration associated with biomass, a subject of heated debate among the scientific community.
 The decision to defer biomass has come under fire by some environmental groups. In April, the Center for Biological Diversity and Conservation Law Foundation filed a lawsuit against the EPA, claiming the agency doesn&rsquo;t have authority to retroactively exclude biomass facilities from the rule&rsquo;s scope.
 In a move to protect the interest of its members, David Tenny, president and CEO of the National Alliance of Forest Owners, has filed a motion to intervene. &ldquo;We agree with the direction EPA is going, revisiting the Tailoring Rule,&rdquo; he says. &ldquo;In this case, the organizations that have filed suit have opposed what the EPA is proposing to do, and that&rsquo;s not usually done through a lawsuit unless it is because something has violated the rulemaking process or the law. In this case, we don&rsquo;t see that either has occurred, and we had to intervene to make sure that the process continues.&rdquo;
 Since NAFO filed its motion, the lawsuit proponents have filed a motion with the court to hold their case until the rulemaking is over. &ldquo;I think that sends a signal that they realize it was probably not going to be successful at this point in the process,&rdquo; Tenny says. &ldquo;It is now on hold until the rule is completed, and EPA is trying to finish it by July.&rdquo;
 NAFO expects that when the rule is complete, the lawsuit will return. &ldquo;If that&rsquo;s the case then so be it, our policy overall is to make sure that federal policy recognizes the carbon benefits of biomass energy, that&rsquo;s an extension of the benefits that come from forests,&rdquo; Tenny says. &ldquo;It&rsquo;s an important benefit that has real public and economic value, and it&rsquo;s something that is important to NAFO&rsquo;s members and should be to the nation.&rdquo;
 The challenge with biomass carbon emissions is that there is some confusion between science and policy, Tenny says. &ldquo;The science of the carbon cycle is settled,&rdquo; he says. &ldquo;We understand how it works, we understand that it&rsquo;s ongoing, and we understand that carbon is moved in regular fluxes between the earth and the atmosphere. In the U.S. it&rsquo;s a very settled proposition that the carbon flux has produced net carbon in the ground in the form of trees.&rdquo;
 Ever year, U.S. forests remove enough net carbon to offset 15 percent of the country&rsquo;s industrial emissions, Tenny says. &ldquo;If that&rsquo;s the case, then our forests are operating as a net carbon sink and it begs the question of whether we are really adding carbon into the atmosphere when we use some of the wood in the forests for energy.&rdquo;
 The confusion&mdash;even though the science is settled&mdash;is caused by those who want to manipulate or change the parameters within which forest carbon are looked at, Tenny adds. &ldquo;If you were to make the time frame and area small enough, you can get a different answer from what we&rsquo;ve received from the other approaches we&rsquo;ve taken.&rdquo;

NAFO intervenes in Tailoring Rule lawsuit. 

Biomass Deferment Debate 

When Jim Taylor Jr. founded Taylor Tree in 1953, he had no idea that it would pave the way to development of the first large-scale biomass gasification power facility in the U.S.
 That tree recycling business, with help from his son, Jim Taylor III, was transformed into a successful construction and demolition (C&amp;D) debris recycling company, a key component in his future biomass gasification plant model.
 Construction of the 20-megawatt (MW) plant in Montgomery, N.Y., has finally begun after more than five years of planning, permitting and financing. As is often the case with a first-of-its-kind project, multiple obstacles had to be overcome throughout the process. Now, the goal of Taylor Biomass Energy is to show policymakers, project financers and the public that biomass gasification is a clean, viable way to get rid of waste while generating renewable electricity on a large scale.
 Hatching an Idea 
 &ldquo;In 1989, New York state enacted a solid waste law that declared our land-clearing debris was now a regulated waste to become known as construction and demolition debris,&rdquo; Taylor explains. &ldquo;There were 40-some tree service companies and no C&amp;D processing facilities, so I decided to create the first permitted C&amp;D facility in the state, and it also turned out to be one of the first in the U.S.&rdquo;
 During the next 20 years, Taylor&rsquo;s company developed the core competencies of sorting and separating waste streams, and as a result was hired for the World Trade Center Disaster Recovery Project at Fresh Kills Landfill on Staten Island, according to Taylor.
 By 2000, Taylor Recycling Facility had accomplished about 45 to 50 percent recovered recycled products. &ldquo;At that point in time, I made the decision that we needed another technology to be able to recycle the remaining 50 to 55 percent,&rdquo; Taylor says. &ldquo;In New York, our solid waste policy at the time called for reducing, recycling, reusing and recovering the energy content, and landfilling or incineration as the last tool. The step we bypassed was recovering the energy content, as there was no technology of this type. Little did I know that I would eventually be the one company to bring a new, innovative alternative energy technology to the market for the first time ever, one that would recover the energy content.&rdquo;
 Mark Paisley, the man behind the science of Taylor&rsquo;s gasification process, has been involved in gasification research for nearly 40 years, including work at Babcock &amp; Wilcox Co. and Battelle. &ldquo;I&rsquo;m one of the few people who were around when the biomass field wasn&rsquo;t even called that,&rdquo; he chuckles.
 Paisley has several patents on gasification processes, and invented what is known as Rentech Inc.&rsquo;s Rentech-SilvaGas process. In 2005, he teamed up with Taylor and developed a new process, which will be deployed at the Montgomery plant.
 Taylor&rsquo;s process is unique because it&rsquo;s an indirectly heated gasification process, Paisley says. &ldquo;Air or oxygen is not used to convert the biomass, but rather hot solids circulating around the system, and it incorporates a unique gas conditioning reactor as an integral part of the gasification process,&rdquo; he says.
 As opposed to the conventional approach of applying various scrubbers, catalytic reactors or other purification mechanisms to adjust the composition of the gas to clean it up, the Taylor gas conditioning reactor, as an integral part of the gasification process, converts the condensable materials&mdash;or tars&mdash;in the gas into an additional synthesis gas. &ldquo;At the same time, it adjusts its composition so that the gas is significantly higher in hydrogen, making it more suitable for things like synthesis operations,&rdquo; Paisley says.
 While the Montgomery project will utilize biomass residuals such as C&amp;D materials and municipal solid waste, Paisley says, the process is amenable to any form of biomass. &ldquo;Flexibility is an important part of the process,&rdquo; he says. &ldquo;That way, you can pick and choose what source makes sense for a particular project, and that gives you the ability to locate the project wherever you need to.&rdquo;
 Though most biomass energy projects claim they can use any feedstock, Paisley says flexibility varies by technology. &ldquo;[For gasification] some fixed-bed and some fluid-bed technologies are a little less forgiving than a lot of the indirectly heated technologies,&rdquo; he says. &ldquo;Some technologies, based on their reactor configuration and types, require specific feedstock preparation. That can create limitations because now you have to have additional equipment up front to prepare the feedstock. Flexibility is important because one type of biomass may not always be available.&rdquo;
 ICM Inc., another gasification process developer, shares Paisley's perspective on feedstock flexibility.
 Ready for Deployment 
 ICM says it has successfully processed more than 13 different feedstocks at the company&rsquo;s commercial demonstration unit in Newton, Kan.
 Good system controls are a central component in ICM&rsquo;s gasification system and allow for its feedstock flexibility. &ldquo;We can control what&rsquo;s happening in the gasification unit, increasing its operability,&rdquo; says Tom Ranallo, ICM&rsquo;s vice president of operations.
 The company has &ldquo;really put the unit through the test,&rdquo; amassing more than 2,220 hours of operation over the past two years, Ranallo says. It&rsquo;s now ready for purchase and several power projects that will utilize the gasifier are in various stages of development.
 Initial development of the system began about four years ago, as a way to potentially alleviate fuel costs at ethanol plants. &ldquo;This was when natural gas prices were very high,&rdquo; Ranallo says. &ldquo;We started looking at different technologies on the gasification side because we thought it might be a good way to get these plants off natural gas and to generate their own power. That&rsquo;s becoming more common, but the challenge now is that natural gas is cheap. As we saw prices come down, the economics around the system began to change so we began looking at other applications.&rdquo;
 ICM&rsquo;s largest design is a 450-ton-per-day, 15-MW unit. Costs vary since each application requires a uniquely engineered solution, Ranallo says. &ldquo;You have to understand the feedstock components and engineer around them,&rdquo; he says. &ldquo;For projects that generate power, we&rsquo;ve generally seen that the cost of the thermal island, the gasifier piece with the power island&mdash;the turbine and the generator on the backside&mdash;is about $3 million to $4 million per megawatt, excluding the feed handling system. That&rsquo;s a good rule of thumb.&rdquo;
 Development comes with two sets of challenges, some on the technology provider side and some on the project developer side, Ranallo says. For ICM, the biggest challenge has been emission controls. Challenges
 Since few gasification units have been deployed for commercial applications in the U.S., ICM is dealing with first-time permitting and emissions issues, Ranallo says. In what it believes is the best available solution, ICM has partnered with emission control solution provider Eisenmann Corp. to incorporate its technology on the back end of the gasifier. &ldquo;We realized upfront that it was critical,&rdquo; Ranallo says. As ICM has been running multiple feedstocks through the gasifier, it has been gathering emissions and testing data to compile an emissions database to help developers with their permitting.
 &ldquo;Cleaning and cooling producer gas has been the Achilles heel of gasification,&rdquo; Paisley says. &ldquo;Biomass gasification is a very old technology, pre-1900s. The cleanup and adjustment of the composition of that gas has been something that people have been working on for a long time. There are old references, I have one dated 1923, that shows all kinds of various approaches to gas cleanup from absorbers to filters to various scrubbers.&rdquo;
 Today, people have zeroed in on catalytic systems in an attempt to make the gas easier to transport and use within an industrial facility, or to keep it from plugging up lines, Paisley says. &ldquo;That&rsquo;s one of the reasons I&rsquo;ve focused on the gas conditioning reactor within the Taylor process, because it addresses those issues.&rdquo;
 From Paisley&rsquo;s perspective, the challenges on the developer&rsquo;s side relate almost exclusively to financing. &ldquo;The technology is sound,&rdquo; he says. &ldquo;The gas turbine manufacturers are comfortable with a medium calorific value gas like we produce, and are happy to provide you with guarantees that say &lsquo;if you give me this gas, our turbine will produce x amount of megawatts.&rsquo;&rdquo;
 Because there is no inventory of gasification technologies out there, banks and sources of capital for these projects are reluctant to provide financing.
 Ranallo agrees. &ldquo;Financing is key,&rdquo; he says. &ldquo;We&rsquo;ve had finance groups looking at our gasifier to get them comfortable with the technology and our approach to it, and that will help ease their minds so they can feel good about financing some of these waste-to-energy projects.&rdquo;
 Another issue surrounding large-scale commercial deployment is the price of electricity. Jim Childress, executive director of the Gasification Technologies Council, says that&rsquo;s the main reason commercial-scale gasification-to-power hasn&rsquo;t taken off in the U.S. &ldquo;How to do [gasification] is known, it&rsquo;s just a matter of competitiveness with coal combustion,&rdquo; he says. &ldquo;People have been burning coals for years, and it costs less to burn coal on a large scale than it does to gasify biomass.&rdquo;
 Also, on the developer side, locking down a steady feedstock supply and securing power purchase agreements are necessary and potentially challenging, Ranallo adds.
 Progress in the U.S.
 Both Taylor Biomass and ICM are also working on international projects. Childress says that while interest is growing among the GTC&rsquo;s 65 domestic and international members, most of whom are involved in some aspect of large-scale fossil fuel gasification, in the U.S. biomass gasification is being done at smaller or demonstration scales.
 &ldquo;There have been some [large-scale] applications in Europe, but in the U.S., that&rsquo;s where we are,&rdquo; Paisley echoes. That has largely been driven by U.S. DOE policies over the past several years, he says. &ldquo;The DOE has focused on liquid fuels&mdash;ethanol specifically&mdash;and even though they were interested in power some years ago, they sort of abandoned that for a while. There&rsquo;s some renewed interest now, but we&rsquo;re one of the few large-scale projects underway and probably the furthest along relative to the production of power in the U.S.&rdquo;
 Another hindrance is a misconception of what biomass gasification really is. &ldquo;During our permitting process and public hearings, you run into people who believe that if it is high temperature by definition, it&rsquo;s incineration,&rdquo; Paisley says. &ldquo;That&rsquo;s obviously not correct from a technological standpoint, as it&rsquo;s hard to operate an incinerator without air going through it. The technical community typically understands that gasification is an intermediate step. You can almost look at it as a pretreatment step where you have the ability to clean up all of the potential environmental issues so that when you do the final conversion to electricity, it&rsquo;s far superior to a direct-combustion process.&rdquo;
 Paisley is hopeful that anti-biomass sentiment in the U.S. will soon be overcome so that biomass gasification will be more readily accepted, allowing for widespread implementation. &ldquo;Not just for the Taylor process, but all [gasification] processes,&rdquo; he adds. &ldquo;I&rsquo;m a firm believer in biomass energy and its potential because, as far as renewables go, biomass gasification gives us the ability to produce virtually any energy product that we want, from power to liquid transportation fuels to natural gas substitutes. It gives us the ability to grow our energy.&rdquo; Author: Anna Austin Associate Editor, Biomass Power &amp; Thermal (701) 738-4968 <a href="mailto:aaustin@bbiinternational.com">aaustin@bbiinternational.com</a>

BUILDING BLOCKS: Construction on Taylor Biomass Energy, a 20-megawatt biomass gasification plant, has begun on a 95-acre site near Montgomery in Orange County, N.Y. 

2011/06/13087738711448.jpg

SITE SPECIFIC: Taylor Biomass Energy will be co-located with Taylor Recycling Facility and will expand its current capacity of 307 tons per day (TPD) 
of C&D waste and 100 TPD of wood waste to 450 TPD of C&D waste, 100 TPD of wood waste and 500 TPD o

2011/06/13087739289967.jpg

RECYCLING PIONEER: Jim Taylor has been in the recycling business since 1953 and now, after five years of preparations, he's building the nation's first large-scale biomass gasification project.  

2011/06/13087739645796.jpg

TRASH TALK: Taylor Recycling, which is in Montgomery, N.Y., about 70 miles north of New York City, is a unique C&D waste recycling operation, converting more than 95 percent of the waste it receives into valuable end products. 

2011/06/1308773996776.jpg

REDUCING, RECYCLING AND REUSING: At Taylor Recycling, materials such as wood, concrete, metal, wallboard and cardboard are removed and the remaining fraction is made into a cover product for landfills to prevent fires. Unpainted wallboard is converte

2011/06/1308774086726.jpg

READY TO DEPLOY: ICM has put its feedstock flexible gasification system through more than 220 hours of testing and it's now ready for purchase. The company says several projects in various stages of development are interested in the gasifier.  

2011/06/13087741374569.jpg

Development of large-scale biomass gasification in the U.S. is in between demonstration and commercial scale, but a few companies are overcoming the challenges to make large-scale projects happen.

Full Steam Ahead 

When the Clean Air Act of 1990 was passed, it forced municipal solid waste (MSW) combustor plants across the U.S. to spend more than $1 billion on required upgrades, including combustion controls and sophisticated air pollution control equipment. By 2000, the industry had achieve
d compliance, and the U.S. EPA has reported that many of the upgrades exceed CAA requirements. Unfortunately, these power plants still have an undeserved reputation as being dirty. Paul Gilman, chief sustainability officer at Covanta Energy, which operates 44 waste-to-energy (WtE) plants across the globe, says most folks who describe these facilities as dirty are referring to the way they were operated prior to the CAA. &ldquo;The act has made facilities that have survived the transition dramatically better in their emissions characteristics,&rdquo; he says. &ldquo;The percent reductions from emissions ranging from particulate matter, dioxins and mercury are on the order of 95 to 99 percent. NOx (nitrogen oxide) is the only pollutant that didn&rsquo;t see those dramatic reductions&mdash;only about 20 to 30 percent&mdash;because it&rsquo;s much more difficult to go after.&rdquo;
 But that hasn&rsquo;t stopped Covanta from trying to better control it. &ldquo;We&rsquo;ve developed a proprietary technology that we believe can cut NOx emissions in half,&rdquo; Gilman says. &ldquo;We&rsquo;ve installed it at 13 different units now, and we hope to continue to move that out across our facilities.&rdquo;
 Referencing a recent EPA report, Gilman says that today, the emissions per unit of energy are lower for WtE facilities than for landfill gas-to-electricity plants, about the same for natural gas-fired plants, and easily better than coal- and oil-fired plants.
 Besides dramatic improvements in emissions, efficiencies in power production have also been an area of improvement at WtE plants. &ldquo;When these plants were first being developed, the emphasis was on solid waste management, and secondarily on energy,&rdquo; Gilman says. &ldquo;Facilities today are built with boilers that are more focused on power production.&rdquo;
 Figures Covanta typically uses indicate that existing facilities produce about 550 kilowatt hours (kWh) for every ton of MSW. &ldquo;A boiler we would build today in a community would probably be in the range of 700 to 800 kWh per ton,&rdquo; Gilman says. &ldquo;The technologies have improved and the newer facilities have higher efficiencies, but that&rsquo;s not where we quit.&rdquo;
 Covanta currently has a program designed to decrease the amount of electricity used within a facility to ensure the maximum amount of power goes to the grid. The Produce More Juice effort includes anything from using variable-speed motors to installing energy efficient lighting in their facilities, Gilman says. &ldquo;In that same sense, we do lots of things to improve natural resource utilization of our own facilities, such as taking them down to zero discharge and low water use,&rdquo; he adds.
 Inside the Plant 
 Waste Management-owned Wheelabrator Inc., the other dominant U.S. WtE company, also continually works to improve the operability of its 17 facilities. Recently, Wheelabrator completed major upgrades at a WtE facility and refuse-derived fuel (RDF) receiving plant in Portsmouth, Va., investing more than $20 million in capital upgrades and maintenance improvements.
 The Portsmouth facility is not at a landfill, which is common for WtE plants. Rather, the public authority trucks waste in from eight transfer stations to the RDF facility, where it is processed and shredded, then sent across the road into a storage pit on the power plant side, via an underground conveyor. &ldquo;That&rsquo;s where we use that now-processed waste, to burn as our fuel in our four boilers,&rdquo; says Portsmouth Wheelabrator Plant Manager Paul Grego.
 &ldquo;When we bought the plant, boiler availability was operating at around 70 percent, and today we&rsquo;re around 85 percent,&rdquo; Grego says. By the end of next year, he expects that to increase to 90 percent. &ldquo;A lot of the cost went to boiler pressure part replacements,&rdquo; he says. &ldquo;They were built in 1985, so they are about 26 years old.&rdquo;
 A total grate replacement on the existing traveling grate system was also done, according to Grego. A traveling grate system consists of a series of rigid and movable grates that move the waste through its natural process direction. &ldquo;On the reliability side, we did a lot of material handling changes, such as fly ash conveyors and bottom ash conveyors that were causing a lot of plant down time,&rdquo; he says. &ldquo;They were either replaced or repaired to good operating condition.&rdquo;
 Another key improvement was the installation of a high-efficiency over-fire air system. &ldquo;This, in conjunction with the new grate system, gives us the proper air and fuel ratio for complete combustion,&rdquo; Grego says. &ldquo;We&rsquo;ve improved the overall combustion of the units and lowered CO2 emissions, and those are the biggest improvements as far as efficiency upgrades.&rdquo;
 New turbine controls were also installed, he adds. &ldquo;We have an inlet pressure control system that steadies out the boiler header pressures, and that helps maintain a consistent steam flow, and again helps improve the overall combustion process.&rdquo;
 Maintenance is Key 
 While upgrading and adapting, new technologies play major roles in keeping WtE plants efficient and running as long as possible, general maintenance is also important, Grego says.
 Typically, a WtE plant has a 50-year life cycle, Grego says. &ldquo;The upgrades made at the 26-year-old Portsmouth facility would certainly extend the life of the plant through that cycle for the next 24 years.&rdquo; In reality, the life cycle can continue indefinitely if the plant and boilers are properly maintained on an annual basis. &ldquo;Across the board, our overall boiler availability is at about 93 percent, which is excellent in the industry,&rdquo; Grego says. &ldquo;If you maintain the units, you should expect to be able to run them year after year in the future.&rdquo;
 Covanta&rsquo;s Fairfax, Va., facility has been operating for 20 years, according to Gilman, and soon the community will have to decide whether to purchase the facility. A third party was hired to determine the value of the plant, which amounted to about $418 million. &ldquo;That&rsquo;s more than what it cost to build the plant,&rdquo; Gilman says. &ldquo;If you run these plants well and maintain them well, even after 20 years they hold their value and they can operate for another 20 years easily.&rdquo;
 At Covanta&rsquo;s Union County, N.J., plant, the county is planning to extend its current mortgage over 30 years. &ldquo;We&rsquo;re projecting a 50-year life span for that facility,&rdquo; Gilman says. &ldquo;It&rsquo;s all about taking care of them. Our capacity factors are very high&mdash;they rival nuclear power plants&mdash;but when they go into outage we do the kind of work to make sure they&rsquo;re going to last 40 or 50 years.&rdquo;
 Landfills, Revenues and Recycling 
 Along with plant maintenance, comes maintenance of the landfill. The longer a landfill stays open, the better the situation for the WtE plant.
 &ldquo;When a community looks at what they want to do with their post-recycled waste&mdash;whether they want to send it to a landfill or do energy recovery&mdash;the benefits of doing energy recovery include extending the life of the landfill by 10 times,&rdquo; Gilman says. &ldquo;They&rsquo;re also looking at the production of renewable electricity, which may qualify for incentives in some states.&rdquo;
 Those incentives vary considerably from state to state. In those that have renewable portfolio standards, MSW is in the top tier in some, lower tier in others. &ldquo;The price of electricity from a WtE plant going on the grid is less than the price wind, solar and other renewable power gets,&rdquo; Gilman says. &ldquo;It&rsquo;s a fairly competitive price at the outset, and that&rsquo;s because besides the electricity revenues, there are revenues from taking in the waste and the recycled metals.&rdquo;
 The amount of metal recovered during the process is significant, he adds, as after the combustion process the ash is filtered to remove all of the remaining metals.
 In some instances, zero-waste advocates have asserted that the WtE industry is competing with the recycling industry, which can potentially jeopardize MSW streams. &ldquo;Some say that we want to burn everything that can be recycled, and that&rsquo;s just silly,&rdquo; Gilman says. &ldquo;The communities where we operate have higher recycling rates than average U.S. communities, and many have world-class recycling rates. For example, Marion County, Ore., has a 60 percent recycling rate and it is climbing to 70 percent, and they are often evaluating whether they need to expand their Wte facility.&rdquo;
 Lee County, Fla., where Covanta also has a WtE facility, has a recycling rate that is twice the national average, according to Gilman. &ldquo;[The WtE industry and recycling industries] are logically compatible and aren&rsquo;t in competition, but for some reason, some zero-waste folks like landfills and think of energy recovery facilities as competition for recycling.&rdquo;
 There isn&rsquo;t much Btu value in cans, bottles or metals, Grego adds. &ldquo;If they can be recycled ahead of time, that&rsquo;s better.&rdquo;
 Though it seems as if the flow of MSW should remain steady, Grego says that volumes are slowly decreasing over time. &ldquo;It is good that there is growth in areas like solid-stream recycling, because that&rsquo;s waste that is typically not valuable to us.&rdquo;
 While the development of new, more efficient WtE facilities continues, Gilman says work to improve existing operations never ceases. That includes emissions, where major WtE upgrades first began. &ldquo;The Clean Air Act has been terrific for us because our communities know we&rsquo;ve made dramatic changes in emissions,&rdquo; Gilman adds. &ldquo;We&rsquo;re committed to further reductions, and we&rsquo;ve been very successful in the past few years. As a company, or even a sector in general, we&rsquo;re not resting on the morals of the Clean Air Act.&rdquo;
 Author: Anna Austin Associate Editor, Biomass Power &amp; Thermal (701) 738-4968 <a href="mailto:aaustin@bbiinternational.com">aaustin@bbiinternational.com</a>

GOOD NEIGHBORS: Covanta constantly improves emissions and efficiencies at its plants like this one in Alexandria, Va.  

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CLEANING UP: Performing regular maintenance is key to prolonging the life of a plant. 

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GREAT GRATE: Wheelabrator performed a total grate replacement at its waste-to-energy facility in Portsmouth, Va.

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The nation's two largest waste-to-energy companies discuss how they have reduced emissions and increased efficiencies.

Cleaner and Leaner

In the path of pitches from technology manufacturers and project developers looking to drum up business in certain states, members of the Clean Energy States Alliance realized they were unaware of the commercial status of biomass combustion and gasification technologies. A request to the U.S. DOE&rsquo;s Technical Assistance Program resulted in a study by the National Renewable Energy Laboratory titled &ldquo;Market Assessment of Biomass Gasification and Combustion Technology for Small- and Medium-Scale Applications.&rdquo;
 Free of charge to CESA, the 2009 report focused on conversion technologies with capacities of less than 5 megawatts (MW) or 50 million Btu per hour. Primary applications considered were thermal, combined-heat-and-power (CHP), and district heating. The report analyzed biomass availability, strengths and weaknesses of both technologies, system economics, and included an assessment of their commercial statuses, as well as inventories of suppliers of both technologies.
 &ldquo;[CESA] wasn&rsquo;t quite familiar with the status of the technologies and the commercial viability, so they wanted some type of overview,&rdquo; says study co-author Scott Haase.
 Not surprisingly, the study found that direct combustion systems for heat, power or CHP are available commercially from a number of manufacturers. Gasification systems, however, showed different and more diverse results. Close-coupled gasification systems, where the syngas is burned directly for space heat, drying or to produce steam, were already commercially available from manufacturers. But what Haase calls two-stage gasification, where the syngas is conditioned for tar and particulate matter removal before use in a genset or gas turbine, were largely still in development with a number of technologies in the demonstration phase.
 In light of those findings and others, NREL concluded its study with three important recommendations: entities wishing to support the development of gasification applications and technologies should consider funding demonstration projects of near-commercial technologies in their states; a central clearinghouse of the market potential for small- and community-scale biomass direct combustion and gasification systems should be commissioned; and a national assessment of the market potential for small- and medium-scale systems that is searchable online should be created and maintained. Two years later, the study may not have spurred rapid development of either technology in CESA member states, but it certainly proved useful in more than one aspect.
 Following Through
 &ldquo;For many states, biomass has been a challenge for our members to figure out a strategy and program approach that really evaluates the efficiency of biomass conversion,&rdquo; says Mark Sinclair, executive director of CESA, which is made up of major state-level programs that invest public dollars in renewable energy. He added that the study confirmed what CESA already knew: state clean energy programs have an important role in supporting research and development to move forward with biomass gasification and more efficient direct combustion technologies.
 Thus, NREL&rsquo;s recommendation that entities supportive of gasification technologies fund demonstration projects was taken seriously by a number of CESA members. &ldquo;Several of our states relied on that recommendation for demonstration projects to direct some funding into supporting biomass conversion technology acceleration,&rdquo; Sinclair says. The Alaska Renewable Energy Fund invested $2 million in a 400-kilowatt biomass-fired Organic Rankine Cycle combined-heat-and-power plant that is scheduled for start-up this fall, he says. Massachusetts and Wisconsin have referenced the report in funding considerations, he adds, and the California Energy Commission took it as confirmation that the money it had already invested in biomass conversion technologies through its Public Interest Energy Research program over the past decade was crucial to development. &ldquo;They say while the NREL report didn&rsquo;t spur new activity, it basically confirmed the need for their continued research in support of future gasification advancement activity,&rdquo; Sinclair says, adding that California has two demonstration-scale two-stage gasifiers currently operating. Both were developed, however, before NREL released its report.
 Not only did the report confirm the need for state support in research and development, but it proved useful in understanding where manufacturers of the technologies are located, and therefore how important demonstration projects could be in certain states. &ldquo;When there&rsquo;s a number of manufacturers in your state that are focusing on this technology, that&rsquo;s another good reason to put clean energy dollars into the technology,&rdquo; Sinclair explains. &ldquo;That&rsquo;s becoming even more important in this economic climate. That inventory provided by NREL was extremely useful in finding out how valuable this technology is in terms of manufacturing for each of the states.&rdquo; A state industrial development aspect can carry weight in determining whether to make investments in clean energy projects, he adds.
 It can be hard to find objective, detailed information about biomass conversion technologies for use by agencies wishing to support them, Sinclair laments. &ldquo;This NREL report really helped our members confirm that if you&rsquo;re going to increase efficiency, there really needs to be some public-funded demonstration projects for gasification. The study gave new impetus to focusing on biomass gasification and combined heat and power.&rdquo;
 NREL&rsquo;s report is one example of a promising and necessary partnership between the DOE and states investing public dollars in clean energy development, Sinclair stresses. &ldquo;One of the strong beliefs of our organization is that there is a real need for DOE and the national laboratories to work closely with individual states in advancing clean energy investment and technology,&rdquo; he says. &ldquo;There can be a lot more of this activity between the state and federal government going forward.&rdquo;
 Study Updates
 And while the states move forward in supporting technology development, NREL will continually update the report to reflect the current environment. The lab is reworking its equipment supplier inventory and adding a few manufacturers, Haase says, but beyond that, not much else has changed. The demonstration-phase status of two-stage gasification, the finding that may allow the most room for growth and updates, has remained unchanged with the rest.
 But while two-stage biomass gasification, categorized by gas conditioning before use in an engine, lingers in its precommercial-scale classification, progress is certainly being made. Gasification system developer and manufacturer Nexterra is partnering with General Electric Co. for two identical, demonstration-scale, two-stage gasification systems, having sold a number of commercial close-coupled systems. The first two-stage system, scheduled to commence operation in the first quarter of 2012, has been widely publicized and will be at the University of British Columbia in Vancouver. The CHP plant, dubbed the Bioenergy Research Demonstration project, will produce 2 MW of power and 10,000 pounds per hour of steam, supplying up to 25 percent of the campus&rsquo;s heating demand. Prepared for woody biomass feedstock, the project has received millions in provincial funding and will also provide learning opportunities for the university&rsquo;s students and faculty.
 The gasification system&rsquo;s twin will be installed at a landfill in Catawba County, N.C., and will run on wood diverted from the landfill, according to Nexterra CEO Jonathan Rhone. Both systems will be paired with a GE Jenbacher engine, a technology to which the landfill is no stranger. &ldquo;They were a real pioneering site for GE,&rdquo; he says, adding that the landfill served as somewhat of a test site when the Jenbacher technology was brought to North America. The systems will be standard module designs and will include a single gasifier, single gas conditioning system and Jenbacher engine.
 Nexterra&rsquo;s gas conditioning system is not like others that take approaches such as tar scrubbing or chemical conversion, Rhone says. &ldquo;Our approach is quite different,&rdquo; he explains. &ldquo;We take the syngas after it comes out of the gasifier &hellip; and we thermally crack the tars.&rdquo; That process is given sufficient residence time, he says, converting the tars into more syngas. In addition, the heat used to reach the high temperatures for tar cracking is recovered and recirculated into the process. Downstream of the tar cracking, inorganics are removed through a filter system and the syngas is then fed into the Jenbacher engine.
 &ldquo;We looked at about half a dozen different approaches,&rdquo; Rhone says. &ldquo;We didn&rsquo;t like any of them because they were either too expensive, unproven with a fair amount of technology risk, or they produced another environmental problem such as tarry water that needs to be treated before disposal.&rdquo;
 Two-Stage Trade
 Perhaps the most famous example of two-stage gasification demonstration is in Gussing, Austria, where a wood-fired 2 MW CHP plant with the capacity to cover the entire town&rsquo;s electricity demand has turned the former poor region into a prospering center of renewable energy. The system also generates 4.5 MW of thermal energy for district heat and has helped the small community of 4,000 completely change its energy supply to renewable sources.
 Such a shining example is nonexistent thus far in the U.S., but Rhone says demand for and interest in gasification systems is enormous. &ldquo;We&rsquo;ve got a huge demand for this type of technology,&rdquo; he says, citing three main reasons. First, it represents a step change in overall system efficiency compared with combustion CHP. Second, it doesn&rsquo;t require steam plant operators, who are expensive and hard to find; and last, it provides a favorable power-to-heat ratio. &ldquo;There&rsquo;s a lot more electricity-to-thermal energy produced from the engine system versus a steam CHP system,&rdquo; he says.
 While demand grows and Nexterra and other technology providers move forward with development, maybe an upgrade for two-stage gasification to commercial-scale status will be the first major update to Haase&rsquo;s report. With already apparent progress in convincing state-level renewable energy agencies that financially supporting advancements in gasification technology is necessary, it seems such a sizable and meaningful advancement could be just over the horizon. Author: Lisa Gibson Associate Editor, Biomass Power &amp; Thermal (701) 738-4952 <a href="mailto:lgibson@bbiinternational.com">lgibson@bbiinternational.com </a>

ENERGY CENTER: The Bioenergy Research Demonstration project on the University of British Columbia campus in Vancouver will produce 2 megawatts of power and 10,000 pounds per hour of steam. 

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Scott Hasse, a senior engineer with NREL, conducted research into biomass gasification and combustion technologies.

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NEXT FOR NEXTERRA: Gasification system developer Nexterra will provide the equipment and design for a gasifier at Vancouver's University of British Columbia.

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JENBACHER GENERATION: The Nexterra Product Development Center employs a GE Janbacher engine. 

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A 2009 NREL assessment of biomass combustion and gasification technologies may not have spurred rapid commercial development, but it has encouraged state investment in demonstration projects.

Inspiring  Investment 

Perhaps the most important impact of India&rsquo;s recent rapid biomass gasification development is socioeconomic, in its capacity to bring power to rural areas that have never had it.
 In the past few years, the biomass gasification industry in India has ballooned, growing from plants with kilowatt capacity peppered throughout the country, to development of systems between 1 and 10 megawatts (MW) sprouting up regularly, according to Kam Patel, director of equipment provider Global Energy Collaborations.
 Development has increased on residential, community and industrial scales, but different technologies seem more practical in certain applications than others. Residential development has latched onto biomethanation, where a biochemical is used to generate methane gas, according to Surya Chandak, a senior program officer with the United Nations Environment Programme&rsquo;s International Environmental Technology Centre in Japan. And the most common form of gasification, which Chandak calls thermal gasification, has taken root in community and industrial installations, he says.
 In India, biomass feedstocks have been converted to energy for decades, specifically bagasse. Back then, however, it was directly combusted in boilers for steam and power. In the late &rsquo;80s, Chandak pioneered a combustion boiler that would burn rice husks on an industrial scale. &ldquo;I was working in energy and had contact with boiler manufacturers,&rdquo; he explains. &ldquo;They all laughed at me, &lsquo;Ha, ha, using rice husks, what nonsense.&rsquo;&rdquo; At that time, farmers would pay collectors to take the rice husks and save them from securing disposal, so the plan was viable and innovative for its time, although Chandak jokes that he feels a mixture of pride and shame when thinking about his technology. &ldquo;The first industrial boiler designed by me was a primitive design,&rdquo; he laughs.
 Winds of Change
 Direct combustion seemed to be a no-brainer, especially since bagasse and rice husks are easily burned with little ash. &ldquo;If you can use a fuel directly as such, why would you want to gasify it?&rdquo; Chandak says, launching immediately into a multifaceted, yet concise answer. First, converting a boiler to burn solid biomass fuels is extremely difficult and expensive, whereas modifying one to burn syngas is much simpler. Second, boilers are crucial pieces of equipment, and fuel without favorable combustion characteristics can be harmful to them. &ldquo;To subject your key equipment to such difficult material would mean that you are compromising on the reliability of your equipment,&rdquo; Chandak says.
Instead, shift the material problem away from the boiler. &ldquo;You don&rsquo;t expose your boiler to difficult fuels. You expose a gasifier to a difficult fuel.&rdquo; Last, different types of biomass are available at different times of the year and they all possess varying characteristics. &ldquo;If you use it directly, you&rsquo;ve got to adjust your main equipment very often,&rdquo; he says. &ldquo;Whereas if you use an intermediary gasifier, then you&rsquo;ll get normalized fuel for the boiler and all the variations will be taken care of by the gasifier.&rdquo;
 So after years of almost-exclusive direct firing of bagasse and rice husks, India is in the midst of a shift to wider gasification use, Chandak says. &ldquo;What people realized is yes, you can direct burn biomass, but we will probably have more flexibility in operations if we use gasifiers.&rdquo; While fluidization in fluidized bed boilers mandates a minimum size requirement, gasifiers can be built in small, multiple units and can be adjusted to suit a wide variety of purposes, Chandak adds. &ldquo;That is where the use of gasification is increasing.&rdquo;
 Nearly 500 million tons of biomass is generated every year in India from bagasse, ag residue and forest sources, according to Global Energy Collaborations. In 2006, India was first in the world in biomass gasification, producing almost 70 MW, according to the Energy and Resources Institute in New Delhi, India. India&rsquo;s Ministry of Agriculture and Ministry of Non Conventional Energy Sources have teamed up with a goal of increasing biomass power generation from 200 MW to an astonishing 19,000 MW, according to Global Energy Collaborations.
 Incentives
 To reach such lofty goals, the government has meaningful incentives in place to spur development. They have been effective and a major factor in the successful growth of the biomass gasification industry, Patel says.
 The National Biomass Gasifier Programme provides capital subsidies for thermal and electric biomass gasifier applications, based on the output of the system in kilowatts. The program has been wildly successful, assisting in the development of 1,074 gasifiers all around India, together aggregating 34.36 MW in various applications including mechanical, electrical, thermal and cooking, according to Global Energy Collaborations. &ldquo;They don&rsquo;t have anything in mind to stop it for the next three or four years,&rdquo; Patel adds.
 Besides the program and others like it, inherent benefits to biomass gasification serve as development drivers, too. Patel says an 80 percent depreciation in the first year can be claimed for certain cogeneration systems and comes in handy if the operator is taking profit from somewhere else. &ldquo;So where can you go wrong?&rdquo; he questions. Costs of production also go down with industrial installation of a biomass gasifier, as it allows power production instead of purchase. It also provides a secure supply of power, and in areas where power is scarce, that benefit is good for business, Patel says. Last, the gasifiers can be eligible for carbon credits.
 The widespread development driven by such benefits has led to an almost equally widespread and diverse feedstock pool. &ldquo;What I have seen is that alternative uses of biomass are so widely different from country to country and even within a country from region to region,&rdquo; Chandak says. &ldquo;What crops are being grown and what the current use of the residues is would determine what resource is viable.&rdquo;
In general, though, he lists rice straw, cotton straw and coconut husks, reiterating that bagasse and rice husks are already used to produce energy almost to their full extent. Patel adds bamboo waste to the list and says there is no concern of a feedstock shortage in the midst of the development boom, but prices for those materials have increased.
 One energy resource Chandak laments as being unexplored in India is municipal solid waste. &ldquo;To my mind, if we can have a system for sorting of this waste, this would be a very excellent source of energy.&rdquo; But comingled waste is hard to handle and unfortunately, everything in India is comingled, he says.
 In the U.S., development of any type of biomass power plant, no matter the feedstock, can be met with intense, albeit sparse, opposition. Patel balks at the question of whether biomass developers in India deal with the same hurdles. &ldquo;No. No. No,&rdquo; he assures. &ldquo;Nothing of that sort has come up.&rdquo; India is the largest democracy in the world, with the U.S. a close second, he says, but there&rsquo;s one major difference. &ldquo;India is just a democracy,&rdquo; he begins. &ldquo;U.S. has democracy refined and polished and multiplied by five so everybody has got super democratic feelings. Everyone will oppose everything.&rdquo; Applications
 So a lack of fierce local opposition could be one reason biomass gasification is catching on more quickly in India than in the U.S., making way for substantial development. Clenergen has announced it will install by the end of this year a 4 MW per hour (MW/h) gasifier in Bangladore, Karnataka, India, for hydraulic manufacturer Yuken India Ltd. The company will use about 2.5 MW/h, with the rest sold to the state of Karnataka, according to Clenergen.
 Global Energy Collaborations cites two projects in the South India state of Hayana with a combined output of 17.55 MW. A 12 MW power plant will be set up in the city of Ambala that will use rice straw, rice husk, wheat straw, bagasse and cotton stalks, and a 5.5 MW plant is being established in Karnal that will generate power using cotton stalks, wheat straw, rice straw and rice husk.
 Chandak says the food processing industry in India also makes a great candidate for biomass gasification, as residues need to be disposed of. &ldquo;If that can be converted into energy, you solve two problems at the same time,&rdquo; he says. In addition, some locations in Northern India have difficulty securing commercial fuels, such as the Punjab region, which is a textile hub. Fuel such as oil or gas is transported from between 1,000 and 2,000 kilometers. &ldquo;They are dependent very much on the supply of their fuel,&rdquo; Chandak says. &ldquo;If these industries can double up on an energy supply system which uses a locally available, renewable, perennial fuel like waste biomass, they would be ... happy.&rdquo; These are the things that would drive industrial biomass gasification, he adds.
 But the potential for village-level biomass gasification is easily one of the most exciting aspects of the gasification push. Thus far, many small, remote villages have lived without electricity, but the realization that it&rsquo;s necessary is setting in as economic development reaches down to rural levels, Chandak says, adding that it&rsquo;s not feasible to extend the transportation grid to all areas. &ldquo;Any alternative means by which they can get power is very welcome,&rdquo; he says. And the increased development of biomass gasification has brought hope and a viable solution.
 Right now, small kilowatt capacity systems are being developed at villages in Gahar, and Chandak hopes that in due course, those systems will lead to larger ones for larger distribution areas. &ldquo;Probably in the future, the sizes will increase,&rdquo; he says.
 While the larger systems have a significant impact on the overall national energy demand, the small village systems don&rsquo;t, Chandak says. But they certainly have a very large impact on socioeconomic development in areas that have been left out of such development. Chandak is convinced it would have a significant ripple effect and cites as an example the fact that children will be able to read at night, thus improving education. &ldquo;That impact, in my mind, would be much more important to highlight than just a mere impact on the national energy demand.&rdquo;
 Bolstered by government incentives and social benefits, energy from biomass gasification is expected to continue growing in India, providing local resources for commercial and industrial applications that save money, and bringing rural villages out of the dark. &ldquo;I think gasification offers a very good alternative for enhancing access to energy and simultaneously ensuring you have secured an energy supply from your own resources,&rdquo; Chandak says. &ldquo;This need would propel the use of locally adaptable power systems and gasification seems to be a viable route for that.&rdquo; Author: Lisa Gibson Associate Editor Biomass Power &amp; Thermal (701) 738-4952 <a href="mailto:lgibson@bbiinternational.com">lgibson@bbiinternational.com</a>

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FEEDSTOCK FRIENDLY: India has a wide variety of agricultural residues available for bioenergy production including rice and cotton straw, coconut husks and bamboo waste.

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India's biomass gasification sector is growing by leaps and bounds, seemingly at all levels, and it's raising hope for the establishment of electricity in rural villages. 

Biopowering India

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William Strauss, president of FutureMetrics, produced this study to point out flaws in the Manomet Center for Conservation Sciences' woody biomass carbon accounting method.  

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Figure 1: The biomass curve assumes a 30-year growing cycle with dedicated sustainable forests so that no new net CO2 is released by combustion for 30 years after biomass facilities that started in 2011.
The coal curve is business as usual.
The model

2011/06/13087763119536.jpg

Figure 2: The biomass curve assumes that the biomass used in 2011 is from sustainable forests that have already sequestered the CO2. 
The model assumes a 2.5 percent annual growth rate in demand.
Improved silviculture increasing yield per acre is ass

2011/06/13087764545436.jpg

Figure 3: The biomass curve assumes that the biomass used in 2011 is from sustainable forests that have already sequestered the CO2. 
The coal curve is business as usual.
The curves assume a 2.5 percent annual growth rate in demand.
Improved silvicul

2011/06/1308776574443.jpg

2011/06/13087766150422.jpg

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CARBON CONCLUSION: If biomass is harvested from existing forests that will be sustainably managed in the future, there is no carbon debt.  

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Wood-to-energy from sustainably managed forests can provide net-zero carbon emission or even positive carbon sequestration if the woody biomass stock is not depleted or grows over time.

How Manomet Got It Backwards: Challenging the “Debt-Then-Dividend” Axiom

Like links in a chain, companies in the algae industry&mdash;from early-stage operations developing harvesting methods to government-funded research seeking the best algae strains for optimal growth rates and oil yields&mdash;each, inevitably, relies on the other&rsquo;s strengths to reach the ultimate goal: efficiently and economically producing algae-derived bioproducts at commercial scale and a positive return on investment. It&rsquo;s this inherent, interdependent nature that will ultimately drive commercial success, says Andrew Soare, research associate for Lux Research Inc.
&ldquo;The work that you do upstream has to lead directly into, parallel and really integrate with the work that you do downstream,&rdquo; Soare tells Algae Technology &amp; Business. &ldquo;For example, if I&rsquo;m developing an algae strain, I need to know what target product I&rsquo;m going to make, how I&rsquo;m going to extract it, how I&rsquo;m going to cultivate the algae and so forth. On the flipside, the downstream people need to know what types of strains they&rsquo;re working with, if they&rsquo;re genetically modified, native or non-native algae species and so on.&rdquo;
As with any emerging industry, being able to address areas that are deficient within the algae value chain will become paramount for achieving economies of scale. One of the most glaring deficiencies lies in how funding (private, public or federal monies) will be needed to help R&amp;D and early-stage algae development companies break out of perpetual fund-raising mode. Simply being able to grow algae is a challenge in itself, but financial challenges, such as short timelines prescribed by venture capitalists, limited private investment for R&amp;D coupled with the high capital cost of building or purchasing expensive equipment for incubating, dewatering or harvesting, can be a tall order for any algae developer to overcome in the lab or in pilot-scale. Availability of federal funds will likely continue to play a critical role in supporting basic research on fundamental and applied sciences, particularly for algae-derived biofuels.
&ldquo;I&rsquo;d say the hardest thing right now for the industry is to actually get the investment community to support the development of the industry,&rdquo; says Richard Sayre, director of the Enterprise Rent-A-Car Institute for Renewable Fuels at the Donald Danforth Plant Science Center located in St. Louis. Sayre also serves as chief scientist with The National Alliance for Advanced Biofuels and Bioproducts, and is a principal investigator/project coordinator of the Center for Advanced Biofuel Systems as well as chief technology officer for Phycal LLC, a startup biotech outfit developing microalgae-based carbon capture and biofuel production systems.
&ldquo;It&rsquo;s taking the technology to the next level where I think most companies are struggling,&rdquo; Sayre says. &ldquo;The issue that keeps coming up over and over again from the investor community is that they&rsquo;re not ready to commit funding or take on the risk for technologies that may require between five and 10 years to reach maturity.&rdquo;
This is particularly true for Scipio Biofuels Inc., an early stage algae R&amp;D firm headquartered in Orange County, Calif., lending credence to the fact that obtaining funding to prove the technology for going commercial may be easier said than done. According to Matt Snyder, president and CEO, the company has developed a novel, continuous flow system that employs closed-sealed photobioreactor cultivation equipment. The company designed a prototype unit packaged with additional features, including formulated and &ldquo;species optimized&rdquo; algae, pumps and harvesting techniques, that can be integrated with existing algae cultivation sites or biofuel plants. After exhausting in-house and other performance test requirements of the technology, Snyder says he&rsquo;s ready to take it to the next level. But, there&rsquo;s one problem.
&ldquo;Proof testing costs $300,000 because of third-party proof fees,&rdquo; Snyder says. &ldquo;If we had this third-party certification of our productivity, we would be able to have a take-up contract for a facility in less than a week.&rdquo;&nbsp;
For venture capital firms like Redwood Shores, Calif.-based Gabriel Venture Partners, the decision to invest in the algae industry wasn&rsquo;t a preemptive one, according to partner Jim Long. Gabriel Venture Partners is backing Haywood-based Aurora Algae, a vertically-integrated algae development company that recently completed construction of a demonstration-scale facility in Western Australia. Aurora received a $2 million grant from the Australian government under its Low Emissions Energy Development Fund to support the project. Aurora&rsquo;s technology features open raceway ponds that cultivate algae. The company&rsquo;s demonstration facility in Australia includes six one-acre raceway ponds, four 400-square-meter ponds and four 50-square-meter ponds. Long says Gabriel Venture Partners performed its due diligence and firmly believes Aurora will pay dividends someday.
&ldquo;The reason Gabriel invested in algae is because we know if companies like Aurora Algae are successful then that will open up investments in either technology companies that help the various areas of the algal supply chain, or niche companies that may specialize in algae for wastewater plants, power generation and so forth,&rdquo; Long says. &ldquo;In our minds, if algae turns out to be successful, Gabriel probably makes another four or five more investments in algae down the road.&rdquo;
While additional funding will be required to refine and enhance all stages of the algae supply chain, there are a few areas where most of the funding should go for further development. One of those, according to Soare, is the extraction step.
&ldquo;That part of the whole value chain is definitely the most important and the key technologies are ones that can circumvent those extraction cost issues,&rdquo; he says. Synergies Rule
The expression &ldquo;there&rsquo;s more than one way to skin a cat&rdquo; applies to many things but but perhaps none more than the algae industry. Every company brings its own unique approach to how it intends to contribute towards commercialization of the sector. And every one of them holds a unique set of skills, technologies, business savvy and financial-backing. Some, like Aurora Algae, are employing a vertically integrated&mdash;or &ldquo;total solution&rdquo;&mdash;model to capture and develop the entire algae supply chain. Likewise, some are focused on developing one or two aspects of the entire chain in hopes of linking up with the higher class of midstream partners for business opportunities. Nevertheless, one thing is certain. As fragmented as the industry may be with vastly different processes, the gap between all of them could be closed if more &ldquo;best-to-breed&rdquo; offerings are available, according to Riggs Eckelberry, CEO of Los Angeles-based OriginOil Inc.
&ldquo;The growth and harvest processes both need to become continuous end-to-end processes with all the vendors integrating with each other,&rdquo; Eckelberry says. &ldquo;We&rsquo;ve got to start integrating and putting those in place, whether they&rsquo;re venture agreements, OEM deals, private labeling, alliances or just product alliances that agree to recommend each other. The work has to be done to sort of dovetail all these processes into each other.&rdquo;
Like other mid-stream algal technology developers, OriginOil is finding that the algae industry is collectively waiting for bona fide end-users of various technology to emerge, what Eckelberry calls &ldquo;system integrators&rdquo; who are capable of deploying the technology for the construction and operation of commercial algae production plants. While OriginOil&rsquo;s business strategy has always been rooted in providing the technology rather than producing algae, the company originally considered manufacturing its own algae-derived products, according to Eckelberry. The company has since steered away from that strategy instead relying on establishing relationships with commercial partners, such as Australia-based mining company MBD Energy Ltd., which agreed to deploy OriginOil&rsquo;s algae-to-oil technology.
Last year, OriginOil entered into a strategic partnership agreement with MBD Energy on a multi-phase commercialization program. Specifically, the agreement calls for OriginOil to supply MBD Energy with its algae-to-oil technology platform in progressively larger installations. Subject to the success of the initial test phase, which is underway, MBD will purchase significantly larger systems to serve its power station projects in Australia, beginning with a 1-hectare pilot plant at Tarong Power Station in South Eastern Queensland and expanding to full production sites at all three of MBD&rsquo;s power station projects in Australia. Each of MBD Energy&rsquo;s power station projects, according to the company, has the potential to grow to 80-hectare commercial plants, each capable of producing 11 million liters of oil (2.9 million gallons) for plastics and transportation fuel, including 25,000 metric tons of drought-proof animal feed annually.&nbsp;
According to Eckelberry, OriginOil&rsquo;s new strategy is to speak directly to customers, adding that it plans to pursue distribution agreements with companies like MBD that have global sales networks. He also predicted out-licensing agreements to put noncore technologies to work for specialized companies, while retaining usage rights for its own direct customer base.
&ldquo;We believe there are enough well-funded algae technology end-users emerging at our rate of commercial development,&rdquo; Eckelberry says. &ldquo;The deal flow of genuinely funded companies is increasing at a rate that is pretty sustainable for us. We&rsquo;re pretty happy with how the market is coming into being at the same time as our technology is evolving.&rdquo; Author: Bryan Sims Associate Editor, Algae Technology &amp; Business (701) 738-4974 <a href="mailto:bsims@bbiinternational.com">bsims@bbiinternational.com</a>

Addressing shortcomings in algae industry development to spur commercial advancement 

Breaking Through the Bottleneck

Many algae project developers face the question of how to approach &ldquo;commercial-scale.&rdquo; Commercial-scale has not been defined for algae biofuel facilities, but guidance from other biofuel models is available. Ethanol production facilities started commercial-scale production at 12 to 18 MMgy with local financing in the mid-1980s. With a proven track record, commercial facilities were designed at 40 MMgy in 2000, and since 2005 are customarily built on a 100 MMgy model to achieve economies of scale. The brief history of commercial biodiesel production since 2006 has focused on commercial scale of 20 to 30 MMgy.&nbsp;&nbsp;
Twenty to 30 MMgy of algae oil can be a daunting proposition for open pond algae systems, requiring 6,000 acres of ponds producing high rates of algae oil, 5,000 gallons per acre. For algae biofuel facilities, scale will be a factor in considering whether the oil will be further processed to biodiesel or marketed as biocrude to a refinery. Some suggest commercial-scale marketing of algae oil as biocrude to petroleum refineries is about 100 MMgy. Biocrude can be marketed to existing biodiesel plants, but opportunities present today may be subject to compatibility with other feedstocks, availability and pricing of others including waste oil with little market value, and a risk that the biodiesel facility will stay in business with that algae oil capacity available. If a facility is designed to refine algae oil to biodiesel, scale is much less of a factor because biodiesel can be marketed in smaller quantities.&nbsp;
Commercial scale also focuses on economies of scale for production, harvesting, extraction, refining to biodiesel, product inventory and storage, and personnel costs.&nbsp; Algae production is not a manufacturing system or land-based plant cropping system, but rather a dynamic plant growth system requiring monitoring and management similar to live animal production instead of land crop production. Larger scale requires attentive monitoring and management to detect growth rates, nutrient uptake and environment changes, as well as diseases, viruses and predators. As a result, the cost of technical personnel, monitoring, harvesting, extraction and refining equipment needs to be spread over an appropriate production base. If the scale is too small, the project risks high overhead costs that affect profitability.
Water. While many projects focus on sunlight as the critical factor for algae production, water availability is probably more important. Location, system design and size determine what the water needs will be. Permits, regulations and competing uses will determine the availability. Water needs for a 100-acre open pond system in a region with high solar radiation and little rainfall include evaporation and water lost through algae harvesting. In the high solar, arid areas of the U.S., evaporation can be 60 to 80 inches of open surface water annually. The impact of evaporation is not just removal of water, but also concentration of minerals and salts. A 100-acre open pond in a high solar, arid area would require about 160 million gallons of additional water per year to maintain the same water levels. At a production rate of 5,000 gallons of algae oil per acre per year (high), this 100-acre, 500,000 gallon algae oil production system requires about 320 gallons of water for each gallon of algae oil produced.
Open systems also have the risk of too much water through precipitation and local flooding. While catastrophic events may be rare, rainfall in open systems can dilute and change the chemistry of nutrient-laden water optimal for algae growth. Algae production entrepreneurs such as Phyco Biosciences have reduced the effects described above on open systems by lining and covering trench systems in Arizona.&nbsp; Those systems reduce the risk of evaporative water loss and concentration of minerals and salts.
In closed systems, there is still water loss from harvesting and a need to make up water as necessary to supply micronutrients taken up by the algae, which are removed from the system. At any time the algae nutrient uptake (including micronutrients essential to cell structure and growth) exceeds the nutrient replacement rate, the system is at risk of reducing productivity. In natural systems such as lakes, the water and nutrient replenishment is constant, varied, and dynamic. A lake has multiple, complex systems from the air-water interface to the water-sediment interface coupled with variable mixing regimes to supply and change algae production dynamics. Designed systems insulate the water from many of the external variables to achieve stability with the goal of predictability, but still face the water chemistry dynamics necessary to optimize photosynthesis and algae production that will occur in variable cycles, typically at nonlinear rates.
Light. Many algae production designs focus on optimal sunlight as the primary factor for siting a facility. While some systems such as Solazyme&rsquo;s focus on dark algae growth through sugar-supplied energy, most focus on light energy for algae photosynthesis to produce growth and oil. Algae need a certain amount of light at opportune times to grow well. Solar energy generally exceeds the amount of light needed for photosynthesis at the water surface and attenuates rapidly in the first four to six inches of depth and, as algae grow, they self shade the light source so mixing is utilized to bring more algae into appropriate light to promote growth. Nationally, the areas of the country with the most sunlight receive no more than nine to 10 hours of variable intensity sunlight per day, annually averaged. The variation throughout the country from summer to winter may be as much as 25 to 50 percent. The daily and annual variation can result in production variability, unless the available sunlight is underutilized by the algae production system.&nbsp;
Sunlight photosynthesis systems have an inexpensive source of energy, but it is variable and will be diminished by clouds, weather and atmospheric events. In winter months, reduced production and corresponding algae oil supply may cause demand and pricing variations.&nbsp;
In the best locations sunlight photosynthesis systems are without light over half the time and subject to technological risks of better artificial lighting that efficiently produce more algae per volume of water by optimizing the strength, wavelength and duration of light and dark periods 24 hours a day, without daily and seasonal variability. The artificial systems may even collect and store solar energy to release light efficiently over a longer period. The 20- to 25-year levelized costs of algae oil production of sunlight systems and artificial light systems should be considered in the design process.
Site Infrastructure. Most algae production facilities have a considerable investment in site infrastructure. The amount of capital invested in a unique application is an additional risk factor for project developers, investors and financiers. The amount of permanent infrastructure&mdash;concrete, buildings&mdash;reduces flexibility of a project to adapt to changing technologies and different operations. Permanent infrastructure is also at risk if water availability or quality changes, reducing algae production and project viability at a particular location. Pond system infrastructure is permanent and cannot be relocated. Photo bioreactor systems have significant capital investment, but can be relocated with varying costs.
Rewards of Risk Assessment. In the rapidly developing algae industry, risks are being considered for open pond, photo bioreactor and hybrid systems. The design and siting of systems incorporate varying amounts of risk and risk tolerance. Projects should be designed with risk factors considered on the front end to develop a sustainable, financeable algae production system. One can imagine an open pond system near the equator, adjacent to the ocean to minimize water and sunlight risks; or one that is mobile, scalable to a particular size by adding or subtracting interconnected modules, utilizing artificial light to optimize algae production on a 24-hour basis, extracting oil for biodiesel production that can, in turn, be used as a backup fuel, using algae biomass as a fuel or feed product, contained in a manner to minimize water usage.
Alberta, Canada-based Symbiotic Envirotek Inc. developed a system of isolatable modules that are insulated, portable and scalable to form a biofield of the desired size with microalgae yields forecasted to be four times of first-generation photobioreactors, with a smaller ecofootprint. To optimize such a closed, mobile system it must be closely monitored for water usage, nutrient availability and control. Mobility would allow different uses for varying periods of time and additional financing mechanisms. If modules are considered equipment, financing could be enhanced by accelerated depreciation and equipment lease and financing.
OriginOil developed advanced harvesting and extraction technology used in open systems in Australia, which can be applied to other systems. OpenAlgae also developed a harvesting, dewatering and extraction system using a lysing technology. Mcgyan Biodiesel LLC developed a catalyst technology to convert oils to biodiesel, which can include algae oil separately or with other oils in a cost-efficient modular system. The National Algae Association has taken a project approach with engineering and financing groups and is developing a 100-acre closed system (photobioreactors) designed to avoid or minimize risk.
New venture financing will frequently accept higher risk profiles, but in the technological algae development boom, adaptability to new technologies will also be a key factor. Each project will need to address risks involving light (energy), water quality and quantity, operations, including qualified personnel; and technological risks and obsolescence. The projects that analyze and address these in designs and systems will likely be rewarded with project financing and sustainability. Author: Mark J. Hanson Attorney, Stoel Rives <a href="mailto:mjhanson@stoel.com">mjhanson@stoel.com</a>

Water, light, site infrastructure and risk are key considerations for algae projects

Algae Project Scale and Risk

The Japanese nuclear disaster makes it clear the world is in dire need of clean, safe, reliable (renewable) energy alternatives. Biofuels are a major component of this need; more specifically, algae is feedstock for tomorrow&rsquo;s fuel, and the high-energy crop far exceeds other biofuel options. A mix of biofuels is necessary, however, to bridge tomorrow&rsquo;s energy demands, and reduce and sequester the ever problematic carbon dioxide (CO2) emissions glut.
CO2 is one of the essential components required to grow algae, along with sunlight, water and nutrients. The technology is in relatively early stages, used in smaller settings such as breweries, but global power projects are also interested. It may be a while before it&rsquo;s brought to full-scale commercialization, however, all components exist&mdash;particularly a need for high-energy biofuels. Carbon capture and storage (CCS), or carbon sequestration, is a growing science. This involves geologic sequestration in oil production and coal recovery projects&mdash;replacing recovered methane gas with CO2, natural aquifer sinks for CO2&mdash;such as those in the North Sea.
Of the gross total daily CO2 emissions on a global basis, China is the highest emitter, followed by the U.S. and the EU. CO2 is by far the greatest greenhouse gas by volume, but others (methane) are much worse. Sequestration means are constantly being evaluated by those major emitters such as chemical and power generation plants, and oil and ethanol refineries.
Some estimates indicate at least 75 million metric tons of CO2 are emitted daily from a wide variety of sources. Natural processes such as photosynthesis and natural oceanic activity are major carbon sinks. The ocean has traditionally absorbed about 25 million metric tons of carbon but it&rsquo;s becoming more difficult for the oceans to absorb CO2 naturally. Many think the oceans are becoming saturated because atmospheric CO2 is also elevated, and the oceans&rsquo; pH is dropping toward an acidic state, where &ldquo;oceanic acidification&rdquo; may become a major problem. Acidification will damage and kill marine life such as coral reefs, perhaps indefinitely.
Algae produced for biofuels markets will become a major component of the advanced biofuels sector. Algae is an extraordinarily energy-rich crop, exceeding the energy value of soy by 30-fold. A small amount of physical space is required to produce sufficient algae to replace all domestic petroleum needs. Requirements 
Studies suggest two pounds of CO2 on average is utilized per each pound of algae grown. This can be as low as one pound per pound, and as high as three pounds of CO2 per pound of algae. Growth settings include raceway configurations, vertical thin sunlit bioreactors, open ponds and coastal sea operations. Best suited algae operations for CO2 are a function of strain selection, project size and geography, and the presence of adverse temperatures and other conditions. If the CO2 were delivered via pipeline, and because of the gas&rsquo; corrosiveness, the delivery system should be constructed of a high-density polyethylene (HDPE) versus the standard, more costly stainless steel. The CO2 would probably be introduced into the pond, bioreactor or raceway as a gas, and the commodity is stored, piped and transported as a liquid. Small operations might start with so-called microbulk storage tanks, which can hold from 400 to 600 pounds. Larger operations would use on site, vacuum-insulated liquid storage vessels or refrigeration systems to maintain pressures under 300 psig, and temperatures near 0 degrees Fahrenheit. Delivery to the algae system might be a series of diffusers, similar to those used in water treatment applications for CO2, and the piping from the storage to the application site could be composed of stainless steel, or type &ldquo;K&rdquo; copper tubing. The systems could be operating on timers, with or without a flow meter, however set to inject a given sum of CO2 into the growth medium. The storage, deployment and hardware for CO2 use is rather simple, but CO2 is essential for algae growth.
It is logical to evaluate more enriched forms of CO2 from industry, such as ethanol plants. The power industry is the worst offender by volume of CO2, and the unique nature of hot flue gas from them could apply well to certain blue-green algae that endure heat from the Yellowstone Park geysers. Power plant CO2 is lean in content compared to ethanol refining effluent or anhydrous ammonia production, with raw gas, water saturated basis of 98 to 99 percent volume or greater. These &ldquo;clean sources&rdquo; generally don&rsquo;t include sulfur, heavy metals or heavy hydrocarbons. The flue gas from combustion of coal and natural gas can range from 14 percent volume in the raw gas with coal fired plants to 3 percent from a turbine exhaust source. If concentrating CO2, costs become significant but concentration has not yet been considered in the algae project tests and pilot ops within the power sector.&nbsp;
One such power plant algae project is in Southeast Queensland, Australia, owned and operated by MBD Energy and a research cooperative. It is moving forward with an algae synthesis system, whereby the Tarong Power Station flue gas will be injected into wastewater, which contains nutrients, along with sunshine, for production of select algae in a (membrane-based) closed system structured to be a large raceway project. The algae mass is expected to double every 24 hours and be harvested daily and crushed to produce algae oil suitable for biodiesel, meal for cattle feed and clean water. The crude mass for cattle feed contains from 50 to 70 percent crude protein, and feeding trials are being conducted at James Cook University. The ultimate operating project is planning an 80-hectare site sequestering more than 70,000 metric tons of CO2 from the flue gas, and producing 11 million liters (2.9 million gallons) of oil plus 25,000 metric tons of algae meal. This form of bio-CCS algae sequestration is similar to the earth&rsquo;s natural carbon cycle, however, it is accelerated exponentially, taking only a day. Other applications for the oil beyond biodiesel include jet fuel production and bioplastic materials. Beyond feed the meal can be used in plastics and fertilizers. The algae product yields 35 percent oil and 65 percent meal. The project has Australian government funding and will lead the way throughout Australia for similar projects.
U.S. power plant algae endeavors are underway, some are feasibility and pilot studies, many funded by U.S. DOE&rsquo;s $1.4 billion Clean Coal Power Initiative. Applications for federal and state funding and initiatives for algae-based sequestration have taken place with Arizona Public Service Company, Duke Energy, NRG, Southern Company, and American Electric Power Co.,&nbsp; to name a few. The power industry has been the major component of CO2 emitters to evaluate, test and work on developments toward sequestering CO2 via algae growth. The methodology surrounds a rather methodical selection of the best-suited strains of algae, usually capable of enduring SOx, NOx and other compounds, including heavy metals from the power plant flue gas, as well as being tolerant to high temperatures. Other criteria for selection of algae strains are driven by those that yield high amounts of oils and starches. The point of application has been tested in bags, vertical bioreactors, raceways and ponds.&nbsp; Conceptually, the algae are harvested daily in a large or commercial-scale facility. The Future&rsquo;s Choice
Many forms of sequestration will be needed beyond a cap-and-trade system. Some estimates consider at least 50 million metric tons of CO2 are emitted to the atmosphere daily, beyond what the oceans, photosynthesis and other natural means can absorb. This number is likely to grow, with the so-called BRIC countries, growing rapidly. As they grow, so do carbon emissions. Further, the battle against deforestation places added stress on the whole CO2 emissions equation, which removes a significant natural carbon sink: photosynthesis.
Many strains of algae are being investigated to fit niche markets, such as those which retard extreme heat or cold, or grow during the nighttime with minimal light. Specific algae strains will eventually meet extreme or unique physical conditions for growth. The end result will be extracting the oils for fuels, plastics and other products, and the use of the algae meal for numerous markets. The strains of algae may be derived from far-flung African swamps to frozen, high-altitude snowfields in South America. The strains selected to endure the harshest of temperatures and other physical conditions are vast, and commercialization to fit many conditions is one of the most viable concepts ever developed to meet tomorrow&rsquo;s renewable energy needs. Author: Sam A. Rushing CEO, Advanced Cryogenics Ltd. (305) 852-2597 <a href="mailto:rushing@terranova.net">rushing@terranova.net</a>

An opportunity to sequester carbon and foster algae production

CO2 and Algae Projects

The U.S. DOE&rsquo;s National Renewable Energy Laboratory has a rich history when it comes to algae research. Its landmark program, known as the Aquatic Species Program, is commonly considered the bedrock of the modern algae industry. While the program was discontinued in 1996, the close-out report NREL researchers complied at its sunset is still considered to be the primary source on algae for companies entering the sector. Algae research was revived by NREL in 2006, and has since achieved many promising benchmarks.
The Aquatic Species Program was quite well known for as establishing the state of technology for algal biofuels, says Phillip Pienkos, acting group manager of the applied sciences group at NREL. &ldquo;It was a comprehensive effort applied across the entire value chain,&rdquo; he says, from basic biology and bioprospecting, to strain improvement, cultivation, harvesting, conversion and economic analysis.
At the time the program was discontinued, even the most optimistic analysis of available data showed algae biofuels were still far too expensive to compete with petroleum. &ldquo;The most optimistic projection was somewhere on the order of $40 per barrel for algae oil, compared to the price of petroleum, which was about $20 per barrel [at that time],&rdquo; Pienkos says. &ldquo;The best prognostication of that period suggested that oil was going to remain at $20 per barrel for the foreseeable future.&rdquo;
&ldquo;The low cost of petroleum really took the wind out of the whole biofuels arena,&rdquo; Pienkos continues. &ldquo;The DOE decided to cut back on funding, end the algae program, and focus [almost exclusively] on cellulosic ethanol. Of course, the foreseeable future ended a lot sooner than anyone expected.&rdquo;
By 2008, the price of oil had reached all time highs. &ldquo;As we were moving in that direction, there was a sense that we really needed to reevaluate our commitment to biofuels,&rdquo; Pienkos says. In 2006, the DOE and USDA produced a report that has widely become known as the &ldquo;Billion Ton Study.&rdquo; The report determined that the U.S. could produce approximately 1 billion tons of terrestrial biomass each year. According to Pienkos, analysis clearly showed that terrestrial biomass could not alone meet our nation&rsquo;s fuel needs, especially when one considers that that biomass is a sought-after feedstock for many other industries, including the heat and power sectors.
&ldquo;When that study was done, it became clear at NREL and at other places that there was perhaps a need to reevaluate the decision that was made to end research into algal biofuels,&rdquo; Pienkos says. In 2006, it was decided to bring NREL back into the game.
While petroleum companies traditionally showed little interest in cellulosic ethanol, NREL anticipated it might be interested in forming partnerships for algae research. Indeed, the oil industry did show interest, due in part to the fact that algal lipids make a better feedstock for their refinery operations.
A research agreement was established with Chevron in 2007, breathing life back into NREL&rsquo;s algae program. &ldquo;That really helped us get back on the map,&rdquo; Pienkos says. &ldquo;Although as a flagship program, [cooperative research and development agreements] are rather unsatisfactory because we can&rsquo;t really talk about the work. Our management and scientific leaders here at NREL recognized the value of algal biofuels, and NREL made available internal funding to allow us to make some strategic capital purchases and do some remodeling of our labs to restore our ability to grow algae and actually support some research projects. Through this internal funding, we began to build a series of projects that we could actually talk about and help better establish ourselves as a lead organization in algal biofuels.&rdquo;
NREL&rsquo;s primary focus in algae research is biology. &ldquo;There are a number of reasons for that,&rdquo; Pienkos says. &ldquo;If you do economic modeling and you do sensitivity analysis, you see that the biological productivity [of algae] is by and large the major cost lever for algal biofuel production.&rdquo; There are a lot of numbers and goals tossed around when it comes to productivity and lipid content, however, the ranges most often cited by industry ultimately result in huge changes in the calculations and projections of the cost per gallon of algae oil. &ldquo;That drives a lot of people to the basic biology,&rdquo; Pienkos says. One reason NREL is here, he adds, is to help identify how to achieve high growth rates, while achieving high lipid content. Featured Research 
One internally funded NREL project focuses on finding better ways to extract lipids from algae cells. The project led by NREL researchers Eric Knoshaug and Henri Gerken, centers on the use of enzymes.
&ldquo;It&rsquo;s difficult to get oil out of the algae,&rdquo; Pienkos says. &ldquo;Extraction requires things like dewatering the cells to the point of dryness. Even with that, you can&rsquo;t necessarily count on the solvents getting into the cell and being efficient at extracting the oil.&rdquo; The use of solvents also generally requires a great deal of energy, in terms of mixing or disrupting the cell walls.
&ldquo;One thought that we had was if you found enzymes that could help degrade the cell wall, that would facilitate the extraction of the lipid,&rdquo; Pienkos says. &ldquo;It might also allow the lipid droplets to simply escape from the cell so that you might not even need solvents.&rdquo;
There are two possible ways to exploit the use of these enzymes. &ldquo;One is to take your algae and concentrate them some way in an aqueous slurry, throw enzymes in and weaken the cell wall to get the oil out,&rdquo; Pienkos says. &ldquo;Another way is actually to engineer the algae so that under controlled conditions they produce those enzymes themselves. You would harvest the cell, process it in some way, and all of a sudden they would begin to weaken their own cell walls, [which would] reduce the cost and the energy necessary for lipid recovery.&rdquo;
While Knoshaug and Gerken are working on methods to more efficiency extract oil from algae cells, Lee Elliott, a PhD candidate at the Colorado School of Mines who works as a researcher at NREL, has been traveling around the Southwest collecting native algae strains.
The project Elliott is leading was funded by the Colorado Center for Biofuels and Biorefining (C2B2). During the summers of 2008 and 2009, Elliott collected more than 70 water samples from areas in California, Nevada, Utah, Colorado, New Mexico and Arizona.
Back at NREL, he worked to isolate algae strains found in the water samples, resulting in about 360 individual isolates. Once the strains are isolated, they are screened to identify promising strains in terms of lipid production and growth rates.
The bioprospecting portion of Elliott&rsquo;s project is now complete, but a similar project is under development to collect strains from regions in Canada. That research is being developed through a partnership formed between the DOE and the Canadian National Research Council.
Elliott says he should be done screening the algae samples he collected by the end of the year. It has not yet been determined who will have access to the samples once lipid screening is complete. &ldquo;Other people are interested in screening this [collection] in more detail and for other products,&rdquo; Elliott says. This includes screening for carbohydrate levels, characteristics relevant to hydrogen production, and protein content. In addition, Elliott notes that some may be interested in screening for toxins. A lot of algae produce toxins that may actually be valuable, he says.
Another NREL researcher is working to develop a mathematical model that could expedite the process to measure the lipid content of algae cells. &ldquo;My work is mainly focused on understanding the biochemical composition of microalgae biomass,&rdquo; says Lieve Laurens, a research scientist in NREL&rsquo;s National Bioenergy Center.
Laurens uses near infrared spectroscopy to determine the composition of algae samples. The testing method is allowing Laurens and her team to develop mathematical equations that can predict lipid content based on a spectra fingerprint.
Traditionally, the lipid content of algae cells has been measured by using highly toxic and carcinogenic solvents to extract the oils. After the oil is extracted, gas chromatography is used to analyze the individual lipid types present in a biomass sample. The entire process is extremely labor intensive and can take several days to complete, Laurens says.
Spectroscopic fingerprinting, on the other hand, takes a matter of seconds. Using the mathematical models Laurens and her team are developing, the lipid content of an algae cell can be estimated in under a minute.
The completion of a feasibility study was the first step in developing the prediction models. The results of that study were published last year. Since that time, work has continued, and Laurens says the project is progressing nicely. &ldquo;The more samples we collected, the more fingerprints we have,&rdquo; she says. &ldquo;For all these samples, we also have the actual measured concentrations [of oils]. So, now we have models we can actually apply to new samples as well.&rdquo;
While there is still a bit of uncertainty associated with the mathematical models, Laurens says her team is working to improve them and reduce the level of uncertainty. One clear benefit of the method is that it is nondestructive. This means that the algae cells aren&rsquo;t destroyed during the evaluation.
The method being developed by Laurens and her team is clearly beneficial in a lab setting, where researchers need to process a large number of samples as quickly as possible. However, the models might also be useful in commercial applications. Those who produce algae commercially will need to have a method to monitor lipid content in real-time so that they can determine the optimal time for harvest. Near infrared spectroscopy could allow commercial-scale producers to take a sample of their algae culture and determine its lipid content in a matter of minutes. Into the Future
Now that NREL is back in the algae game, Pienkos says he expects the lab to continue to be a leader in the industry. &ldquo;I think [algae] is an ideal subject for NREL research because there remains a lot of technical hurdles, and there remains quite a bit of uncertainty,&rdquo; he says. &ldquo;Although there has been a significant amount of large-scale investments in algae, there still remains a lot of uncertainty in the short-term, and with commercialization in general.&rdquo;
Many of the technical hurdles identified during the Aquatic Species Program still remain, he continues, noting the best cost projections still show that algae is too expensive to compete with oil. That said, Pienkos continues, the strategic value of algal biofuels when it comes to energy security implications and greenhouse gas reductions is far too important to pass us. &ldquo;We need to continue doing this work, even it if takes years to accomplish, simply because the need is so great,&rdquo; he says. &ldquo;And the risk is high enough that you can&rsquo;t expect private industry and private investors to necessarily shoulder the burden.&rdquo;
The government and national labs can really help the entire industry move forward by helping to reduce risk and stimulating private investment, Pienkos adds. &ldquo;I think algae biofuels are going to require a bit more R&amp;D,&rdquo; he says. &ldquo;Some of the R&amp;D, especially in the algal biology falls into a sweet spot for our research, so I think that we have an important role to play in accelerating the path to commercialization.&rdquo;
Regarding the future of the algae industry as a whole, Pienkos says that he thinks the new wave of companies entering the space has already peaked. What we&rsquo;re seeing now, he says, is some new companies entering the space and very quickly taking prominence. In many cases, those are companies that have either developed a game-changing technology or have identified a niche in the field that allows them to stand out.
Rising oil prices are certainly helping to drive all forms of biofuel research. &ldquo;There is no question about that,&rdquo; Pienkos says. However, it is important to ensure algae companies are cost competitive with low petroleum prices. &ldquo;The worst that could happen,&rdquo; he says, &ldquo;would be for an undercapitalized company to make its move towards commercial production and then have the price of oil depressed for a period of time, driving them out of business.&rdquo; Author: Erin Voegele Associate Editor, Algae Technology &amp; Business (701) 560-6986 <a href="mailto:evoegele@bbiinternational.com">evoegele@bbiinternational.com</a>

The National Renewable Energy Laboratory's groundbreaking algae program hit a snag in the “90s, but has since been revived

Making History

Margaret McCormick, chief operating officer of Targeted Growth Inc., was standing at a podium explaining the breakthroughs her team had made with cyanobacteria to a large crowd seated in a fancy conference hall in a downtown Seattle hotel in January, and after revealing the difference between a typical strain of cyanobacteria and a strain modified by Targeted Growth, McCormick had the entire crowd laughing. It was her description of that modified cyanobacteria that incited laughter from the crowd. Instead of a term more closely resembling the idea of &ldquo;superiority,&rdquo; or &ldquo;advanced,&rdquo; she pointed out to the crowd that her strain was significant because the strain featured a nice, fat beer belly. The funny thing is, she couldn&rsquo;t have described the algal cell any better. More importantly, it is work like Targeted Growth&rsquo;s to produce an algal cell with such a massive amount of lipid content that it coincidentally resembled McCormick&rsquo;s description that will undoubtedly contribute to the scale-up of the algae industry, regardless of how it&rsquo;s described.&nbsp;
McCormick and her team, which, since January, has formed an entirely new company based on their algae-strain success, aren&rsquo;t the only innovators focused on the algae biology portion of the value chain. There are a number of private entities, national labs and university-led programs searching for the ultimate strain. Some are focused on DNA and others on photosynthesis antenna length, and even others who just want to work with those focused on DNA or photosynthesis antenna length. And there is a reason why strain selection continues. As McCormick mentioned in her presentation, &ldquo;Environmental isolates of algae are not good enough&rdquo; to meet the industrial requirements of algae&rsquo;s next step, scale-up. Think of it this way: a major league baseball player wouldn&rsquo;t step into the batter&rsquo;s box with a tree limb from the backyard for a bat, although in theory it could work, just like a random strain of algae from some backyard pond might as well.
So while other developers flesh out the ideal length for a raceway pond or build new extraction systems via novel theories linked to cavitation, there is still reason to watch what those like Targeted Growth are doing, especially if one wants a glimpse into what the industrial strength strains of the scaled-up era will look like.
Hitting the Mark
&ldquo;About five or six years ago we decided to get into the bioenergy space,&rdquo; explains McCormick, &ldquo;and then about three years ago we started putting our molecular biology expertise towards algae, and more specifically, cyanobacteria.&rdquo; Now, led by McCormick, the group from Targeted Growth is branching out to focus exclusively on algae. &ldquo;When we started the program,&rdquo; she says, &ldquo;the idea was always that if we met our objectives, which were demonstrating proof of concept that we could engineer those superior strains&mdash;and that it looked like the algae industry was actually going to become a reality&mdash;then we would do the new company.&rdquo;
That new company has gotten off to a good start, and they have done it in a way similar to other superior strain seekers. &ldquo;We have spent most of our emphasis on the lipid production so far,&rdquo; she says. Those pathways that affect lipid production have been explored for a number of years, but the company&rsquo;s work on the accessory pathways in combination with the workable cyanobacteria strain is what McCormick believes sets her algae team apart. &ldquo;The main advantage of cyanobacteria is that all the tools are there for genetic manipulation.&rdquo; And the team has tried several. The strain features three manipulations, ranging from putting in new pathways, changing the timing of gene pathways so that you are turning the gene on or off during specific times of development, or even taking genes out, explains McCormick. &ldquo;We believe it is the various combinations that are going to make these strains successful.&rdquo; &nbsp;&nbsp;&nbsp;
One of the manipulations the team has already worked on has been to delete the cell&rsquo;s ability to convert surplus carbon into glycogen. The team deleted the GlgC gene, essentially helping the cell to allow that surplus carbon to become oil instead of glycogen. &ldquo;Our chief scientist says the only limit that we have is our imagination,&rdquo; McCormick says of the potential of the company&rsquo;s work on cyanobacteria, because &ldquo;all the tools are in place.&rdquo; TLA 3 is Coming
Not all algal strain development is about lipid content. Some research efforts are looking to develop weather tolerant strains, and others like UC Berkeley&rsquo;s Tasios Melis have been spending time developing TLA in microalgae, or truncated light harvesting antenna. &ldquo;The concept of TLA in mass culture prevents the early light saturation of photosynthesis,&rdquo; Melis says. &ldquo;It facilitates better light penetration.&rdquo; Better light energy equals better algae energy, according to Melis, which could come in the form of biomass, hydrocarbons or even pure hydrogen gas. The idea behind TLA work starts with chlorophyll levels in the microalgae. Chlorophyll acts as a sunlight absorber in the cells, essentially limiting (based on the amount of chlorophyll arrays present in the cell) the amount of sunlight that can actually be used by the cell for growth.
By truncating the sunlight receptors&mdash;the antennas&mdash;of the chlorophyll, Melis learned that sunlight could penetrate further into the cell and allow for more growth, 300 times more. More important to Melis&rsquo; work is the fact that he has something in common with TGI. Melis proved the effects of a mutated TLA microalgae cell. He&rsquo;s also made the cell available. His team put the TLA 1 strain into the chlamydomonas library just last year, and the strain has already been acquired by five universities, five private businesses and four government labs. Typically, Melis says, there are 600 chlorophyll units in a cell, and his goal is to reduce that level to 130. To do that, Melis started with DNA manipulation of the microalgae. There are genetic determinants, he says, that determine the size of the antenna. By inserting a piece of DNA into the nucleus of the microalgae cell the team forced the cells to mutate, and change the genetic makeup of the cells. The idea, Melis says, was to mutate the cells so a truncated antenna would be formed and then they could isolate those mutated cells. &ldquo;This is easier said than done.&rdquo;
During the first round of insertions nearly 10 years ago, it took the team roughly 6,500 screenings to find one bona fide TLA. The team tested the TLA mutant versus a wild strain and the results were startling. &ldquo;In the period of time it took each to reach the same level of density, the wild type accumulated 6.36 million cells per milliliter,&rdquo; he says. &ldquo;In the same amount of time the TLA accumulated 10 million cells per milliliter,&rdquo; adding that, &ldquo;the productivity, no matter how it was measured by three different approaches, appeared to be double that of the wild type under bright sunlight and under mass culture conditions.&rdquo;
Initially the team thought it would take until 2015 to reach the desired levels of chlorophyll units (130), but fortunately they were wrong. In 2005, the team had engineered TLA 2 which lowered chlorophyll units to 195 and in 2008 they did it again, creating TLA 3 that reached all the way down to 150 units. It takes a number of years for testing and accreditation of scientific work like his to be certified and ready for public use, Melis explains. The TLA 3 strain that is on the way will, he says, be applied to biomass, hydrogen production for microalgae and even cyanobacteria. Cancer Research
No one hopes companies or researchers like TGI and Melis succeed more than Karen Newell-Rogers, because Rogers has discovered a cocktail of compounds that when added to virtually any algae strain, will improve the lipid content. Her work on metabolic disruption technology (MDT) started in tumor research and was funded in part by Viral Genetics, but after applying her findings to algae, Viral Genetics thought it was so promising the company formed VG Energy to commercialize MDT.
In tumors, the process prohibits the tumor cells from burning fats, hindering the ability of the cell to generate the energy needed to fend off drug treatments like chemotherapy or radiation. In algae, MDT limits a cell&rsquo;s ability to burn fats and, as McCormick has shown, everybody likes a &ldquo;fat&rdquo; algae strain. Rogers says that there is a very important protein that facilitates the use of fat that is highly expressed in drug-resistant cells, called a mitochondrial end coupling protein. &ldquo;The drug-resistant cells are very capable of switching to the end-coupling protein as a method to burn fat,&rdquo; Rogers says. She began looking at plants under stress from extreme temperatures, from too much humidity and other conditions and found that plants have the same capacity to switch their source of energy to fatty acids as a mechanism for survival. &ldquo;So we began to look at algae,&rdquo; she says, &ldquo;and the first thing we discovered is that algae also have end coupling proteins,&rdquo; and she started to test her MDT approach at blocking pathways to those proteins.
&ldquo;If I put in the same kind of inhibitors that would block burning fat in a tumor cell,&rdquo; Rogers says, &ldquo;we can also block burning fat in those algal cells, and if we increase the concentration of the inhibitor, not only do they accumulate oil, they begin to secrete the oil in little droplets.&rdquo;
To prove her work, Rogers has been working within the Texas A&amp;M Agrilife facility where scientists have shown how well the MDT process works. The process involves treating algae with synthetic compounds, Rogers explains. &ldquo;They are metabolized and then they go away. We are not doing any kind of genomic modifications.&rdquo; She equates the process to adding fertilizer to a farm that is trying to produce oil. We can enrich the oil content on a per-cell basis roughly threefold, she says.
For the period of time the algae are affected by the inhibitors, they can&rsquo;t burn oil, and that is an advantage of using an MDT inhibitor approach. &ldquo;We can harvest the algae and we can either extract the oil or put in sufficient compounds where they spit oil out themselves. And that is a big advantage over trying to come up with a use for the biomass of dead algae.&rdquo;
Regardless of the approach used by companies like VG Energy or researchers in California, there are several things to remember about all of those efforts devoting thousands of beakers a year to algae. For one, these are the type of companies that will form partnerships, at least in VG Energy&rsquo;s view. Haig Keledjian, spokesperson for VG Energy, says not only does the company hope to partner with an established player in the young industry, but that companies like VG Energy &ldquo;are not in competition with the companies out there, we are an enhancer.&rdquo;
McCormick has her take on algae biology companies too. She asks the question, &ldquo;If we build it, will they come?&rdquo; If the work by companies like Targeted Growth, VG Energy or a handful of research efforts as good as UC Berkeley&rsquo;s are any indication, it seems awfully hard to say no. Author: Luke Geiver Associate Editor, Algae Technology &amp; Business (701) 738-4944 <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a>

These aren't your backyard variety algae strains—they are the future 

The Strength of the Strain

Ohio isn&rsquo;t the first place that comes to mind when the topic is algae. Traditionally, the Southwest has been the the focal point for algae projects under development, but that is about to change. The Center for Algal Engineering Research and Commercialization under development at the University of Toledo is focusing attention on the potential for algae cultivation in the Midwest.
The center was recently awarded a $3 million grant through the Ohio Third Frontier Wright Projects Program, which funds projects that provide cutting edge research activities within the state. The goal of the Third Frontier program is to support the development of new technologies or projects that ultimately benefit Ohio.
Work on the center, which will be located at the UT&rsquo;s Scott Park Campus of Energy and Innovation, is already underway. According to Sridhar Viamajala, assistant professor of chemical and environmental engineering, the center is scheduled to be up and running in late May or early June.
Ohio University and UT collaborated on the Third Frontier grant application, Viamajala says. &ldquo;We also had several industrial partners and projects [participate],&rdquo; he adds. &ldquo;As a consortium we applied for this grant,&rdquo; with both private partners and the university providing cost share.
Viamajala stresses that while the project will be housed at his university, it isn&rsquo;t all about UT. &ldquo;It&rsquo;s actually a consortium of several public institutions, as well as private enterprises in the state of Ohio that are involved in the project,&rdquo; he says, noting that both OU and UT have long, active histories in biofuel research, including work with algae. &ldquo;We applied for this grant with the intent to be able to develop R&amp;D facilities at both universities, where it would not just be lab-based facilities,&rdquo; but centers that go beyond lab development and bench-scale work. A primary goal of the center is to help members of industry complete larger-scale studies on algae technologies they are developing.
Many times members of industry have a great concept, but they might not know how to implement their idea and gather preliminary data that is necessary to secure grants and attract venture capital, Viamajala says. The new center will allow these companies an opportunity to collaborate with university researchers to validate their ideas. &ldquo;It&rsquo;s a win-win situation for everyone to have a center like this, with infrastructure that can help with algae biofuels research,&rdquo; he says.
&ldquo;The primary goal of the center is to provide the R&amp;D infrastructure for the development of algal biofuels and bioproducts,&rdquo; Viamajala says. The center itself will not only provide private companies with access to university researchers and experts, but will also allow them access to research infrastructure.
Many of the analytical instruments that are required for algae research are already housed at both UT and OU. &ldquo;We have the core sciences facilities already, with a significant amount of science and research infrastructure available at both universities that are directly related and applicable to algae research,&rdquo; Viamajala says. &ldquo;In addition to that, we felt there was a need to actually buy, install and operate equipment that would be directly usable for this type of work, [essentially] trying to take the commercially-viable technologies to a somewhat larger scale than bench- or lab-scale.&rdquo;
The center will feature both photobioreactors and raceway ponds. While they will not be of commercial scale, Viamajala says they will be large enough to provide meaningful data from a commercialization standpoint. He estimates that the photobioreactors will likely be in the 4 liter to 500 liter range.
The photobioreactors featured at the site will not be designed by UT. Rather, Viamajala says they will be either purchased from vendors or built from published plans. In addition, companies participating in the center are welcome to install their own equipment onsite. &ldquo;We&rsquo;ll provide some utilities and hookups, provide some monitoring, and things like that,&rdquo; Viamajala says.
UT has donated half an acre of outdoor space to the center as part of its cost share agreement. The site will also feature a greenhouse and approximately 3,000 square feet of lab space suitable for algae research. &ldquo;We can have smaller indoor reactors for lab tests, and also have outdoor reactors, both within the greenhouse and outside,&rdquo; which will allow for parallel testing activities, Viamajala says.
There are also plans to install downstream processing equipment at the center. &ldquo;We want to be able to go through the whole process of making fuel,&rdquo; Viamajala says. &ldquo;There are several alternative routes to do that. In general, what we are trying to do is buy reactors that may be useful in converting the algae biomass into products, such as biodiesel.&rdquo; There are also plans to investigate pyrolysis.
According to Viamajala, new startups are welcome to participate in the center, but he stresses that those companies should be aware that UT is not acting as a contract research facility. &ldquo;Our intent is to work with industry to develop their ideas and our ideas together, so that future technology can be developed,&rdquo; he says. &ldquo;Anyone who has an interest who can share some of the costs associated with running their project is welcome to join, as long as they understand that we are not a contract research agency.&rdquo; Partnering for Success
Algaeventure Systems Inc. (AVS) and Algisys have already formed a relationship with UT and the center. While many algae companies are focused on the production of fuels, AVS is primarily interested in the production of algae-based plastics, while Algisys is working to produce omega-3 fatty acids, such as EPA.
AVS is a spinoff of a company called Univenture, which was interested in developing algae-based packaging materials. The company has since developed several technologies to aid in algae production and processing. One of the primary difficulties identified by AVS was dewatering. It&rsquo;s like trying to remove food coloring from water, says David Coho, AVS&rsquo; vice president of sales and marketing. &ldquo;Current technologies use a high-energy centrifuge to separate that, which is very expensive,&rdquo; he continues. &ldquo;Our team developed a solid-liquid separation technology&rdquo; to dewater algae in a less energy intensive fashion. According to Coho, the technology received a merit award from the U.S. DOE&rsquo;s ARPA-E program.
Since then, AVS has continued to develop technologies related to the growth and biology of algae, as well as the extraction of oils. &ldquo;The major area we are focusing on is our REC technology, which is a rapid accumulation and concentration technology,&rdquo; Coho says. The process essentially utilizes a nonchemical, nonmechanical flocculating material to accumulate and concentrate algae.
According to Coho, participation in the UT algae center will allow his company to access pilot-scale extraction and lipid characterization equipment that will help expedite development of AVS&rsquo; technologies. The center&rsquo;s research staff also has expertise in finding high-value products and coproducts that can help support the commercialization of algae technologies. &ldquo;High-value products and coproducts will help algae startups as we pay our way to stay in the game so we can get to the fuels,&rdquo; he says.
Coho also notes that the center is proving to be beneficial to UT students. AVS&rsquo; relationship with the university has already led to the development of a student internship program that benefits students interested in algae. Our internship program has been highly successful, says Coho, noting that all of AVS&rsquo; interns are now employed full-time by the company.
AlgiSys has also begun collaborations with UT. We are really envisioning that UT will be a long-term partner on the R&amp;D side of our business,&rdquo; said Michael LoPresti, CEO and co-founder of AlgiSys.
According to LoPresti, his company currently intends to enter the commercial space in 12 to 24 months. &ldquo;We&rsquo;re an innovative sustainable biotech company that specializes in the production of omega-3 fatty acids for heart health applications and products,&rdquo; he says. &ldquo;We are primarily focused on the harvesting of EPA from algae.&rdquo;
AlgiSys intends to commercialize all aspect of algae cultivation, from growth to harvesting, and oil extraction. UT researchers have an area of focus around oil extraction, says Charles Roe, AlgiSys co-founder and chief technology officer. &ldquo;Our partnership with [UT and Viamajala] is really a means to cut our costs significantly,&rdquo; he adds, noting that the vast majority of AlgiSys&rsquo; work at the center is expected to focus on oil extraction. The center offers us access to scientific expertise and equipment that will be beneficial to our company, he says. A Midwest Focus
UT&rsquo;s algal research center seems uniquely positioned to support the thriving Midwest algae industry. While the region might not be as widely known for its algae industry as the Southwest, Viamajala stresses that there are several factors that make Ohio and other Midwestern states uniquely suited to algae production.
There are several advantages of working in the Midwest, he says. First, and perhaps the most important, is water. The Midwest has ample supplies of water needed to grow algae. The region is also centrally located to most fuel markets and distribution centers, and has a rich history in the manufacturing sector. &ldquo;With the economic downturn, there are a lot of skilled workers and people who find themselves out of jobs,&rdquo; Viamajala says. &ldquo;You wouldn&rsquo;t necessarily have to train a lot of people. There is already a workforce available that could be employed in this region.&rdquo; Coho adds that the region also has a strong agricultural background.
We think that northern climates offer a lot of advantages over southern climates for algae production, Hummell says. Algae growth is a natural occurrence in this region, as evidenced by the enormous amount of algae present in our lakes and water systems, he points out.
While Viamajala notes there might be some seasonal limitations for growth, he says they shouldn&rsquo;t be too severe. We would expect algae production to be less productive during the coldest few months of winter, he says. However, there should be at least 300 days of solid production each year. It&rsquo;s also important to remember that not all areas of the Midwest have the same weather patterns, he says. Many areas actually have relatively mild winters.
It&rsquo;s clear that UT&rsquo;s algae center is providing enormous benefits to local members of the algae industry. &ldquo;We think that this center is a huge step forward with Ohio becoming a center for algal and clean water research,&rdquo; Hummell says. &ldquo;We have commercial companies that are in this space. Now we have the state&rsquo;s engagement. By Ohio getting this&nbsp; center, they have really put a stake in the ground to try to keep some of the [university and private] talent here.&rdquo;
&ldquo;The algae industry is a very exciting industry to be in,&rdquo; Roe says. &ldquo;It&rsquo;s in its early stages. It almost reminds me of when the internet was first getting off the ground. It took awhile and there were a lot of startup companies, some of which did well, and some of which did not. But, I really do think the algae industry has a very bright future.&rdquo; Author: Erin Voegele Associate Editor, Algae Technology &amp; Business (701) 540-6986 <a href="mailto:evoegele@bbiinternational.com">evoegele@bbiinternational.com</a>

A new research and development center in Ohio helps spur the development of a regional algae industry

Making It Work in the Midwest

1. Members of the Algal Biomass Organization went to Washington in April for a two-day fly-in visit with members of Congress on Capitol Hill to drive home the message of job creation, and technology and feedstock parity. Executive Director Mary Rosenthal says the algae industry will play a significant role in growing the U.S. economy. Rosenthal estimated there are currently more than 60 universities in 41 states that have research activities involving algae. &ldquo;Right now, we feel that algae employs, either directly or indirectly, more than 20,000 workers at approximately 100 companies,&rdquo; she says. &ldquo;As the industry matures, based on a study we did in 2010, we expect that this industry could employ more than 200,000 skilled workers by 2022.&rdquo; Rosenthal says the ABO was adamant about algae&rsquo;s inclusion as part of the cellulosic biofuel carve-out in the RFS2 and that it receives the same $1.01 per gallon cellulosic biofuel production tax credit. Additionally, the ABO advocated continued funding from the DOE, defense department and USDA to continue not only R&amp;D developments today, but also to further scale-up efforts towards commercialization. The ABO visit consisted of more than 40 meetings with various members of Congress. 2. PetroAlgae has formed a partnership to upgrade the Melbourne, Fla.-based company&rsquo;s algae oil technology, and the upgrade comes from known, traditional methods: catalysts. Through a new agreement with Haldor Topsoe A/S and its U.S. subsidiary Haldor Topsoe Inc., PetroAlgae will now use catalysts provided from the subsidiary&rsquo;s Houston headquarters to enhance the oils produced through its algae refining process that includes coking and pyrolysis. The agreement will also allow PetroAlgae to test the algae biomass produced from its system in refinery cokers and &ldquo;validate the commercial viability&rdquo; of the process according to John Scott, chairman of PetroAlgae. In a statement on the partnership, Niels Sorenson, CEO for Haldor Topsoe A/S, touts the ability of PetroAlgae to produce at a cost-competitive level compared to fossil fuels, adding that &ldquo;Haldor Topsoe is committed to renewable fuels and we are excited about implementing projects that will help reach the goals set for renewable fuels around the world.&rdquo; 3. Atlanta is the new home for an Australia-based algae developer&rsquo;s photobioreactor manufacturing facility. The 18,000 square foot plant will fabricate Algae.Tec&rsquo;s algae production system that is based on readily available technology, according to Peter Hatfull, managing director for the company. Hatfull spoke with Algae Technology &amp; Business about the new plant and the company&rsquo;s establishment of a level-one American Depository Receipt Program that will allow Americans to buy stock in the company during his North American tour. Hatfull says, &ldquo;The nice thing about the technology is that we are using a relatively standard 40-foot shipping container, which is available just about anywhere.&rdquo; The Algae.Tec platform is based around a controlled environment within the shipping container that maximizes surface area and sunlight penetration, allowing the algae to grow. The systems are suited for carbon capture and algae oil production, the company says. Hatfull explains that all of the cost estimates have been for a 500-module system, which he says is a relatively small plant. &ldquo;If we look at a 500-module plant, the capital cost for putting that together, everything from light collectors, CO2 collectors and engineering costs, is about $64 million.&rdquo; He says each module is about $125,000. 4. Morrisville, Penn.-based BARD Holdings Inc. recently announced its shift from research and development to the commercialization phase of its algae production technology. According to Avery Hong, BARD&rsquo;s chief global strategist, the company has completed the first phase of its production rollout. Its initial facility, located in Morrisville, is expected to produce approximately 40,000 gallons of algae oil per year. &ldquo;We are a photobioreactor-based company,&rdquo; Hong says. &ldquo;We&rsquo;re using photobioreactor tubes and we&rsquo;re using an artificial light source as the light energy.&rdquo; The system is able to operate 24-7, he says, and the closed-loop system also mitigates problems associated with contamination and culture crashes. In fact, Hong notes that BARD has yet to experience a culture crash, and expects that track record to continue. In addition, the system is scalable and modular, and units can be brought online with a relatively short lead time, partly because the photobioreactor equipment can be installed in existing industrial spaces such as unutilized warehouses. Hong has ambitious expansion goals. &ldquo;Our production schedule is to get significant [capacity] up and running in 2011,&rdquo; he says. &ldquo;BARD&rsquo;s expansion schedule is not a mid-decade [timeframe].&rdquo; Rather, plans are already underway to bring capacity online as soon as possible.&nbsp; By late summer, BARD has plans to be operating a second production facility, which will feature 280,000 to 300,000 additional gallons of algae oil production. 5. Ft. Collins, Colo.-based integrated algal technology developer Solix Biofuels Inc. has secured $16 million from inside investors as part of a Series B finance round. Bohemian Ventures, The Southern Ute Alternative Energy Fund and I2BF Global Ventures all participated in the round. In conjunction with the financing, Solix changed its name to Solix BioSystems to better reflect its role as a leading provider of algal production systems. According to Joanna Money, vice president of business development for Solix, the new funding will help drive the commercialization of the company&rsquo;s trademarked algae growth system&mdash;or AGS&mdash;which utilizes Solix&rsquo;s proprietary, high-productivity photobioreactors. Additionally, Money told Algae Technology &amp; Business that the impetus behind Solix&rsquo;s name change is aimed towards a customer base that may be interested in deploying its technology within a build/operate model. Since 2008, Solix has successfully demonstrated the viability of its AGS technology at its pilot facility in Ft. Collins. In 2009, Solix successfully scaled its AGS technology at its Coyote Gulch demonstration plant near Durango, Colo., which features three algae cultivation basins on three-quarters of an acre. The plant has more than 150,000 liters of algae under cultivation, according to the company. In 2010, Solix produced 3,000 gallons of algae oil per acre per year in its Lumian AGS4000, according the company, and has cultivated algae continuously in its Lumian AGS for 3 years with no culture crashes. 6. James Liao, professor of chemical and biomolecular engineering at UCLA, has developed an algae process for biorefining that, when compared to current process methods focused on lipid extraction, is just the opposite. Liao and his team from UCLA published their findings after three years of work, and he explained to Algae Technology &amp; Business what they found during their research. &ldquo;Basically,&rdquo; he says, &ldquo;we&rsquo;ve developed a technology that can use protein as a raw material for a biorefinery, and for making biofuels.&rdquo; The way people are currently utilizing algae is by artificially starving the algae to induce the strains to produce lipids, which will eventually be extracted and used as oil for biofuels. In this process, Liao explains, the algae species become sick and don&rsquo;t grow as well or as fast as they otherwise may. &ldquo;We reasoned that if we could use proteins as a resource instead of lipids,&rdquo; he says, &ldquo;we could bypass many of these difficulties.&rdquo; Liao believes his approach to algae benefits from the fact that certain proteins that cannot be used for food are the main components in photosynthesis and carbon dioxide fixation. &ldquo;The protein is a machine that harvests the energy that fixates the CO2,&rdquo; he says. &ldquo;So if you want a cell to grow fast, you need the cell to have a lot of proteins. If we want the cell to fixate a lot of CO2, to grow very fast, to fixate a lot of sunlight, the cell needs a lot of proteins to do the job.&rdquo; 7. Monsanto Co. is entering the algae business after announcing a collaborative effort with Sapphire Energy to utilize Sapphire&rsquo;s algae research abilities. Monsanto hopes to discover genes that could potentially increase crop yield or reduce crop stress in one of its core products, corn, cotton or soybeans. The new algae venture is a first for Monsanto, Kelli Powers of Monsanto&rsquo;s public affairs department tells Algae Technology &amp; Business. &ldquo;For us, we have a pipeline and obviously that first step in our pipeline is discovery,&rdquo; Powers says. &ldquo;We see algae research that Sapphire is doing as a promising tool to screen genes early in that discovery process and to identify promising traits that could help with yield and stress.&rdquo; The research efforts will take place at one of Sapphire&rsquo;s New Mexico locations, and according to Powers the work will begin right away. Robb Fraley, Monsanto&rsquo;s chief technology officer, says the research will help the agricultural developer find promising genes faster, and the two companies &ldquo;face a common goal in looking for ways to improve upon an organism&rsquo;s ability to achieve greater productivity under optimal and suboptimal environmental conditions.&rdquo; For Sapphire, the announcement with Monsanto comes only a week after the company was listed by the Wall Street Journal as one of the top 10 most promising clean technology companies. 8. California-based Aurora Algae has completed construction on its demonstration-scale facility in Western Australia. According to Scott McDonald, Aurora Algae&rsquo;s chief financial officer, the facility is currently undergoing commissioning and inoculation, and is scheduled to be fully operational by the end of March. The company has also established new corporate headquarters in Hayward, Calif. CEO Greg Bafalis says, &ldquo;Our new facilities in Hayward and Australia were completed ahead of schedule and under budget, accelerating our ability to support and drive our initial customer and partner engagements. The combination of our proprietary algae strains and production process, combined with the ideal growing conditions of Western Australia, will fundamentally change the economics of algae production.&rdquo; Aurora Algae&rsquo;s technology is focused on the use of open raceway ponds to cultivate algae. According to McDonald, the company&rsquo;s ponds have been specifically designed to be energy efficient, thereby increasing the economical feasibility of algae production. &ldquo;A lot of it has to do with fluid dynamics,&rdquo; he says. &ldquo;And, being able to do that in an energy efficient way. A primary cost of operating open ponds is the movement of water&hellip;which requires power. The fluid dynamics and the way [our] raceways are constructed allow for less consumption of energy.&rdquo; The Australian demo includes six one-acre raceway ponds, four 400-square meter ponds, and four 50-square meter ponds.
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People, Partnerships & Deals

Algae is feedstock, a solution for national security, the environment and our economy. It is one of several solutions that have been proven capable of providing a new range of biofuels that can help reduce U.S. dependency on foreign oil while creating green jobs in America. &ldquo;Their high oil and biomass yields, widespread availability, absent (or very reduced) competition with agricultural land, high quality and versatility of the byproducts, their efficient use as a mean to capture CO2 and their suitability for wastewater treatments and other industrial plants make algal and aquatic biomass one of the most promising and attractive renewable sources for a fully sustainable and low-carbon economy portfolio,&rdquo; states the European Algae Biomass Association. &ldquo;Algae have the potential to produce considerably greater amounts of biomass and lipids per hectare than terrestrial biomass, and can be cultivated on marginal lands, so [it] does not compete with food or other crops. Algae can be cultivated photosynthetically using sunlight for energy and carbon dioxide as a carbon source. They may be grown in shallow lagoons or raceway ponds on marginal land or closed ponds.&rdquo;
The problem in the emerging biofuels industry is not lack of research or technology. One issue that has resulted from 50-plus years of government-funded research is that the researchers are trying to either find or create the &ldquo;perfect&rdquo; algae before going into production. What they do not realize&mdash;or choose to ignore&mdash;is the fact that you may not be able to replicate on a commercial-scale what you can create in a laboratory. We know what works well now. Why should we waste another 10 years waiting for some lab to decide that its species is the best of the best, and the years of arguments that are sure to follow, when we could be scaling up production now and deciding which is best later? After all, according to the U.S. DOE, this is a $66 billion dollar industry. There is plenty of room for a lot of different strains.
The problem is that there is not enough feedstock to test the existing technologies at commercial-scale, let alone enough to supply the biorefineries.&nbsp; My biorefinery contacts all said the same thing: they cannot secure enough feedstock to make their operations profitable.
Potential oil yields from certain algae strains are projected to be at least 60 times higher than from soybeans, approximately 15 times more productive than jatropha and approximately five times that of oil palm per acre of land on an annual basis (Rodolfi et al., 2009). For example, soybeans can produce 48 gallons per acre per year, while algae can produce 1,000 to 5,000 gallons per acre per year, according to the DOE&rsquo;s Algal Biofuels Roadmap. So why are we not producing more algae?
Algae has emerged as one of the lowest-cost feedstocks for the biofuels and cellulosic industries. It is considered to be a promising source of renewable oil that can be processed and refined into a variety of transportation fuels. Recent breakthroughs in raceway pond development and closed end loop systems put algae oil production companies on the leading-edge of the renewable oil industry. All we need is a little equity investment funding and our pre-laid plans will take care of the rest. If biofuels are going to the marketplace, that move will likely be driven by the private sector. But care must also be taken to prevent this from becoming another dot-com investment fiasco. When I read business plans and public filings, and talk to potential investors, I always ask the same question:&nbsp; &ldquo;Do you have feedstock supply contracts?&rdquo;&nbsp;&nbsp;
Without feedstock, you cannot make oil, and without oil, we will never reduce our dependence on foreign oil. What we might do is replace our dependence on OPEC oil with that of other countries.&nbsp; When Boeing announced its partnership with U.S. government agencies and Chinese research institutions and state companies including Air China Ltd. and PetroChina Ltd., a Boeing official was asked why the initiative was taking place in China rather than in the U.S. His response was that &ldquo;they&rsquo;ve made the decision to move faster&rdquo; (Canadian Business, May 26, 2010). U.S. equipment manufacturers are forced to seek international markets because that it where they can earn revenues. We as Americans cannot afford to allow that to happen. Author: Barry Cohen Executive Director, National Algae Association (936) 321-1125

The Time for Commercialization  is Now

Algae-based biofuels remain one of the most promising opportunities for domestic development of sustainable renewable fuels. Several hurdles remain, however, including the lack of demonstrated projects, the need for large equity investors and waning public support for the use of government incentives to promote alternative fuel development.
Laboratory- and pilot-scale algae-based biofuels projects have long promised high yield-per-acre production numbers compared to those of first-generation ethanol production, but without the environmental footprint, consumptive water use or perceived competition with food supplies. Algae-based biofuel production is not only less resource-intense, it actually requires the consumption carbon dioxide, the most prolific of the so-called greenhouse gases and the recent target of the U.S. EPA&rsquo;s new regulatory and air permitting agenda. This element promises a potentially symbiotic partnership with some of the largest carbon dioxide sources and some of the most innovative technological advancements of our time. Promises and potentials aside, the challenge now is to bring those opportunities to bear in commercial-scale production facilities.&nbsp; The challenges are many. To realize commercial-scale, algae-based biofuel production, a company needs strong investors, proven and bankable technology, an effective business development and deployment plan and the intellectual property portfolio to demonstrate its ability to develop and protect its technology.&nbsp;
A number of developers have brought algae-based biofuels to pilot-scale, but far fewer are on the verge of commercial-scale production. Companies thought to have the greatest opportunity to produce at commercial scale in the near-term are those that have partnered with large, private investors and traditionally petroleum-based fuel producers. Petrol-based producers have a unique opportunity to invest in biofuels, have more access to necessary infrastructure and are more likely to invest in drop-in, fungible fuels that can be used in existing infrastructure and engines, as opposed to the ethanol- and biodiesel-blended fuels.&nbsp;
To date, almost all of the major petroleum-based fuel producers, including Chevron, ExxonMobil, BP and Royal Dutch Shell, have partnered with investors to promote the development of algae-based biofuels. In February, however, Royal Dutch Shell announced that it was pulling the plug on its algae investment to focus on other alternative technologies. That move does not appear to have shaken the algae industry and proponents remain confident of the biofuel&rsquo;s long-term success. Algae developers have also enjoyed significant attention from the aviation-fuel sector, as a number of major airlines have entered into off-take agreements with producers. The U.S. Navy continues to conduct test flights in an attempt to reach its stated goal of buying 336 million gallons of biofuel a year by 2020. Despite these successes, continued economic and political uncertainty present significant barriers to the domestic commercialization of algae-based biofuels.
At the time this article was drafted, President Obama had just presented to Congress a proposed budget that included $8 billion in federal expenditures for renewable energy project research and development and financing support, while calling for significant cuts in tax breaks for the oil industry, amounting to $46 billion in cuts over the next 10 years. At the same time, Republican members of the House of Representatives have introduced continuing budget amendments that would significantly curtail incentives for the domestic development and production of biofuels; specifically, the Republican amendment currently being considered would eliminate funding for the DOE loan guarantee programs, which have helped fund numerous alternative fuels development projects, and would significantly curtail EPA&rsquo;s ability to implement its renewable fuel program, a significant driver for the research and development of alternative fuels.
Internationally, continued unrest in the major oil-producing countries in the Middle East&mdash;witness the uprisings in Egypt and Libya&mdash;have driven up oil prices, providing the biofuels industry with an opportunity to grow since oil price increases drive increases in feedstock prices and overall energy costs. What this all means for the future of commercialization of advanced biofuels such as algae is unclear.&nbsp; What is clear is that market forces in the near-term are more likely to determine winners and losers than will policy developments. Author: Anna J. Wildeman Attorney, Michael Best &amp; Friedrich (608) 283-0109 <a href="mailto:ajwildeman@michaelbest.com">ajwildeman@michaelbest.com</a>

Commercialization of  Algae Projects: Hurdles Remain

Those of us of a certain vintage will remember an advertising slogan from years ago that told viewers &ldquo;this is not your father&rsquo;s Oldsmobile.&rdquo; The progress the U.S. algae industry has made in just the past five years reminds me of that slogan&mdash;the algae technology today is vastly different from the U.S. DOE&rsquo;s Aquatic Species Program of the 1970s and 1980s. This is not your father&rsquo;s algae.
As the contents of this issue make quite clear, two separate but closely related trends make this an especially exciting time to be involved in algae: one, the growth in the number of sustainable end products and applications for algae; and two, the continued integration of algae technologies up and down the industry value chain.
Certainly, the development of algae-based fuels will continue to be a major focus of our industry. The growth of this sector has been remarkable; between 2005 and 2009 alone, the number of algae-to-energy startups more than tripled. Algae-based fuels have been successfully tested in a range of engines and vehicle types, and there are numerous demonstration- and commercial-scale facilities coming online in the next two years. Commercial production of algae-based transportation fuels is real, and it will happen sooner than many people think.
At the same time, a growing number of companies are exploring other algae end products and applications. This includes the production of algal biomass for both human and animal nutrition, including nutraceuticals. As the world seeks to increase global food supplies to meet demands of a growing population, there is no doubt that algae will be an important part of the solution. Companies and researchers are also using algae as a source for a range of other high-value bioproducts, including bioplastics, cosmetics, biochemicals, and pigments, to name just a few.
As you will also read in this issue, the unique ability of algae to biologically sequester and beneficially reuse carbon means that algae technologies are being deployed to help large-scale emitters address their carbon footprint. What many see from a process perspective as a waste stream&mdash;that is to say, carbon emissions&mdash;the algae industry sees as a high-value input in the production process. The co-location of algae production facilities with industrial emitters is a trend sure to stay.
While the number of products and applications for algae are continuing to expand, researchers, entrepreneurs and companies are finding ways to integrate the industry&rsquo;s multifaceted value chain.
Many companies remain focused on algal biology, working to identify and in some cases enhance strains with defined yield characteristics and profiles, depending on the desired end products. Others remain focused solely on growth systems, whether autotrophic, heterotrophic, open or closed, indoors or outdoors. Still more are working hard on extraction and dewatering systems that are central to improving the overall economics of algae production. And a few are working on technologies in which algae directly secrete advanced biofuels.
And then there is the crucial component: a growing awareness among potential end users&mdash;from the U.S. Department of Defense to industrial emitters to food companies&mdash;of the potential of algae-based technologies and end products. This awareness is something we have worked hard to foster and will continue to do so. As companies begin to form strategic partnerships and identify mutual opportunities, it will further drive the industry&rsquo;s growth.
Moving forward, look for these two important trends to continue: a growing range of end products and applications for algae, with the technologies to produce them becoming more closely tied together. And that is something that bodes well for the future. Author: Mary Rosenthal Executive Director, Algal Biomass Organization (763) 458-0068 <a href="mailto:mrosenthal@algalbiomass.org">mrosenthal@algalbiomass.org</a>

Not Your  Father's Algae

There are a number of technical challenges and social and policy issues that need to be resolved before fossil fuels can be totally replaced. The algal biofuels consortium created by the U.S. DOE is working towards overcoming many of these technical challenges.
The National Alliance for Advanced Biofuels and Bioproducts was created in early 2009 through the association of 14 academic institutions, 12 industrial partners and two national laboratories, led by the Donald Danforth Plant Science Center in St. Louis. NAABB partners believe that in order to make an impact on the algal biofuels industry, three major objectives must be addressed: The development of technologies for cost-effective production of algal biomass and lipid; development of economically viable fuels and coproducts; and provision of framework for a sustainable algal biofuels industry.
In September 2009, NAABB submitted a proposal to the DOE, which developed a holistic research program including discovery, development and demonstration pathways for algal biofuels. In January 2010, DOE Secretary Steven Chu announced NAABB&rsquo;s award: as a public-private partnership, the NAABB will devote $49 million of federal funds along with about $20 million of cost-share commitments from its partners to the development of these objectives. The NAABB framework for a sustainable algal biofuels industry includes a research program in algal biology, cultivation, harvesting and lipid extraction, conversion into fuels and coproducts, enveloped by a sustainability modeling and analysis program. Program Highlights
NAABB&rsquo;s algal biology program focuses on the development of strains of algae that have high biomass and lipid production performance and can be safely deployed. The goal is to increase the overall productivity of algal biomass accumulation and lipid/hydrocarbon content by mining the natural diversity of algal strains, and performing mutagenesis for increased lipid production. Systems biology approaches for lipid production include knowledge gathered through genomics, proteomics, and transcriptomics of developmental and production algal strains. The NAABB crop protection projects involve adaptive evolution and genetic modification of algae to develop desirable traits. This program maximizes yield through nutrient, ionomics, and metabolic regulation. Maximizing lipid production involves deep understanding of the lipid secretory and packaging systems in algae through transcriptomics and manipulation of these organisms through genetic modification. The work also involves maximizing hydrocarbon production of algae through regulation of the terpenoid pathways in algae.
The development of scalable cultivation practices in various environments is part of the NAABB concept. NAABB partners are exploring cultivation in arid, semi-arid, wet, and marine environments. New tools are being developed and used to measure productivities under climate conditions that simulate variations in light, air and pond temperatures for seasonal variations in different regions of the country, and are able to feed this information into robust models. This work will increase overall productivity by optimizing sustainable cultivation and production systems. Furthermore, NAABB is addressing methods for optimization of photobioreactors and open pond cultivation.
It is well accepted that the development of cost-effective, energy-efficient harvesting and lipid extraction technologies will make a major impact to this industry. Therefore, NAABB is investing in the development of harvesting technologies using innovative acoustic focusing, electro- and chemical flocculation systems, and new materials concepts for traditional membranes. New lipid extraction technologies are being worked on that involve innovations in acoustics, mesoporous nanomaterials and amphiphilic solvents.
The development of cost-effective, drop-in transportation fuels from algae is the key goal. NAABB is developing technologies to convert lipids/hydrocarbons and biomass residues into useful fuels. The program involves understanding the physical and chemical properties of algal biofuels and their thermophysical and transport properties. NAABB is developing lipid conversion to fuels via catalytic decarboxylation and deoxygenation, and catalytic and supercritical transesterification. The biomass conversion program involves catalytic gasification, thermochemical gasification and power generation, fast pyrolysis and hydroprocessing, and anaerobic fermentation to organic acids and gasoline products.
The coproduct development program can add profitability and flexibility to the industry, as biofuels markets develop. Developing agricultural coproducts for livestock and mariculture feed includes the production of lipid-extracted micro- and macroalgae (LEA), testing the nutritional content of LEA, live animal and mariculture studies, and the development of processes that will lead to certification of LEA feeds. The program also involves the development of synthetic natural gas production, thermal energy from LEA, and bioplastics from proteins and lipids and feedstocks for the fertilizer industry. The overall success of the algal biofuels industry is dependent on the development of sustainable practices that are energy efficient, environmentally friendly and economically viable. To do this, NAABB is quantitatively assessing the energy, environment, economic viability and sustainability of algal biofuels processes through economic analysis and models, global analysis, and life-cycle and process analysis. This will lead to appropriate resource management, including carbon dioxide, nutrients, water and land. Author: Jos&eacute; A. Olivares Executive Director, NAABB (505) 663-5210 <a href="mailto:olivares@lanl.gov">olivares@lanl.gov</a>

Overview of NAABB's Algal Biofuels Consortium

Welcome to the inaugural issue of Algae Technology &amp; Business. For years now, specifically in publications such as Biodiesel Magazine, which I have been a part of for more than six years as a writer, senior writer and lead editor, anything related to algae has been hot and highly read on the websites. Interest in algae has not subsided. In fact, it has increased during the past several years.
Our coverage of the developing world of algae is not exclusive to fuels, a sector garnering a lot of attention because of the profound need for energy independence and security, not to mention the environmental position that the Earth, and by extension all of our lives, would benefit from transition to a renewable, sustainable economy instead of one built on petroleum. But fuels are a high-volume, low-margined business, and in order for the algae industry to mature to a point where it can profitably sustain an algal fuels economy, a series of developments&mdash;a growth process or maturation, if you will&mdash;must first be accomplished.
Interestingly, the petroleum industry makes its money on oil exploration and recovery, and crude oil is only refined into fuels and chemicals so that oil companies can market their main money maker, crude oil, to end users. Consumers consume the refined products, driving the need for more exploration and recovery. With finite oil reserves on the planet, this is clearly not a sustainable model&mdash;but it does represent industry maturity.
Thus, much algae work focuses on scale-up so that, one day, the industry can get to the point of development where refining algae into animal feed, pharmaceutical and nutraceutical products, intermediate and end-product chemicals and, yes, fuels, is simply a way to market algae to consumers. We are not there yet, but with the help of companies and organizations such as those you&rsquo;ll come across in this issue, one day we will.
Author: Ron Kotrba Editor, Algae Technology &amp; Business <a href="mailto:rkotrba@bbiinternational.com">rkotrba@bbiinternational.com</a>

New Era

10/25.&nbsp;What more appropriate place is there for a conference about an aquatic feedstock like algae than Minnesota, the Land of 10,000 Lakes? The 5th annual Algae Biomass Summit will take place October 25-27 at the Hyatt Regency in Minneapolis. This event unites industry professionals from all sectors of the world&rsquo;s algae utilization industries including financing, algal ecology, genetic systems, carbon partitioning, engineering and analysis, biofuels, animal feeds, fertilizers, bioplastics, supplements, foods and more.
Organized by the Algal Biomass Organization and coproduced by BBI International, this event brings current and future producers of biobased products and energy together with algae crop growers, municipal leaders, technology providers, equipment manufacturers, project developers, investors and policy makers. The event is considered a world-leading educational and networking junction for all algae industries.
Educational tracks at the event focus on biology, engineering, analysis, commercial activities, policy and financing; but education is only one of several reasons to go. The summit is where future and existing producers of algae products go to network with other industry suppliers and technology providers. It&rsquo;s where project developers converse with utility executives; where researchers and technology developers network with venture capitalists; and where Fortune 500 executives and influential policy makers sit side-by-side with project developers.
The event is the largest, fastest-growing algae conference of its kind. In 2011, this event is expected to draw nearly 900 attendees and exceed the previous year&rsquo;s attendance by almost 20 percent. This growth is powered by the current strength of the industry and the positive outlook for future algae producers.
The summit will help you&mdash;algae industry stakeholders&mdash;identify and evaluate technical and economic solutions that fit your operation. Get your plane ticket, reserve your hotel room and register for the conference today.&nbsp;

Algae Summit in the Land of 10,000 Lakes

Encountering red tape isn&rsquo;t new for alternative fuels such as biodiesel on their journey to acceptance as viable, on-road fuel. The same could be said for its off-road applications, specifically in maritime use. Perhaps no one understands the trials and tribulations of biodiesel better than Randall von Wedel who, in the early 1990s, was instrumental in helping biodiesel become accepted by boaters in the San Francisco Bay area.
 Recognizing biodiesel&rsquo;s inherently higher-quality air and water characteristics, von Wedel, a principal scientist at CytoCulture International and avid boating enthusiast, recalls a pivotal point in California where he saw an opening for marine operators to&mdash;by increasing their use of biodiesel&mdash;enhance performance in marine engines and reduce their carbon footprint. In 1993, the California Air Resource Board mandated that all high-sulfur No. 2 off-road diesel fuel be switched to what was called low-sulfur, low-aromatic, which inevitably forced oil companies to lower levels of aromatic compounds, such as benzene, in the fuel, von Wedel says. The switch also inevitably caused the gaskets and seals (or elastomers) in boat engines to shrink, he says, because they were designed to swell in the presence of those aromatic compounds found in high-sulfur diesel fuel. Shortly after CARB imposed the switchover, von Wedel and his colleagues published empirical data supporting the fact that biodiesel not only restored lubricity in marine engines, but, because of its solvent properties, allowed the membranes to swell up again. Von Wedel was vindicated.
 &ldquo;That launched biodiesel in California because there was so much publicity associated with using biodiesel in marine engines then,&rdquo; von Wedel tells Biodiesel Magazine. &ldquo;We were in the right place, at the right time and with the right fuel. I didn&rsquo;t design it&mdash;it just happened.&rdquo;
 Since that time, von Wedel&rsquo;s pioneering efforts with biodiesel in the Bay area resonated to other fleet operators and boat owners, such as the Red and White Fleet, which was interested in using biodiesel. As it turned out, Red and White became the first commercial adopter of biodiesel in ferry vessels in the Bay area. Since 2006, family-owned Red and White company has been using a B20 blend in its passenger vessels with no issues directly related to engine operability, according to Joe Burgard, director of operations for Red and White.
 &ldquo;We did have some bacteria growth early on, but we didn&rsquo;t attribute it directly to the biodiesel,&rdquo; Burgard says. &ldquo;I think early on there was a lot of inconsistency on the quality standards of biodiesel, but since we adopted it there have been no issues.&rdquo;
 Not only did ferry fleet operators in the Bay area express immense interest using biodiesel, but it also proliferated northward into Washington. In 2004, the Washington State Department of Transportation&rsquo;s Ferry Division conducted a pilot biodiesel fuel test over a four-month period using a B20 blend of soy biodiesel in three of its vessels. Although the operational issues were challenging, according to Paul Brodeur, director of vessel maintenance, preservation and engineering for the ferries division, the test was successful in that it helped him gather important information that would inspire a 12-month biodiesel pilot study in 2008 using blends of B5, B10 and B20 with ULSD in three of its vessels&mdash;the Issaquah, the Klahoya and the Tillikum. Currently, Brodeur says 15 of the 20 vessels run on a B5 blend, amounting to about 17 million gallons of biodiesel consumed annually.&nbsp;
 &ldquo;When that pilot test concluded in 2009, we went to the state legislature for some funding for ongoing biodiesel use,&rdquo; Brodeur says. &ldquo;We were later funded at a 5 percent level for the incremental cost of the biodiesel, and that was based on availability.&rdquo;
 Today, many marine operators across the country are either exploring the use of or are using biodiesel in their marine engines. For example, the Virginia Port Authority expanded its voluntary program in January of using B5 with ULSD in its diesel-powered machines owned by the VPA&rsquo;s operating company, Virginia International Terminals Inc. Also, the U.S. Navy, the largest consumer of diesel fuel in the country, is studying the long-term feasibility of integrating biodiesel and other renewable forms of biofuel in its fleet of ships to reduce its carbon footprint, NOx and SOx emissions and achieve a sustainable goal of buying domestic product. &nbsp;&nbsp;&nbsp;
 Things to Keep in Mind
 Several studies have been conducted to find which biodiesel blends interact best with marine engines. Marine engines are equipped to perform efficiently without incident on B5, but issues can occur when blends exceed that amount if the proper precautionary measures aren&rsquo;t met. Two of the prominent issues that arise when ship owners consider using blends above 5 percent include incompatibility with fuel filters, gelling and potential microbial growth in older fuel tanks. Of course, operational deficiencies related to biodiesel greatly depend on the size and duty-cycle of any given ship, Brodeur says.
 &ldquo;We&rsquo;re only burning B5 so the blend ratio is pretty low, so we wouldn&rsquo;t expect to have any issues,&rdquo; Brodeur says. &ldquo;When we did our pilot testing, we started having filter issues and some gelling issues occurred when we ran on B20, especially in colder weather.&rdquo;
 Brodeur recalls suspending the use of biodiesel when his B100 product stored in stainless steel totes began to gel when it was subject to temperatures of 20 degrees Fahrenheit. That was when his team manually blended their product, compared to now where they employ in-line blending systems at their fueling sites. Brodeur advises keeping a close watch on fuel clogging that can occur when B20 is used. &ldquo;Operationally, the biggest thing we experienced [with B20] was some premature filter clogging, so you have to stay on top of cleaning out your fuel transfer filters and your fuel purifier,&rdquo; Brodeur says. &ldquo;Issues like these happen at a much slower rate with B5 or B10.&rdquo;
 Another aspect to be mindful of, according to Brodeur, is to actively participate in proper fuel management practices by using additives or biocides to ensure fuel tanks are clean to reduce the fuel-water interface that can often create an environment suitable for microbial growth, commonly known as &ldquo;diesel bugs.&rdquo;
 &ldquo;If we get an active population of microbial growth, then we&rsquo;ll do a higher dosage to kill them, whether it is diesel fuel or a blended product, then we find ourselves in good shape,&rdquo; Brodeur says. &ldquo;It&rsquo;s not more or less indicative of whether you have a blended product or not. It&rsquo;s a marine environment where you have variables that can cause microbial growth other than biodiesel, like the tanks that are integral with the hull, varying temperatures, tanks sweat, condensation and so forth.&rdquo;
 Stricter Emission Standards Ahead
With more oceangoing vessels in use, and stricter fuel and air emission regulations in both domestic and international waters expected to go into effect in the next few years, biodiesel will play a progressively greater role. This was evidenced when, in October 2008, the member states of the International Maritime Organization agreed to amend the International Convention for the Prevention of Pollution From Ships (MARPOL) Annex VI, adopting new tiers of NOx and fuel sulfur controls. The most stringent of these new emission standards apply to ships operating in designated Emission Control Areas, including the newly-designated North American ECA.
 The revised MARPOL states that as of 2015, ship operators that trade in emission control areas will be required to burn fuel with less than 0.1 percent sulfur (1,000 ppm), which will help reduce SOx and particulate matter by more than 85 percent from today&rsquo;s levels, according to the U.S. EPA. The fuel sulfur limit allowable under MARPOL today is 10,000 ppm.
 Kevin Reynolds, senior marine engineer for The Glosten Associates Inc., an engineering and consulting firm based in Seattle, authored a report on exhaust gas cleaning systems used in ships for The Ship Operators Cooperative Program, which was released in February in light of the new MARPOL regulations that are set to go into effect. Reynolds says the study was designed to guide ship operators when faced with the dilemma of switching to expensive distillate fuel in ECA or install EGS and continue to burn high-sulfur, heavy fuels. He adds that the use of biodiesel in conjunction with ULSD is a solid option for ship operators looking for ways to comply with impending sulfur emissions as prescribed by the amended MARPOL requirement.
 &ldquo;Biodiesel in our view is certainly a low-sulfur option,&rdquo; Reynolds says. &ldquo;The challenge for these large oceangoing ships is that it&rsquo;s going to be very expensive relative to residual fuel.&rdquo;
 Reynolds continues, &ldquo;One of the biggest challenges in switching over to biodiesel is that it essentially scrubs the fossil fuel residue off your storage tanks and it tends to plug your filters, hence making the switchover process fairly painful. There&rsquo;s still some interest in using biodiesel by ship owners, but there needs to be continued pilot projects to get past compatibility issues, along with increased supply, as continually switching between biodiesel and fossil-based fuels could create unwanted incompatibility issues.&rdquo;
 As for NOX, the amended MARPOL requirements will mandate that all marine Tier III engines will have to install some form of aftertreatment technology by 2016. Von Wedel admits there while there may be a slight increase in NOx when using biodiesel, it would be eliminated with the utilization of both biodiesel and aftertreatment technology to comply with MARPOL NOx requirements.
 &ldquo;Biodiesel has good potential to assist in the role, but it&rsquo;s going to have to be in conjunction with proper additives or with aftertreatment, which will be very challenging for boats,&rdquo; von Wedel says.
&ldquo;Boats aren&rsquo;t set up for that and there&rsquo;s no market right now to build equipment to retrofit a boat or ferry to accommodate those stringent standards. But, in principle, it could be done.&rdquo;
 If You Build It, They Will Deliver
 As biodiesel usage increases by ships near ports and harbors, one might ask: is there an infrastructure at ports to support installation of fuel terminals to meet that demand? The answer is no, especially in the Bay area, according to Kent Bullard, a BQ-9000 consultant and biodiesel quality assurance consultant for Little Rock, Ark.-based biodiesel consulting firm Lee Enterprises Inc. &ldquo;There really isn&rsquo;t any access, at least here in Southern California, to biodiesel unless if you&rsquo;re having a fuel company come and service your boat by wet fueling then you can get access to fuel if you order it,&rdquo; Bullard says. &ldquo;If we could have biodiesel back at Ventura Harbor at the fuel dock, it would start moving again, especially now that biodiesel is becoming price competitive with diesel now.&rdquo;
 Bullard cites California&rsquo;s ongoing underground storage issue as one of the main culprits holding down the build-out of an infrastructure at ports for greater access to biodiesel in the state. In 2009, California&rsquo;s Water Resources Board expanded its approval for storing biodiesel blends in underground tanks from the existing B5 limitation to up to B20. A 25-year-old California law requires the storage of any chemical in underground tanks to be tested and independently certified as being compatible with the tank materials, Bullard explains. With only B5 blends having been tested, the water board approved a three-year emergency variance to allow higher blends up to B20 in double-walled tanks and piping that currently meet requirements for petroleum-based fuels.
 &ldquo;You have to provide a letter from all of the tank component manufacturers showing biodiesel compatibility for getting above B5 underground,&rdquo; Bullard says. &ldquo;Then you can apply for, and hopefully your local authority will grant you, a variance, which could take about a year and a half until you receive approval.&rdquo;
 In Washington, Brodeur faces the challenge of trying to get consistent access of biodiesel. Currently, the Washington ferries that traverse the Puget Sound region under Brodeur&rsquo;s watch are all fueled from three different locations. One, he says, is a fuel terminal that delivers blended fuel by boat (also called wet fueling) and the other is equipped with in-line blending capabilities. The third is in the process of having in-line blending equipment installed at the fuel pier in Seattle.
 While Brodeur admits that biodiesel is considered a boutique fuel in many port hubs across the country with limited to no state or provincial backing to support the build-out of an infrastructure for more widespread availability, he doesn&rsquo;t have any regrets for taking a chance on using biodiesel during its pilot studies.
 &ldquo;As long as we continue to receive the necessary funding to support the program, I&rsquo;m committed to moving the fleet forward with higher biodiesel blends, up to B20, because that&rsquo;s what we tested and that&rsquo;s what we know will work,&rdquo; Brodeur says. &ldquo;Beyond that, I think we would need to go into more of a pilot project if we were considering blends higher than B20. Certainly, B20 is doable and if we&rsquo;re funded to that level, I&rsquo;m committed to make that happen.&rdquo; Author: Bryan Sims Associate Editor, Biodiesel Magazine (701) 738-4974 <a href="mailto:bsims@bbiinternational.com">bsims@bbiinternational.com</a>

BIODIESEL ON BOARD: Family-owned Red and White Fleet has been using B20 in its passenger vessels without incident since 2006. 

2011/06/13080862998938.jpg

PIONEERING USE: Users in the San Francisco Bay area have been instrumental in getting biodiesel into maritime applications. 

2011/06/13080863378261.jpg

SIGHTSEEING: Marine applications are especially tough for biodiesel because of the moisture, turbidity and other factors that can cause fuel issues and microbial growth. 

2011/06/13080863709044.jpg

A high percentage of biodiesel is used by consumers on land, and marine operators are trying to match that same level of usage by sea

Biodiesel Sets Sail

The railroad is already considered one of the most environmentally sustainable and efficient ways to transport freight. Although most railways address fuel efficiency in terms of gallons-per-mile rather than miles-per-gallon, the sheer volume of cargo that can be moved by a single train results in a highly efficient operation.
 The U.S. Surface Transportation Board defines three primary categories of railroads in the U.S.: Class I, Class II, and Class III. Short-line railroads, those with annual operating revenue of less than $20 million, are primarily classified Class III. Regional railroads, those with annual operating revenue between $20.5 million and $277.7 million, are generally classified as Class II. The largest railroads in the U.S., defined by the STB as having annual carrier operating revenues of $250 million or more&mdash;are classified Class I. Currently, seven rail lines in the U.S. are recognized as Class I, including Burlington Northern Santa Fe, CXS Transportation, Canadian National/Grand Trunk, Kansas City Southern, Norfolk Southern, Soo Line and Union Pacific.
 According to the Association of American Railroads, Class I railroads alone operated more than 94,000 miles of track in 2009, with 24,047 locomotive engines in service. During the same year Class I railroad operationed 1.53 trillion ton-miles. A ton-mile equates to 1 ton of freight moved one mile. Furthermore, the AAR estimates that the average Class I train transported 3,546 tons of cargo 919 miles per trip.
 Most locomotive engines in the U.S. are powered by diesel, and the fuel they use to transport freight is not insignificant. Data published by the STB illustrates that the seven Class I railroads consumed nearly 964 million gallons of fuel during the first quarter of 2011, which is a slight increase over the more than 900 million gallons of fuel the same railroads consumed during the first quarter of 2010.The U.S. Energy Information Administration estimates that more than 2 billion gallons of distillate fuel oil were used by the railroad in 2009, representing a fraction of the 34 billion gallon on-highway market. However it is important to note that even a 2 billion gallon market represents the opportunity to blend 100 million gallons of biodiesel into a B5 blend, or 400 million gallons of biodiesel into a B20 blend of fuel.
 Some railroads are beginning to recognize the benefits associated with employing a renewable fuel in their operations. In fact, Amtrak and BNSF Railway Co. are each participating in long-term B20 trials. While there are obvious benefits of using renewable fuel in terms of energy security and reduced carbon emissions, those who wish to fuel locomotive engines with biodiesel face a different set of challenges than those using the fuel in on-road operations.
 &ldquo;The railroad industry is a bit different than trucking in that we use our locomotives for a very, very long time,&rdquo; says Marc Magliari, Amtrak&rsquo;s media relations manager, noting that there are still some locomotives in the U.S. that have been operating for more than 50 years. Perhaps most importantly, the reliability has to be incredibly high in order for biodiesel to be used commercially by railroads. While a company running a trucking fleet likely has &lsquo;spare&rsquo; trucks that can be utilized if biodiesel-associated issues pop up unexpectedly with one engine, the railroads do not have that luxury. Any fuel that a locomotive uses has to have little or no impact on locomotive reliability and availability, says Magliari. There really aren&rsquo;t spare locomotives a railway company can rent or otherwise utilize if one in their fleet becomes inoperable for a period of time.
 Amtrak Trial 
 Amtrak kicked off a one-year B20 trial in the spring of 2010. The trial, which wrapped up May 15, focused on the Heartland Flyer, a P32 model train purchased in the late &rsquo;90s that travels between Ft. Worth, Texas and Oklahoma City, Okla. While it will take several months to compile and analyze the data gathered during the trial, Roy Deitchman, Amtrak&rsquo;s vice president of environmental, health and safety, says preliminary results seem to indicate the fuel&rsquo;s performance has been acceptable. &ldquo;For the Amtrak part of the trial, we&rsquo;re very happy with the performance,&rdquo; he says. Magliari adds that the trial resulted in no problems related to operational reliability.
 The biodiesel fuel used in the trial has been manufactured using beef tallow as a feedstock. Magliari stresses that this was not an intentional decision made by Amtrak, rather beef tallow biodiesel simply happened to be locally available. The B20 was splash blended in a truck using ULSD, and directly introduced into the locomotive. In other words, the B20 blend was not stored in a tank prior to fueling the train.
 The trial, which was funded with a $274,000 Federal Railroad Administration grant along with support from the Texas and Oklahoma departments of transportation, includes several discrete components. Two of the 16-cylinder engine&rsquo;s assemblies were replaced with brand-new components at the start of the trial. According to Deitchman, detailed measurements of the gaskets and assemblies were taken at the start of the trial. Following the competition of the trial, a comparative set of measurements was taken.
 Emissions testing is also being completed as part of the project. &ldquo;A locomotive is difficult to emissions test,&rdquo; Deitchman continues. &ldquo;It has to go on a specially built dynamometer, and there are only two or three places in the U.S. that do that testing.&rdquo; For Amtrak&rsquo;s trial, the Heartland Flyer will undergo emissions testing at General Electric Co.&rsquo;s facility in Erie, Pa. &ldquo;The locomotive was built by GE, which is one of the reasons it make sense to take it back to its manufacturer [for emissions testing],&rdquo; Deitchman says.
 A third component of the project involves fuel efficiency. According to Deitchman, Amtrak&rsquo;s diesel-powered locomotives generally consume approximately 1.7 gallon of fuel per mile traveled. In addition to looking back on trial data, he says Amtrak will likely continue to operate the Heartland Flyer on biodiesel for a little bit longer, and then switch it over to ultra-low sulfur diesel fuel in an effort to determine if the fuel has any impact on mileage.
 According to Deitchman, Amtrak is interested in adding biodiesel to its fuel mix as long as the fuel is proven to be a viable option. Better mileage and reduced emissions would help motivate the company to utilize the fuel. One possible impediment is cost. Magliari notes, however, that the relative cost of biodiesel-blended fuel has dropped dramatically since Amtrak first started considering this trial five years ago.
 Montana Trial
 A similar one-year B20 trial is also being completed in Montana on the BNSF railway. The project, which wrapped up July 1, actually grew out of on-road biodiesel trial that was spearheaded by Montana State University-Northern and Opportunity Link Inc., a local non-profit. &ldquo;The [on-road] trials went so well and got so much press that [we wanted] to do a trial with some significance on the railroad,&rdquo; said Jessica Alcorn-Windy Boy, director of MSU-N&rsquo;s Bio-Energy Center. She emphasizes that the goal was not to simply run a train for period of time using a low blend of fuel, such as B5. Rather the goal of the trial was to gather long-term, scientific data that could address the severe winter conditions present in northern Montana.
 BNSF signed on for the trial. Two of the railway&rsquo;s locomotives have been employed in the trial. One is a control that operates using No. 2 diesel. The other has been fueled with B20 for one year. The identical locomotives were manufactured in the 1970s. While the locomotive technology is slightly older, those involved in the trial note the decision to use older locomotives was intentional as they are no longer covered by manufacturer warrantees.
 The B20 is blended onsite in a controlled environment using locally sourced biodiesel. Fuel samples have been taken from the locomotives on a regular basis and analyzed by MSU-N staff for fuel quality and biodiesel content. According to Nestor Soriano, Jr., lead research scientist at MSU-N&rsquo;s Bio-Energy Center, the monthly analysis also addresses oxidation, fuel stability, acid content and degradation. While most biodiesel produced in the U.S. is sourced from soy beans, the crop cannot be grown in northern Montana. Rather, the locally produced biodiesel used in the trial has been manufactured from alternative feedstocks sources, including camelina, canola and safflower.
 The fuel injectors in the engines also undergo regular testing. The locomotives are serviced after every 92 days of operation. Each time the trains involved the trial have been serviced, fuel injectors are removed from both locomotives. At the end of the trial, they will be supplied to the manufacturer, which will disassemble the injectors and analyze them for wear and other abnormalities.
 &ldquo;There is an emissions testing component of the study as well,&rdquo; said Soriano. During the summer, the team will borrow a portable emissions testing system from the National Renewable Energy Lab. Soriano says the equipment will allow his team to compare the emissions that result from the two locomotives.
 Economic development is another component of the project. According to Barbara Stiffarm, executive director of Opportunity Link, a primary goal of her organization is to increase local opportunities for economic growth. Biodiesel represents a significant opportunity for economic growth in the region, she continues. The goal is to keep the entire biofuel operation local, from cultivating the oil seeds, to processing, conversion and use. Stiffarm notes that Opportunity Link believes railroads could offer an important local market for biodiesel blended fuel.
 The data gathered by the trial could ultimately be used to support the establishment of a biodiesel mandate for locomotive fuel. &ldquo;We are hopeful that in the future there will be some sort of [renewable fuel] mandate in the railway industry,&rdquo; Soriano said. &ldquo;We want to identify the challenges that the railroad industry may face should that mandate come in&hellip;Hopefully, [if and when that mandate] is established, BNSF and others in the railway industry will have this data so they can be ready.&rdquo; Author: Erin Voegele Associate Editor, Biodiesel Magazine (701) 560-6986 <a href="mailto:evoegele@bbiinternational.com">evoegele@bbiinternational.com</a>

GREENING THE RAIL: Amtrak recently wrapped up a one-year trial of B20 in its Heartland Flyer. 


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FUELING THE FUTURE: Amtrak fuels the Heartland Flyer with biodiesel-blended fuel while photographers capture the fill-up. 


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USING LOCAL FEEDSTOCKS: A biodiesel trial in Montana is testing B20, manufactured using camelina, canola and safflower oils, in a BNSF locomotive. 


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Railroad companies investigate benefits of using biodiesel-blended fuels

Steaming Ahead to a Better Fuel

Aaron Levinthal is the first to admit that he didn&rsquo;t want to be in the generator business. He&rsquo;s a concert producer at heart; and if companies like Caterpillar or Kohler had listened to him five years ago, he would still be a concert producer. &ldquo;As a concert producer,&rdquo; he says, &ldquo;you hate hearing no, especially when I&rsquo;d given them a million dollars of business in one year.&rdquo; Levinthal&rsquo;s requests were pretty simple: run the generators powering events like the Tribeca Film Festival in New York City or a major concert in Central Park using biodiesel-blended fuel. The obvious reason Levinthal might have pointed to may seem to be the cleaner burning nature of the fuel, or the added lubricity the biodiesel could offer the generators that typically burn 35 gallons of fuel per hour, but for Levinthal, it wasn&rsquo;t.
 &ldquo;No one had requested it when I started using it,&rdquo; he explains. &ldquo;For lack of a better term, I had an epiphany one day that I&rsquo;m in the most wasteful business I&rsquo;ve ever seen. Something that is for entertainment purposes only shouldn&rsquo;t be doing the damage it&rsquo;s doing environmentally.&rdquo; So Levinthal entered into the diesel generator business, and today his business of powering concerts and events in the Northeast is booming, all because of B100.
 His company, GreeNow, isn&rsquo;t alone, however. Genset companies across the country are and have been using biodiesel blends for several years, but the success of GreeNow should be a reminder that vehicle fuel and home heating aren&rsquo;t the only markets biodiesel can reach. If the example of GreeNow doesn&rsquo;t ring loud enough, listen to what Levinthal explains as a typical occurrence at one of his events. &ldquo;When a client (like former American Idol winner Kelly Clarkson) makes an announcement about [B100 powering the concert], they get a pretty good cheer out of the crowd.&rdquo;
 GreeNow isn&rsquo;t Alone 
 SidRam Power Inc. has provided diesel generators to events everywhere from Florida to Georgia, and even to Singapore. Over the past four years, the Florida-based company has averaged roughly 535 events per year, and during that time, if a client asked for biodiesel, Jamie Mardis, president of SidRam Power, says that client got it. &ldquo;I think when our customers feel it at the pump and people start talking about it,&rdquo; Mardis says, &ldquo;that is when they start asking for biodiesel in their generators.&rdquo; And it&rsquo;s that very reason Mardis and his team started offering B20 to customers in the first place. &ldquo;When gas prices were going up,&rdquo; he says, &ldquo;we were looking for alternatives, and then our customers started asking for it.&rdquo;
 While Mardis explains that it was the customer requests that spurred his company to start providing a cleaner burning alternative, Joe Gere, marketing consultant for On-Site Energy, a genset provider that also uses B20, had an epiphany moment similar to Levinthal&rsquo;s. And if you know Gere&rsquo;s past, it&rsquo;s easy to see why.
 &ldquo;Me being a 9/11 survivor,&rdquo; Gere says, &ldquo;or whatever they call it with continuing health issues,&rdquo; is the main reason Gere first started pushing On-Site Energy to use biodiesel in the first place. &ldquo;I was the first AT&amp;T person on site and I suffered a lot of health problems from my exposure,&rdquo; and after that, he says, &ldquo;I was a champion of a cleaner-burning fuel and On-Site was totally behind it.&rdquo;
 On-Site Energy, SidRam and GreeNow are just a handful of companies that are linked to the biodiesel industry, and regardless of their reasons for running biodiesel blends to power their customers&rsquo; needs, all of the genset companies show reasons why producers shouldn&rsquo;t forget about events, emergencies and other situations requiring diesel-oriented power.
 The first thing to know about genset companies is that, in most cases, the clients will ask for the cheapest (which sometimes means the dirtiest) fuel available. As Gere explains, if a 500 kW generator is running at 100 percent load, it will consume 35 gallons of fuel per hour, totaling roughly 840 gallons per day. At $1 a gallon that is $840 dollars per day. From there, anyone can do the math and see that the price today would be quadruple that, which means in most cases &ldquo;the fuel costs more than the rental of the piece of iron,&rdquo; Gere says.
 For Mardis, the price of the fuel has made his requests for the use of biodiesel trend both up and down. &ldquo;The requests for biodiesel go in spurts,&rdquo; he says. &ldquo;It seems like the demand for biodiesel had gone down, mainly because the price of diesel had gone down.&rdquo;
 But those circumstances have changed, at least for Levinthal. &ldquo;Right now we have the advantage,&rdquo; he says. &ldquo;Biodiesel is cheaper than petroleum fuel at the moment.&rdquo;
 The price of fuel and the competitive locale of biodiesel compared to petroleum diesel, however, isn&rsquo;t the only factor that will push a genset company to use biodiesel. &ldquo;I can tell you that most of our biodiesel clients are doing events, something that is a high-profile event where green is of concern to them,&rdquo; Gere says. But the clients aren&rsquo;t the only ones creating a need for biodiesel in genset operation. Gere says the people who attend the events and live in the surrounding area of the event appreciate it when biodiesel is used. &ldquo;If there was a way to chart that, to show the positive impacts that were made by running the biodiesel as opposed to not running biodiesel,&rdquo; Gere says, &ldquo; I think more customers would opt to run the biodiesel.&rdquo;
 As for the physical advantages of running biodiesel, Levinthal can certainly attest. &ldquo;If you put bad fuel in a $100,000 generator and the light goes bad if there is a voltage fluctuation,&rdquo; the result can be a big problem, he says&mdash;especially if it&rsquo;s during a concert. All of the GreeNow generators are converted by eliminating the existing rubber hoses and yellow metals. &ldquo;Because we never put anything but B100 in them, I&rsquo;ve never had any problems. I get longer run time on my filters, and,&rdquo; Levinthal explains, &ldquo;my generators burn so much cleaner.&rdquo;
 For each event, SidRam goes through 200 to 1,500 gallons, and each week, the company orders 2,500 gallons of fuel. GreeNow is busy from April through November and Levinthal says the company keeps storage tanks and extra B100 at its offices. Even with as many gallons and events both companies are going through a year, the overall significance of their biodiesel use might not seem important. Fortunately, Steven Levy of Sprague Energy has a reason why every biodiesel producer should care about how the latest concert in its hometowns is being powered. It&rsquo;s called The BioGenset Project, aimed at educating and creating more genset biodiesel operation.
 The BioGenset Project
 Judy Jarnefeld, senior project manager for the New York State Energy Research and Development Authority, is helping Levy make the BioGenset project a success. The project was chosen, she says, as a business assistance program, &ldquo;so rather than helping somebody develop new intellectual property for a new product, we are helping them with marketing assistance and finding new customers, and new kinds of customers in new sectors.&rdquo; Those customers are the same ones that people like Levinthal or Mardis are targeting, customers who have power needs that can be met by using biodiesel.
 &ldquo;The point of the project was to help identify who those users were,&rdquo; she says, &ldquo;and then once they figured out who they were, to help educate them that they could use biodiesel and it would have benefits.&rdquo; For NYSERDA, the reason to help a project like this is also pretty simple. According to Jarnefeld, 85 percent of the petroleum used in the state of New York comes from foreign oil, &ldquo;so if there is something we can do to increase the percentage of domestically produced liquid fuel,&rdquo; she says, &ldquo;that is to our benefit.&rdquo;
 Levy says the program is geared toward three types of users. The first is a user looking to power an event, something like fashion week in New York City or the U.S. Tennis Open. The next group he says is for stationary emergency generators at buildings, in the event of a disaster or power outage. And the third user, he says, is the larger buildings where a diesel generator might be a primary, or in most cases a secondary, power source for that building. &ldquo;Everyone has been looking at reducing emissions for on-road vehicles,&rdquo; Levy says. &ldquo;This particular application is to reduce emissions and reduce our dependence on foreign oil for off-road applications.&rdquo;
 To do that, Levy has set up a website and will hold a workshop for interested parties on the advantages and requirements of participating in the BioGenset program, or simply using biodiesel in their generators. &ldquo;I think the objective of the program is to jumpstart the use of biodiesel in this particular arena and once users see that it&rsquo;s transparent to their use, they will incorporate it,&rdquo; he says, &ldquo;and even expand on their blends.&rdquo;
 To participate in the program, a genset user simply has to schedule a time with Levy that he can go over the generator&rsquo;s warranties, schedule a fuel delivery time and answer any other questions the user might have. Like Levinthal and Gere, Levy also says there should be no question about performance of biodiesel in genset use, and for the future success of the program or the chance that more biodiesel will be used in genset operations, he points to Sprague Energy&rsquo;s past with ULSD. Back in 1998 he says, the company started marketing ULSD 12 years before a national mandate, and historically the companies that Sprague worked with would demonstrate the product &ldquo;and after a month or two, they would expand the use of it in their fleets.&rdquo; This project is no different, he says, because it&rsquo;s &ldquo;bringing industry together and showing them the benefits.&rdquo; Some will change and use the products right away (as the example of ULSD use shows) and others will demonstrate it and see if they are comfortable with it.
 Fortunately for Levy, he won&rsquo;t be worrying too much about the BioGenset program, at least if he remembers the achievements of that former concert producer turned generator provider. He seems to be doing pretty well on B100-powered gensets, and if you don&rsquo;t believe it, listen to the crowd after Kelly Clarkson tells her fans the lights overhead are powered by biodiesel. Author: Luke Geiver Associate Editor, Biodiesel Magazine (701) 738-4944 <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a>

GREEN CONCERTS: GreeNow uses B100 in its mobile power gensets, which power concerts and other events in New York City and the Northeast.

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PIONEERING CHANGE: Sprague Energy began delivering ULSD nearly a decade before U.S. EPA mandated it, and Levy says getting customers used to biodiesel is very similar. 

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Why biodiesel is important to events and concerts 

Don't Forget  the Event

In my estimation, there is probably no application with greater potential for biodiesel than the off-road markets. The multibillion gallon U.S. heating oil market is a candidate, but then there is what some call the &ldquo;real&rdquo; off-road markets: tractors and combines, locomotives, marine vessels, stationary (or mobile) gensets, countless types of forestry equipment, loaders&mdash;the list goes on.
 Just like the drastic reductions in emissions that have taken place over the past decade for new on-road diesels, thanks to regulations set by U.S. EPA, off-road diesels are on the path to the same greener fate. Implementation dates are staggered for the various off-road sectors, but once they are phased in completely, the not-so-distant future holds a clean-air promise from all newly manufactured on- and off-road diesels. That means the near elimination of the black soot commonly associated with diesels, as well as nitrogen oxides (NOx), a smog-forming pollutant. The new off-road emission reductions will require the use of low and ultra-low sulfur fuels, not only to reduce sulfur dioxide emissions, but chiefly so expensive catalysts used in aftertreatment systems aren&rsquo;t fouled. The growing, positive body of work on how biodiesel interacts with these devices will certainly help ease people&rsquo;s minds about using biodiesel-blended fuels in the presence of aftertreatment systems.
 These upcoming emissions reductions are great for the environment, but once in effect, the regulations will only apply to new models. Diesels last a very long time. It is reasonable to think it could take 50 years or more to replace the pre-existing fleet. There are retrofit programs if environment-conscious farmers, loggers, contractors, engineers, ship captains or others in the off-road sector wish to voluntarily reduce their equipment&rsquo;s carbon footprint. These programs would help install particulate filters and NOx abatement devices (e.g., SCR systems) to drive down emissions and drive up its greener image.
 Certainly, incorporation of biodiesel is a seamless game-changer in reducing off-road fleet emissions. Biodiesel reduces particulate matter by nearly 50 percent compared to petroleum diesel. Total hydrocarbon emissions from biodiesel are 67 percent less. Carbon monoxide drops nearly 50 percent.
Sulfur emissions are virtually wiped out since biodiesel is a sulfur-free fuel. Health effects testing has shown cancer-causing polycyclic aromatic hydrocarbons (PAH), and the nitrated variety of PAH, were decreased by 75 to 85 percent, except for benzo(a)anthracene, which was reduced by half. Finally, I would be remiss not to mention the most clich&eacute;d line about biodiesel exhaust ever: it smells like French fries.

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Clean Burning

The flooded Mississippi River may be slowly receding, filtering back into its banks, but the damage has already been done. Pictures of soaked out homes and buildings, street signs poking through a wave of water or even distressed farmers looking across their fields covered by three feet of water clearly show the immediate effect of the culmination of heavy moisture that came at a bad time. As Bernie Crowley, vice president for Delta American Fuels, a biodiesel plant with a terminal on the Mississippi river, notes some of the photos out there sensationalize the damage, however, but some minimize it.
 The USDA&rsquo;s Under Secretary Dallas Tonsager has already toured everywhere from Missouri to Louisiana to assess the damage. Joining Tonsager on the tours was Michael Scuse, under secretary for Farm and Foreign Agricultural services at USDA. &ldquo;Our hearts go out to all of those affected by the disasters,&rdquo; Scuse said. &ldquo;Our first-hand assessments will allow us to identify the unique farm safety net and rural community development needs of the impacted region.
 Although it might be too soon to assess the flood&rsquo;s impact on biodiesel production, Crowley&rsquo;s attitude towards the flood may be an indication. As a soybean farmer himself, he says the good news is &ldquo;farmers, especially around here,&rdquo; have a good understanding of soybean planting requirements. If, he says, &ldquo;you get seven sunny days, you can get the planting done.&rdquo; And regardless of when the water fully recedes, the soybean fields will get planted&mdash;that, he says, will happen.
 &ldquo;It&rsquo;s going to be an expensive flood for us but it could&rsquo;ve been a lot lot worse,&rdquo; he says, pointing out that a high number of cotton acres will be lost as most cotton growers in the area plant in the low lying areas near the river.
 Through the Farm Service Agency at USDA, an emergency loan program is available to help &ldquo;producers recover from production and physical losses due to natural disasters.&rdquo; The loans are available as soon as any flooded counties are declared a Presidential or Secretarial Disaster county, according to the USDA.
 The water at Crowley&rsquo;s pier is going down, but reports from the state of Arkansas indicate that more water needs to be released into the river, essentially reflooding the river. Eventually, he says, they will be back in business.

SKILLED FARMERS: Bernie Crowley with Delta American Fuels says soybeans will get planted despite a flooded Mississippi River. 

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Luckily, soybean farmers know what they're doing

The Early Indications of a Flooded Mississippi

A well-structured indemnity provision is critical to ensuring both parties are protected in relation to breaches of an asset or stock purchase agreement. When negotiating an acquisition, the parties carefully allocate the risks between them through the use of warranties, representations and covenants. Indemnity provisions provide the mechanism by which those obligations are enforced and limit the parties&rsquo; exposure to delayed claims. This article will discuss the key terms of an indemnity provision and the considerations that go into negotiating such provisions.
 Survival provisions serve as a statute of limitations for claims related to the breach of an agreement. Obligations under the agreement are usually divided into two sets, one set that lasts indefinitely and a second set that lapses within one to three years of the closing date.
 The indefinite set usually includes obligations related to corporate authority, government authorization, environmental matters, taxes, employee benefits, related party transactions, and similar matters that could have large liability, could completely unwind the deal, or are completely within the seller&rsquo;s control.
 The second set of obligations usually lapses within one to three years of the closing date. These obligations generally include all business related representations and warranties, including those related to financial statements, the sufficiency of assets, the condition of assets, any material adverse changes, and litigation. The time lapse provides certainty to the seller, and breaches are generally discoverable before the time period lapses. The time period is generally set to match the term of an escrow, discussed below.
 Almost every party to an acquisition agreement recognizes that there will be small breaches that do not materially impact the operation of the business. Therefore, the parties often create a minimum threshold that must be crossed before the seller will be required to pay damages for a breach. The seller also desires to limit its potential liability. The primary mechanisms used to manage these risks are a &ldquo;basket&rdquo; and/or a &ldquo;cap.&rdquo;
 A basket is a threshold amount of damages that must be reached before a party is liable to pay any claims. There are two primary types of baskets, deductible baskets and first-dollar baskets. With a deductible basket, the seller only pays for indemnity claims that exceed the deductible basket threshold. In contrast, a first-dollar basket provides that once the basket threshold is reached, the seller is responsible for all claims, including those used to reach the threshold. Through negotiation, a party can also craft a hybrid of these approaches with different basket thresholds and deductible levels.
 A cap is a flat dollar limit on the claims that the seller and/or the buyer may be liable for under the agreement. A seller&rsquo;s liability is often limited to at least the purchase price, though it may be negotiated to a lower amount as well. While the cap may be as high as the purchase price, the ability to collect may be functionally limited to the escrow amount, discussed below. Often, a cap is inapplicable to the certain obligations due to the magnitude of the liabilities that may be covered, like environmental liability. A buyer may also seek to limit his liability for damages, though the focus is usually on the seller.
 The parties should also consider how damages should be measured. While terms like materiality and knowledge are carefully negotiated in various representations and warranties, sellers often seek to ignore such limitations when calculating indemnity claims. This increases the likelihood that a basket threshold will be reached. Both parties should carefully consider whether such a provision is appropriate in their particular deal.
 All the promises in the world are not worth anything if the seller distributes the purchase price and the buyer has to chase down every shareholder to recover the funds. For this reason, the parties often place a portion of the purchase price into escrow as security for indemnity claims. A common escrow amount is 10 percent of the purchase price, though the actual escrowed amount will depend on the risks involved in the transaction and the bargaining power of the parties.
 This summary merely scratches the surface of the complexity related to indemnity provisions. Any party to an acquisition should question their attorney about the risks associated with indemnity provisions and the ways in which indemnity provisions can serve that party&rsquo;s interests. Author: Drew D. Larson Attorney, BrownWinick (515) 242-2485 <a href="mailto:larson@brownwinick.com">larson@brownwinick.com</a>

2011/06/13080832622246.jpg

Understanding Indemnities  

For local fuel dealers, there is a lot of talk about state biodiesel initiatives and providing new opportunities in Bioheat and other off-road biodiesel applications. To this we say: &ldquo;Get in now and don&rsquo;t wait for the mandate.&rdquo;
 Dennis K. Burke Inc. is a family-owned fuel dealer that has been delivering premium fuels for more than 50 years. The Burke family shares a unique marketing experience on the road to bringing biofuels into the mainstream oil market. Servicing state and local biodiesel contracts for Massachusetts and New Hampshire, Burke gained years of biofuels experience in off-road applications and delivering Bioheat to many schools, government buildings and commercial properties.
 Burke began its journey with biodiesel began back in 1996, primarily offering B20 blends to fleets complying with EPAct. Biodiesel looked promising, but quality issues were concerning. As quality improved and tax incentives for biodiesel became available, demand increased. By 2002, Burke was well-positioned as a biodiesel blender for major fleet operators and had the only retail fuel pumps dispensing biodiesel within 100 miles of Boston.
 Looking back, who could have imagined all of the off-road applications for biodiesel that we have today? A few worth noting include the trailblazers at Massachusetts&rsquo; Taunton State Hospital, which initially began using a B3 Bioheat blend on the hospital&rsquo;s 500-horsepower Cleaver-Brooks boilers in November 2006. After three or four weeks, the blend was increased to B5, and by January 2007, it increased to B10. The engineers photographed and documented the boiler&rsquo;s improved condition and better performance. In 2008, the blend went to B20&mdash;and has been running smoothly since.
 Dennis K. Burke does not service residential heating accounts. As fuel wholesalers, the opportunity to blend Bioheat for our fuel dealer customers has worked well and provides a more natural fit to our business. Snow&rsquo;s Fuel Oil &amp; Propane is one of Massachusetts&rsquo; largest fuel dealers on Cape Cod. The company introduced B5 Bioheat as a home heating oil alternative in 2007. More than 350 current accounts switched to Bioheat, and it quickly added 60 new accounts. A few years ago, Massachusetts-based Alvin Hollis Oilheat introduced Bioheat as a home heating oil alternative and now services more than 1,000 Bioheat accounts. Construction firms are using biodiesel to green their fleets and equipment to meet environmental guidelines necessary to bid on many government and private contracts.
 From buses and trolleys to tour boats and water taxis, tourism dollars are creating a biodiesel boom in the Northeast. More and more off-road applications are seeing economic rewards in reducing emissions with biodiesel. You can spend a day on Boston&rsquo;s historic Freedom Trail and learn that many of the historic sites and public buildings are kept warm with Bioheat.
 Newburyport Whale Watch in Newburyport, Mass., is a great tale. In 2006, it started adding home-brewed biodiesel made from restaurant grease when fueling at the marina. A few years back it realized that biodiesel was fun, but the blending wasn&rsquo;t. It now fuels by truck with a B10 blend.
 You can take a B10-powered water-taxi to the shops across the harbor at Mid-Harbor Launch in Marblehead, Mass. The company converted all of its launch service and mooring equipment to B10 in 2008 and is very happy with biodiesel&rsquo;s performance.
 Recreational boaters in Rhode Island can pull up to the fuel dock at Port Edgewood Marina and fill up with a B20 biodiesel blend. Marinas are going green to keep their waters clean with B5 to B20 blends, and boaters are getting hooked on the benefits.
 In northern New England, it&rsquo;s all about the snow. Many ski slopes and resorts are concerned with the effects of climate change on their industry. Choosing biodiesel is one way for operators to emphasize their efforts in reducing greenhouse gases.
 At Toreka Tractor Sales in Ayer, Mass., every new tractor leaves the showroom with a fill of B5 in the winter and B20 during warmer months. Using biofuels on the farm is becoming more common in our area&mdash;the more Earth-friendly, the better. Buying local plays a big role in green culture, so there are marketing rewards for local farms using biodiesel and Bioheat.
 Working with biodiesel for 15 years, we&rsquo;ve learned this: Start with a better quality biodiesel feedstock, blend it with a premium quality diesel or heating oil, and you will sleep better at night. In the end, biodiesel and Bioheat have a role in energy policy and the mandates will eventually come. As for these biodiesel pioneers mentioned, like me, they enjoyed the journey. Author: Ed Burke Chairman, Dennis K. Burke Inc. (617) 884-7800 <a href="mailto:ed.burke@burkeoil.com">ed.burke@burkeoil.com</a>

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Creating New Opportunities Off-road  

For all of the well-funded algae development firms rushing to commercialization, there are also companies led by the likes of Kim Jones. As the founder of Alganomics, Jones and her husband aren&rsquo;t focused on global scale-up; they just want to make an impact in North Carolina through their work with algae. &ldquo;There is a greater interest in algae right now than there ever has been,&rdquo; Jones says. And she should know, after spending much of her academic career researching algae strains for uses that range from tumor treatments to environmental remediation.
 Jones is an example of why one could argue that the algae growth curve is going nowhere but up. Although she teaches at a community college in the chemistry and biology departments, Jones felt that some of her ideas on algae were worth pursuing, so she started her algae venture. For the past two years, Alganomics has been located at the Oak Island Waste Water facility where Jones has plans to turn the area into a renewable energy park. The facility already reuses the recycled water from the plant to water several baseball and football fields nearby, but Jones is looking to add her originally designed algae photobioreactors to the site in some way. She is still in the research and development stage but her ongoing work with strain selection and culture growth can prove important to the overall growth of the industry.
 Jones, with the help of her husband&rsquo;s engineering skills, has designed a trailer-mounted technology that she plans to employ at a local lake. Using her equipment, the state plans to remove unwanted algae from the water. &ldquo;They could care less what we do with the algae,&rdquo; she says. &ldquo;They just need to get the algae out of the lake as well as the nutrients. They can kill the algae, but the nutrients will just go back into the lake and then the lake will just have another algae bloom.&rdquo;
 The technology is based on current processes already being used at wastewater facilities, she says, and all the algal strains Alganomics works with are wild and found in the area. &ldquo;We are looking at how different strains work together,&rdquo; she says, and so far she has found that when combining different strains into the same culture she can avoid major culture crashes.
 In addition to algal biomass-to-power research, environmental remediation work at a local lake and mass culture research, Jones is also looking to work at several of the hog farm lagoons in the state. &ldquo;We would be using the hog lagoon waste and all those nutrients we are trying to keep out of our natural water to cultivate the algae.&rdquo;
 While Jones and her small team may not be ready to go commercial with any of their technologies yet, there is no doubt the role companies such as Alganomics play in the sector. How can the industry not grow if every state has its own version of the Jones&rsquo; catering to local needs through their innovative approaches with algae? &ldquo;There isn&rsquo;t a specific business model that we are looking at,&rdquo; she says. &ldquo;We are trying to be a bit opportunistic and looking at what the needs are.&rdquo;

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Kim Jones knows algae, and how to make a statewide impact 	

Why Every State Needs an  Alganomical Approach

Changing domestic demand for fuel means the U.S. refining industry is exporting more gasoline in order to keep capacity in operation that would otherwise be idle. At the same time, domestic demand for diesel is increasing. Increased blending of biofuels under the RFS2 is also having an impact on U.S. fuel markets. Lynn Westfall, executive vice president of petroleum-consulting company Turner, Mason &amp; Company, unravels the current state of domestic refining industry for Biodiesel Magazine.
 &nbsp;The U.S. refining industry ran at well below capacity last year, Westfall says. While some might think that increasing gasoline exports are taking fuel out of the U.S. marketplace and therefore increasing prices, Westfall stresses this is not the case. &ldquo;We&rsquo;re not taking way from the U.S. market to export,&rdquo; he says. &ldquo;We have plenty of capacity to make up for it. As a matter of fact, we haven&rsquo;t even made up for the demand decline in the U.S. with exports. Demand since 2007 is down 3 percent, about 250,000 barrels a day, and we&rsquo;ve only increased exports by about 200,000 barrels per day. We&rsquo;ve got plenty of spare capacity and we haven&rsquo;t even used that spare capacity yet to make up for the demand shortfall since 2007 due to the recession.&rdquo;
 According to Westfall, the U.S. refining industry is expected to export an increasing quantity of gasoline as ethanol further reduces demand for the fuel. In fact, if ethanol fulfills a significant share of RFS2 requirements, Westfall says it could add nearly 2 million barrels of fuel per day to the U.S. gasoline market. That amount of fuel is roughly equivalent to the output of 24 petroleum refineries.
 However, the diesel markets will be an entirely different story. &ldquo;We&rsquo;re exporting about 15 percent of demand for diesel already,&rdquo; Westfall says. Although diesel-replacement fuels currently are expected to play a more minor role in the future of the RFS2 when compared to gasoline replacements, like ethanol, that could change. For example, biodiesel and renewable diesel fuels could continue to take on a greater share of the advanced fuel pool under the program. Even if this happens, Westfall said that the impact of biodiesel on the U.S. refining industry will continue to be less significant than the impact of the ethanol industry.
 &ldquo;Unlike gasoline, diesel fuel demand is growing,&rdquo; Westfall says. &ldquo;Over the course of the next 10 years, we would expect growth in diesel demand to take up the biodiesel, even if it gets up to 10 percent [of the diesel market]. That&rsquo;s only a 1 percent growth per year, while [the market for diesel] typically has been going up about 2 percent per year. Domestic demand will take up biodiesel plus production from refineries.&rdquo;
 There is another way biofuels could impact the U.S refining industry in a significant way. Several biorefining companies are working to develop renewable crude oils that could serve as feedstock for traditional petroleum refining facilities, resulting in a wide variety of biobased drop-in fuels and chemicals. &ldquo;Certainly that would be the best economic solution,&rdquo; Westfall says, noting that a refinery doesn&rsquo;t care where crude comes from.

Consultant notes gasoline exports will rise while biodiesel meets higher diesel demand

Biofuels' Impact on Gas, Diesel Exports

The Council of the European Union adopted regulations to extend the anti-dumping and countervailing duties that currently apply to imports of biodiesel originating in the U.S. on May 5. Those duties now also apply to U.S.-produced biodiesel that is cosigned from Canada. The anti-dumping&nbsp; and countervailing duties have also been extended to apply to imports of fuel containing 20 percent or less biodiesel by weight that originates from the U.S.
 Documentation sourced from the Europa website states that the European Commission received a request from the European Biodiesel Board last June to investigate the possible circumvention of anti-dumping measures that had been established. The request alleged that U.S. biodiesel blended fuel containing 20 percent or less biodiesel was being exported to Europe via Canada and Singapore. The request also alleged that a significant change in pattern in trade involving biodiesel exports from the U.S., Canada and Singapore had taken place since the duties had been established and the remedial effects of the existing anti-dumping measures were being undermined in terms of quality and price.
 The investigation concluded that U.S. biodiesel did flow through Canada to Europe, effectively circumventing the required duties. This was not found to be true in Singapore, and that portion of the investigation was terminated.
 The EBB has spoken out in support of the new measures. &ldquo;The anti-circumvention measures adopted by the council represent a decisive move to ensure that the remedial effect of the EU duties on U.S. biodiesel is fully maintained over time,&rdquo; said EBB Secretary General Raffaello Garofalo. &ldquo;Operators should be aware that any future attempt to circumvent the existing duties can be investigated and remedied in the same way, with retroactive financial implications for the companies involved.&rdquo;

EXPORT ISSUES: The European Commission has taken action against U.S. biodiesel that was imported to the EU via Canada. 

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U.S. biodiesel exported to Europe via Canada now covered by duties

EU anti-dumping, countervailing duties extended

Diesel prices show no signs of going down, but a new bipartisan bill introduced by Congressmen John Shimkus, R-Ill., Eliot Engel, D-N.Y., Roscoe Bartlett, R-Md., and Steve Israel, D-N.Y., aims to change that in three years by offering more fuels at the pump come 2014. Coined the Open Fuel Standard Act (HR 1687), the proposed legislation is focused on driving innovation, bringing a variety of fuels to the pump and encouraging investments in research to find cheaper fuels to diesel.
 Specifically, the OFS would require that 50 percent of new automobiles in 2014, 80 percent in 2016 and 95 percent in 2017, would be warranted to operate on nonpetroleum-based fuels, in addition to or instead of petroleum-based fuels. Compliance possibilities include an array of existing alternative fuel vehicles&mdash;such as flex fuel, natural gas, hydrogen, biodiesel, plug-in electric drive and fuel cell&mdash;and a catch-all for new technologies. The CEOs of the Big Three automobile manufacturers have repeatedly gone on record stating their willingness to commit to making 50 percent of new cars flex fuel vehicles or warranted to operate on biodiesel blends above B5 by 2012.
 For retail owners like California-based Propel Fuels, the proposed legislation falls in line with the company&rsquo;s mission of providing more alternative fuel choices at its pumps in the state, according to CEO Matt Horton.
 &ldquo;We&rsquo;d love to see more vehicle manufacturers come out with stronger support for blends of at least B20,&rdquo; Horton tells Biodiesel Magazine. &ldquo;We&rsquo;re hopeful legislation like this, especially for diesels, will raise awareness of the issues around education of the public and OEM support for biodiesel.&rdquo;
 While the proposed legislation supports the diversification of fuels that retailers can supply, it fails to mention at what cost, if any, would be going to the retailer to build out the infrastructure necessary to install the equipment required to make those fuels available at the pump.
 &ldquo;We&rsquo;re advocating for an extension and an expansion of the existing infrastructure tax credit to make it easier for retailers to install this very expensive equipment,&rdquo; Horton says. &ldquo;Addressing the vehicles is certainly an issue, but it doesn&rsquo;t matter if we got a lot more vehicles on the road if we still don&rsquo;t have the infrastructure to deliver the fuel.&rdquo;

PROPELLING BIOFUELS: Matt Horton, Propel CEO, says heâ€™d love to see more OEMs support B20 in their auto warranty. 

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Open Fuel Standard Act aims to diversify fuel availability at the pump

July 2011

Business Briefs

Business Briefs

People, Partnerships & Deals

Business Briefs

Columns

Anaerobic Digestion ABC's

California Cap-and-Trade Wars

From Budgets to Biomass Gasification and Combustion

MACT Rules Threaten to Derail Biomass Industry

The Time for Commercialization is Now

Commercialization of Algae Projects: Hurdles Remain

Not Your Father's Algae

Overview of NAABB's Algal Biofuels Consortium

New Era

Clean Burning

Understanding Indemnities

Creating New Opportunities Off-road

Featured

Full Steam Ahead

Cleaner and Leaner

Inspiring Investment

Biopowering India

Breaking Through the Bottleneck

Making History

The Strength of the Strain

Making It Work in the Midwest

Biodiesel Sets Sail

Steaming Ahead to a Better Fuel

Don't Forget the Event

Contributions

How Manomet Got It Backwards: Challenging the “Debt-Then-Dividend” Axiom

Algae Project Scale and Risk

CO2 and Algae Projects

Regulatory Impact on Terminal Requirements

July 2011.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Business Briefs

Business Briefs

People, Partnerships & Deals

Business Briefs

Columns

Anaerobic Digestion ABC's

California Cap-and-Trade Wars

From Budgets to Biomass Gasification and Combustion

MACT Rules Threaten to Derail Biomass Industry

The Time for Commercialization is Now

Commercialization of Algae Projects: Hurdles Remain

Not Your Father's Algae

Overview of NAABB's Algal Biofuels Consortium

New Era

Clean Burning

Understanding Indemnities

Creating New Opportunities Off-road

Featured

Full Steam Ahead

Cleaner and Leaner

Inspiring Investment

Biopowering India

Breaking Through the Bottleneck

Making History

The Strength of the Strain

Making It Work in the Midwest

Biodiesel Sets Sail

Steaming Ahead to a Better Fuel

Don't Forget the Event

Contributions

How Manomet Got It Backwards: Challenging the “Debt-Then-Dividend” Axiom

Algae Project Scale and Risk

CO2 and Algae Projects

Regulatory Impact on Terminal Requirements

July 2011