Algae to Fuel – Orange Juice is Expensive!

Algae to fuel.  The green muck that scares kids thrives in non-potable water, derives its primary source of energy from solar radiation, and consumes what we don’t want in our air, CO2.  It sounds like a great idea.  It just seems too good to be true.  I do not question the science behind the concept, algae can be made into fuel, but what I do question is whether or not the plan is financially viable.

To get fuel from algae we basically have to mash it up, puncture it, or somehow break the cell wall to get the oil out.  We have to juice it.  The process of converting algae to fuel may be analogous, in principle, to creating orange juice.

Orange juice is made in a series of steps: Harvesting, Cleaning, Extraction, Concentration, Reconstitution, Pasteurization, and Packaging.  Some of the steps to turn algae into fuel may be different but I wouldn’t be surprised if it shared many of the same.  According to a recently placed phone call to a local grocer current orange juice prices are as follows:

128 oz Tropicana – $5.95                equivalent per gallon price – $5.95

89 oz Simply Orange – $4.98         equivalent per gallon price – $7.16

128 oz Hill Country – $2.50           equivalent per gallon price – $2.50

 The lower prices show that algae oil might be competitive with gasoline costs on the current market.  But hold on, the lower prices shown for orange juice are the cheapest around.  It is probably only analogous to compare to the 100% orange juice for the exact same reason that you don’t want someone diluting the gas you put in your car.  So now were talking >$6 per gallon of algae oil.  Conventional crude oil is approximately $1.71/gal for a $72 blue barrel.  Furthermore, oil is not gasoline until it is refined.  With current gasoline at approx. $2.50/gal, there is a 46% increase ($2.50/$1.71) in the cost of oil per gallon to refine and ship the product to the consumer as gasoline.  Consequently, the consumer will have to pay at minimum $8.76 ($6*1.46) for a gallon of gasoline derived from algae.

This isn’t the end of the issue though.  One estimate puts the heating value of algal oil at approximately 115,000 Btu/gal.  Typical North Sea crude oil has a heating value on average of around 125,000 Btu/gal.  Thus, one would obtain around 50,000 Btu per dollar of expenditure (125000/$2.50) on conventional gasoline while only around 13,000 Btu per dollar (115000/$8.76) for algae derived gasoline.  Even if the above analogy of juicing oranges overstates the cost of algal oil by a factor of 2-3, the costs of deriving energy from algae will most likely be so prohibitively high that its production will depend heavily on the public’s generosity to subsidize it. 

Since we may run out of readily accessible oil in the next 100 years or so one could argue that algae could find a place on the market.  I just don’t see it happening with the general consumer in the near future.  The Department of Defense, however, may be willing to throw the money at it to ensure our fighter jets stay airborne.  I feel sorry for my kids who’ll be looking at that energy bill as it comes down the pipeline.

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2 Comments

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2 responses to “Algae to Fuel – Orange Juice is Expensive!

  1. stevenfernandez

    This is a very interesting comparison between the prices for algea fuels and orange juice. It is important to step back once in a while and analyze the prices of all commodities to see where you are really spending your money.

    In the 90’s, a gallon of gasoline was priced around $1 [1]. Gasoline was cheaper than water! Now, in recent years, the price of gasoline has reached record highs. Hydrocarbons, especially those oil-derivatives used for transportation (like gasoline) are too valuable to be priced so low, and while record highs may have been unfavorable, they were probably necessary in driving prices to a more stable level.

    Every summer, energy-future.com publishes a booklet called “How the Energy Industry Works: An Insiders’ Guide.” This book contains analysis, insights, and background on the energy industry, and the writers always include a graphic comparing the price of oil to other commodities. Here are some interesting 2009 prices (per barrel) in the US [2]:
    Oil $30-150
    Gasoline $111
    Coca Cola $160
    Milk $335
    Perrier Water $350

    Water in the US was STILL more expensive than gasoline! Though I do wonder about the pricing of Perrier Water, I don’t question the fact that we need water. In a similar manner, the public also NEEDS transportation, so as long as our cars NEED gasoline, consumers are going to have to pay their dues.

    Considering the extensive capital and operating costs associated in producing, transporting, and refining oil to end up with gasoline for drives, I’d say we’re getting away with a good deal. We probably have more room to spend, and unless changes are made in the transportation department, we will NEED to make up the pricing differences in algae fuels.

    sources:
    [1]
    http://www.eia.doe.gov/emeu/aer/txt/ptb0524.html
    [2]
    http://view.digipage.net/?userpath=00000001/00005935/00045692&page=2

  2. mvpulido

    This is an interesting entry and a creative analogy to diesel production from algae. However, as administrative policies strive to find ways to decrease oil dependency, it seems that the question is no longer if renewable sources will be implemented due to their financial implications but rather how quickly technology can adapt to meet the regulations already set forth.

    Under the Energy Independence and Security Act of 2007 (EISA), the Environmental Protection Agency (EPA) was made “responsible for revising and implementing regulations to ensure that transportation fuel sold in the United States contained a minimum volume of renewable fuel.”[3] The program that the EPA came up with was the Renewable Fuel Standard Program (RFSP), which requires that by the year 2022 a volume of renewable fuels of 36 billion gallons be blended into transportation fuels.

    The EISA is only one of many examples of administrative steps taken to advance towards a clean energy era. President Obama’s State of the Union Address is a recent example of this where he spoke of the importance of energy innovation in order to achieve economic growth in a competitive global environment. In early February, at “a meeting with a bipartisan group of Governors from around the country, the President announced actions to accelerate the development of biofuels and clean coal technologies, two critical components of his comprehensive plan for transitioning to a clean energy economy.” [4]

    When we think biofuels, the first option to come to mind is usually ethanol. At an estimated $1.20 per gallon to produce by 2012 (or $1.65 when using cellulosic feedstock)[2], ethanol definitely seems to be the better option at a price cheaper than gasoline and even more so than other biofuel production options, such as algae. However, it is because of regulations such as those included in the EPA proposal that sets a 15 billion gallon cap on ethanol production that we find ourselves turning towards less financially viable options such as algae in order to meet the requirements.

    Oil is and probably will continue to be the cheapest choice for many years, but it is no longer the only option we are allowed to consider. Algae, at a current estimated price of “$1.40-$4.40 per gallon and an oil yield potential of 1200 gallons/acre compared to the 18 gallons/acre of corn”[1] is one of our strongest alternatives.

    Sources:

    [1] Hu, Qiang et al. Microalgal triacylglycerols as feedstocks for biofuel production: perspectives and advances. The Plant Journal. 2008.
    [2]http://www.epa.gov/otaq/renewablefuels/420d06008.pdf
    [3]http://www.epa.gov/otaq/renewablefuels/index.htm
    [4]http://www.whitehouse.gov/blog/2010/02/03/moving-america-s-clean-energy-economy-forward-boost-biofuels-clean-coal
    [5] NREL-Potential for Biofuels from Algae Pres-2007.

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