Firstly, the company received a $25 million (A.R.R.A.) grant from the Dept. of Energy in 2009 to develop a pilot-scale biorefinery. The passage below is an explanation of Algenol’s technology (from a press release announcing the DOE award):

Algenol today possesses the most advanced third generation biofuel technology in the United States. It makes low cost ethanol directly from CO2 and seawater using hybrid algae in sealed, clear plastic photobioreactors through its unique, patented Direct to Ethanol ™  technology — all powered by the sun.

Algenol‘s research and development efforts have culminated in a process that produces over 6,000 gallons of ethanol per acre per year, compared to corn at 400. This process achieves an energy balance of more than 5 to 1 and a life cycle carbon footprint that is merely 20 percent of petroleum (an 80 percent reduction from petroleum).

Image from Algenol Website Presentation

Algenol’s founder and CEO, Paul Woods, said that in addition to the federal grant, Algenol needed an additional investment of $50 million to finish construction on the pilot-scale biorefinery. Woods said an undisclosed Asian energy company recently pledged $100 million, which he “gladly” accepted. He was having difficulties securing U.S. institutional investors. The Asian company could then license Algenol proprietary technology to build four large-scale facilities at a total cost of $3.4 billion.

Woods said [to GCBR] that Algenol can produce ethanol from algae for 85 cents per gallon.  Once a full-scale facility is built, it could pay for itself in a year.

The company has been in business five years with no revenue.  Woods and his partners (see below) have invested $70 million into Algenol to date. The company received $10 million in incentives from Lee County to build the biorefinery in Bonita Springs. Woods said that he is not worried that Algenol may not make its first sale until 2013 because it takes years and huge financial resources to build refineries.

I trust Woods knows what he is talking about because he is Canadian energy entrepreneur who retired to Bonita Springs (at 49-years-old) after he built and sold two energy companies in Canada. The first was Alliance Gas Management in Toronto, which Woods took public in 1997 when annual revenues hit $100 million. The second was United Gas Management, a $75 million company he sold in 2000.

Partners —  Dow Chemical Co., The Linde Group, Valero Energy Corp.,  the Mexican business group BioFields. Algenol is also collaborating with several universities including Georgia Tech and Florida Gulf Coast University. 

I have to do further research into the nature of these (significant) R&D and financial partnerships, so for right now this is as far as I can go with Algenol Biofuels.

UPDATE:  Algenol announced on Oct.24th that it had broken ground on the construction of its pilot-scale integrated biorefinery.

NOTE:  The Engineer’s Procrastination Pit posts a technical overview and analysis of algal biofuel process:  Playing the algal game 

Biomass commodities include recovered wood and paper, food crop residues, plant and animal waste and any woody, herbaceous or agricultural byproduct, including substances like distillers dried grains – a byproduct of ethanol production.

Ethanol itself is an agricultural commodity for CSX with its own dedicated rail service called EthX – Express Ethanol Delivery. The EthX  rail system east of the Mississippi is massive, particularly weighted in the Midwest to Northeast. There is an EthX direct rail line from Chicago through Jacksonville, Orlando and ending at Port Everglades.

Image via Tree Hugger - A Discovery Company

Whether or not ethanol is part of the green energy sphere is a topic open to debate, especially as it applies to corn-based ethanol. I’ve always been a supporter of biodiesel and advanced algal or cellulosic-based biofuels. But, second generation biofuel technology is still a long way from economic viability, so rely on corn we must: 90 percent of petroleum products in the U.S. are blended with ethanol.

But I digress.

CSX, along with Houston-based Kinder-Morgan Energy Partners and Tampa Port Authority, announced on Sept. 19th a joint venture to develop the first ethanol train-to-pipeline distribution system in the country. TPA is building new rail track and support infrastructure to allow CSX to transport ethanol from Midwest producers to Kinder Morgan’s Tampa Terminal via CSX subsidiary TRANSFLO terminal services. KM is modifying existing pipeline to accommodate ethanol (denatured alcohol) for its blending terminals at TPA. The joint operation is expected to be completed by Sept. 2012.

As an aside, KM’s 104-mile central Florida ethanol pipeline between Tampa and Orlando was the first pipeline in the country to provide commercial ethanol deliveries via pipeline. It became fully operational in 2010.

Jacksonville Market

I was going to expand on the CSX Tampa project but was diverted to ethanol distribution in my own backyard. Chevron, BP and Hess have terminals on the St. Johns River. Shipping petroleum and ethanol product (sorry CSX) is cheaper by oil tanker. All have private piers with blending facilities on site.

Jacksonville-based Gate Petroleum owns 225 service stations and convenience stores in six Southeastern states. The company is a gasoline distributor. It purchases gasoline and ethanol to blend in a variety of ways, dependent on market. My buddy Robert “Buzz” Hoover, Gate V.P. of Petroleum Supply, tells me that Gate uses Kinder-Morgan’s blending facilities in Tampa for its stores in Central Florida.

The company struck an exclusive long-term arrangement with BP to use the Amoco  (which BP acquired when they merged in 1998) terminal facilities and blends E10 gasoline on adjacent property it owns on Hecksher Drive, for distribution to the Northeast Florida and Southeast Georgia markets. 

Gate Biofuels, Inc. had planned to develop and operate a 55 million-gallon petroleum and renewable fuels terminal in 2008, but was unable to a negotiate a 200-foot easement with the adjoining property (on Heckscher Drive).  The terminal would have supplied, blended and stored petroleum, ethanol and biodiesel for its gas stations and petroleum customers (Fuel Services division) throughout its operating region.

As the major oil companies became the dominant suppliers of blended gasoline, it wasn’t cost effective for Gate to continue with plans for a terminal elsewhere. The long-term arrangement with BP does give Gate a competitive edge in the market, so the story ends well.

Meanwhile, I haven’t forgotten about the advanced biofuels and biomass mentioned earlier in this post. …

JACKSONVILLE — CSX Corp. said about itself, “Environmental stewardship is a top priority throughout CSX’s operations and management.” Or rather it said so in a Sept. 20th press release  announcing the company had received the highest score for an industrial company in Carbon Disclosure Project’s (CDP) 2010 Standard & Poor 500 Report. CSX was among five industrial companies included in the Global Carbon Performance Leadership Index (CPLI).

CSX’s score is based on greenhouse gas emissions, emissions reduction targets, and risks and opportunities associated with climate change. The CPLI recognized 48 Global S&P 500 companies that have made a commitment to good corporate governance with respect to climate change disclosure practices.

This is a grand environmental accomplishment for CSX at the global macro level, which is perhaps more than is applicable for this article. But CSX is a Jacksonville-based company, so it is certainly worth noting. At the regional level, though, CSX’s BioEnergy division is in the business of carbon reduction.

Wood pellets product picture, Georgia Biomass

To over simplify, the division’s product is rail transport for woody (cellulose) biomass pellets used in lieu of coal for power generation. Beyond that is a CSX team committed to developing the complicated domestic and international supply chains for bio-energy markets. 

Incidentally, a CSX BioEnergy informational conference for its customers and potential customers wraps up today on Amelia Island (that’s not something I’m supposed to mention but did anyway.)

UPDATE — Oct. 4th:  Held in Amelia Island, Fla., the Bioenergy Summit focused on supply chain challenges, energy portfolio transformation, and regulatory updates. The summit included a presentation by Chuck Leavell, author of multiple publications on environmental issues and acclaimed musician. Other speakers included Gunnar Tinjar, Head of Biomass Upstream for the German Utility RWE Innogy; William A Johnson, owner of Biomass Consulting Services; Rick Boyd, Manager of Fuel Operations for Dominion Generation; Dr. Kenneth Mitchell, Special Assistant to the Air Programs Division Director for U.S. Environmental Protection Agency Region 4; and Niel Barnard, Managing Director of London based International Woodfuels Europe.    

The largest CSX partnering project to date is with Savannah-based Georgia BioMass facility in Waycross, Ga. According to Georgia BioMass, the plant is the largest wood pellet plant in the world. It began operations in May and CSX unit trains are expected to transport as much as 750,000 tons of wood products annually from the plant to the Port of Savannah for export.

Savannah-based Georgia Biomass, LLC  is a wholly-owned subsidiary of RWE Innogy, which is a wholly-owned renewable energies company of Ruhr, Germany-based RWE – one of Europe’s five leading electricity and gas companies.

“Okefenokee Area Development Authority (OADA) did an outstanding job working with CSX Regional Development, European customers, the State of Georgia, and Ware County officials to make this significant economic development happen,” said Clark Robertson, CSX assistant vice president-regional development. “It will bring needed jobs to Ware County, and help position Georgia as a leader in the renewable fuels business.”

Georgia Pine, image Georgia BioMass

“CSX was very pleased to be selected as the rail carrier for this new venture,” Robertson said. “Given the abundant forest assets in the region, we are hopeful that other firms may be encouraged to join in the production of wood products for renewable energy and take advantage of our excellent rail network. We offer considerable expertise in the transportation of renewable fuels, including bio-diesel and ethanol.”

I anticipate further updates from CSX BioEnergy because, yes, the region abounds in cellulosic assets. Meanwhile, bio-diesel and ethanol are considered agricultural commodities at CSX,  with departmental news of its own to follow…

Dwayne Vanlacker - 2008 photo: James Crichlow, JBJ

Several years ago (2008 to be exact), the city of Jacksonville’s Fleet management division converted its fueling stations to carry ethanol-blended gasoline in compliance with state (and federal) environmental regulations. The division had already been supplying biodiesel to JEA as part of its renewable energy portfolio. The city  blended 100 percent  biodiesel (B100) with diesel to make to make a B20, which is compatible for standard diesel vehicles.

In the same time period, the fuel depot was readying itself to become fully operational as a distiller of (used cooking oil) biodiesel. Why? Because it bought B100 on  the open market for $4 per gallon and could produce it at $1.50 per gallon (including overhead). The city is today fully operational. It picks up used cooking oil from places like Naval Station Mayport and EverBank  Stadium. The person doing all of this distilling and blending is Fleet Fuel and Environmental Technician Dwayne Vanlacker.

Vanlacker startled ticking off the steps of the  distillation process for me. I’ll simplify it for myself here by saying a byproduct of the  process is glycerin, which becomes a commodity for all biofuel manufacturers. Glycerin is also how we arrive at  JEA’s Buckman  Water Reclamation Facility, the largest of its kind in Northeast Florida.

St. Johns Riverkeeper - algal bloom

The Nitrogen factor

It’s fairly common (regional) knowledge that excess nitrogen (and phosphorous) in water runoff into the St. Johns River causes its algal blooms during the summer. (Read St. Johns Riverkeeper entry on excess nutrients for further information. Much of the problem is attributed to lawn fertilizer.)

JEA took over the city of Jacksonville’s water and sewer department in 1997 and is under strict mandate to control the level of nitrogen it discharges into the river.

Now, here is how the biodiesel glycerin-byproduct relates:  Fleet management sends it glycerin to JEA because of a process it developed to remove nitrogen from waste water using glycerin.  Actually, Casey Nettles, a JEA operations manager,  developed it and for that he won 2011 IQPC Process Excellence Award for Best Green Project (Runner up/Honorable Mention.)

The awards celebrate process excellence initiatives that have delivered outstanding results in a variety of categories.  This is an annual international event and for JEA to be able to compete with the sheer size of some of these companies is a true honor for me to have been able to represent JEA. — Nettles

The Nitrogen Project

Nettles is team leader for JEA’s process engineering group. He sent along a Powerpoint presentation to explain what they did and why.  When I see a slide entitled Understanding the Existing Process: Root Cause Investigation Matrix, I trust they understand the existing process and I advance to Slide 10:

PROJECT SOLUTION!!

PROJECT DETERMINES THAT FEEDING BIO-DIESEL WASTE BY-PRODUCT [glycerin] TO THE MICROBES REDUCES NITROGEN DISCHARGE INTO THE RIVER

JEA’s Buckman Water Reclamation Facility (image courtesy JEA)

Slide 13:  The technology and methods utilized to protect the environment and save millions for JEA at the Buckman St. wastewater treatment plant in Jacksonville Florida, are now being considered by numerous utilities within Florida and throughout the United States!!

UPDATE: Casey Nettles is also a Six Sigma Black Belt [Six Sigma is a process management strategy originally developed by Motorola USA in 1986.]

Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes.  It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization (“Black Belts”, “Green Belts”, etc.) who are experts in these methods.   Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets (cost reduction or profit increase).

………………..

To advance The Nitrogen Project, I will let it will take on a life of its own and tie into Florida’s race for green oil.

Florida’s potential as a industry leader in algal biofuel is huge. The Center for Marine Bioenergy Research was just established in March at Florida State University through a grant from the U.S. Dept. of Energy.   Mike Wetz heads up the center, which is under the umbrella of our friend Dave Cartes‘ Institute of  Energy Systems, Economics and Sustainabilty (IESES).

With our coastline, it only stands to REASON that Florida should be be a leader [in algae biofuel production] in the eastern U.S., Cartes said.

Of course FSU isn’t the only state university in Florida involved in bioenergy research (although news from  University of Florida hasn’t been fully explored).  All eleven state universities make up the Florida Energy Systems Consortium - collaborative  energy research among the universities. They met in May with industry leaders for a Florida overview of the “Algal Industry Survey” conducted in association with the Centre for Management Technology.

Algae culivation ~ PetroAlgae

The reports’ findings – less than perfect:

1. Secrecy amongst companies in the field that leads to a lack of information sharing between affiliated scientists
2. Lack of rigorous assessments of the entire algal biofuel value chain (i.e., from production to distribution
3. Lack of trained workforce.

FSU researchers are developing a state-of-the-art algal cultivation operation at a site on the North Florida coast, which includes an off-grid, zero emissions facility that utilizes recycled CO2 (from the processing of algal biomass) and nutrients (from local wastewater sources) to support algal growth.  Since this unique operation will be run by an academic institution, a major goal will be to work towards overcoming problems noted in the aforementioned state of the industry report.

[NOTE:  Not all details of next month's meeting are solidified - a team of industry and state university academia is being put together now - UPDATE later]

Although the state of the industry report may seem mediocre,  Florida does have a number of established algal biofuels companies. Melbourne, Fla.-based PetroAlgae, for example, is a publicly-traded biofuels industry leader. The company received the Sustainable Energy Technology award  at the international Green Power Conference held in Brussels, Belgium this past March.

PetroAlgae is an important player in the state,  said Wetz. I have good interactions with them.

BUT OF COURSE – California also has plenty of coastline AND top-notch research universities …

Asked about California’s progress in algal biofuels, CARTES REPLIED:

We have unique capabilities in FLORIDA. We don’t NEED to go to California to find our expertise.

GAME ON!!

- k. a.gardner