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Big oil sees promise in pond scum

April 20, 2009
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Big oil companies are betting that algae—that''s right, pond scum—is a viable source of renewable energy, and they''re joining academics, start-ups and the U.S. government in committing resources to studying its potential, according to www.CNBC.com. Unlike first generation biofuels, algae have the potential to produce thousands of gallons of oil per acre and do not compete with agriculture for cropland. And because algae are photosynthetic organisms, they feed on carbon dioxide, thus removing some carbon dioxide from the air. Put together, it''s an attractive combination. Here''s a snapshot at where the major companies stand. In October 2007, Chevron announced a collaborative research and development agreement with the U.S. Department of Energy''s National Renewable Laboratory to study and advance technology to produce liquid transportation fuels using algae. Chevron is also a direct investor in Solazyme, a well-funded start-up that uses algae to create biodiesel. In January 2008, Solazyme and Chevron announced a biodiesel feedstock development and testing agreement. Shell announced a joint venture with biofuel company HR BioPetroleum in 2007 called Cellana. Cellana investigates different strains of algae, cultivates them in ponds and seeks to process the algae into oil that can be used as a raw material for fuel. In July 2008, ConocoPhillips signed a $5 million, multi-year research agreement with the Colorado Center for Biorefining and Biofuels (C2B2), a joint venture of the University of Colorado at Boulder, Colorado State, Colorado School of Mines and NREL, to develop new ways to convert biomass into low-carbon transportation fuels. The first project involves converting algae into renewable fuel. In February 2007, BP joined forces with University of California, Berkeley, the Lawrence Berkeley National Laboratory (LBNL) and the University of Illinois to research and develop technology to produce biofuels, including those made from algae. The collaboration formed the Energy Biosciences Institute (EBI), and BP will support the Institute with a ten-year, $500-million grant. In a speech at Stanford University in February, ExxonMobil CEO Rex Tillerson said his company was bypassing first-generation biofuels—such as corn-based ethanol —and researching advanced biofuels. For algae biofuel to become commercialized, multiple partners will have to be involved, says those familiar with biofuel production, with major energy companies leading the effort. Despite the promise of algal oil, experts agree that it is still a way off from hitting the market; estimates vary from five to 20 years.

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