Arizona could become a leader in the algae biofuel industry, if companies can mass produce the tiny plant for an affordable petroleum substitute, researchers said Tuesday.
And Arizona algae-technology companies like Phyco Biosciences in Chandler and Heliae Development in Phoenix hope they will soon have that breakthrough.
“We really do want algae to succeed, but there are challenges,” said Mark Bunger of Lux Research, a speaker Tuesday at the Fourth Annual Algae Biomass Summit.
“It’s still too expensive and there’s too little produced,” he said. “Frankly, until you have thousands of square miles of algae, it’s a nice science project, but it’s not going to replace petroleum.”
The Algal Biomass Organization chose Arizona for this year’s summit because the state, with a biofuels initiative at Arizona State University, is a “hotbed for research on algae,” said organization spokesman Mark Prentice.
More than 600 people from 27 countries – researchers, developers and producers – attended the three-day conference that started Tuesday.
“This is just the beginning for algae in Arizona,” Prentice said. “There are a number of bioscience companies here and you have the premium intellectual capital in this state.”
Scientists have already proven they can turn algae into a fuel that can be used in lieu of petroleum. The challenge, once they have found a type of algae that yields a high percentage of oil, is producing thousands of acres of it.
Algae company executives like Phyco CEO Ben Cloud see hope in state support, including the $2 million in federal stimulus money that Gov. Jan Brewer said Tuesday would go toward a research center for algae fuel. The center will be called the Arizona Center for Algae Technologies and Innovations.
Cloud also touted Arizona’s relentless sunshine and warm climate as a long-term, free energy source for growing algae cells.
“Arizona is one of the most ideal places in the world to produce [algae] biomass,” Cloud said. “We predict in about 10 years, we’ll see $1 billion in sales. It takes a period of time, but I’m very confident.”
Cloud said Phyco, which launched a pilot facility in Casa Grande in 2006, expects to turn a profit for the first time this year as it moves toward commercial production. The company was funded through $3.5 million from investors and has two operations in China.
The company expects to start with products like algae supplements, which Cloud said should yield the greatest initial profit, and animal feed, which he expects will be in highest demand.
But the product that companies like Phyco are banking on is a petroleum substitute, a product that is currently not profitable, he said.
“This is an emerging market,” Cloud said. “Our challenge is to create the products.”
Heliae, which is also producing algae food and fertilizer, is also working toward a profitable aviation fuel product, according to company literature. It recently opened a research and development facility in Gilbert.
Heliae co-founder Frank Mars was scheduled to speak at the conference Wednesday on the company’s experience as a new player in the market.
Algae as fuel:
• An algae cell can have oil content of 50 to 60 percent, meaning one pound of dried algae could yield a half pound of oil.
• The oil extracted from algae is very similar to crude oil.
• Algae may be able to produce 100 times more oil per acre than soybeans, which are now the leading source of biodiesel fuel.