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In Colorado Desert, Hope Blooms for Pond Scum as Fuel

October 30, 2009 at 12:00 AM EST
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In the latest in a series about innovation amid economic turmoil, Tom Bearden reports on efforts to convert algae into clean fuel.
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JIM LEHRER: Next tonight: turning lowly algae into fuel, another in a series of stories about how people are innovating to move the economy forward.

“NewsHour” correspondent Tom Bearden has our Science Unit report.

DAVE DISS, Solix Biofuels: This is what the final product looks after it’s spun down.

TOM BEARDEN: Dave Diss gets a little annoyed when people call his algae pond scum. He and the company he works for think it’s the next big thing in alternative fuels. Diss manages the Coyote Gulch Demonstration Project for the Solix Biofuels Company out in the Southern Colorado Desert.

It’s essentially a series of large water-filled metal tanks that hold 120-foot-long plastic bags full of water and algae, a process the company hopes can be massively scaled up to produce economically competitive biodiesel.

DAVE DISS: Algae is injected into the bags. This one here was just injected yesterday. And you see how it’s a lighter color…

TOM BEARDEN: Yes.

DAVE DISS: … than this darker one? And, as it grows — and it takes from five to 10 days for it to reach maturity to where it can be harvested — then we will extract it out of the bags and move it into the harvest facility, and spin out the water, and then you have a marketable lipid to extract the oil from the algae.

TOM BEARDEN: Solix is one of about 200 companies trying to find a way to make biofuels out of algae. The company began testing the production process three-and-a-half years ago at Colorado State University, using this small-scale tank to try out various ways to grow algae.

BRYAN WILLSON, Solix Biofuels: For this to go to scale, we have to be able to do this at much, much lower cost.

TOM BEARDEN: Solix co-founder and mechanical engineering professor Bryan Willson says the tests showed that a closed system using plastic bags was the way to go.

BRYAN WILLSON: So, by growing them in these closed panels, we can control their environment and just grow those very specific species.

It also gives us the ability to tailor the environment, because we — under normal growth conditions, algae don’t produce oils. To get significant oil content, we have to impose certain biological stress conditions to change their metabolism. And that’s much easier to do in a closed system.

An unlikely partner

TOM BEARDEN: Eventually, they ran up against the limits of the test tank, and went looking for capital to build a larger facility. Solix found a seemingly unlikely partner in the Southern Ute Indian Tribe, one of the country's wealthiest. About 1,400 tribal members live on the Southern Ute Reservation near Durango, which sits on top of an enormous natural gas field.

The reservation has what the Solix process needs: land, carbon dioxide, and water. One of the Ute Tribe's natural gas wells sits right next door to the Solix project. It's not an accident. Oil and gas deposits are often surrounded by underground water, which is brought to the surface when the fuels are extracted.

This brackish or saline water is called produced water, and environmental laws require special handling, so it doesn't contaminate the surface. Wells also produce carbon dioxide, a greenhouse gas thought to contribute to global climate change.

The Solix technology uses both of these waste products to accelerate the growth of the algae. The produced water and CO2 are piped to the Solix project. The water fills the tanks. The CO2 is injected into the bags to nourish the algae.

BRYAN WILLSON: In order to get high growth rate, we have to supply CO2 to the algae. And that happens in the very bottom of the panels. And what we have here is the air that is mixed with the CO2 is existing the panels through these tubes.

TOM BEARDEN: So, it bubbles up through the bottom?

BRYAN WILLSON: Bubbles up through the bottom.

TOM BEARDEN: The algae feeds on the CO2, preventing it from being released into the atmosphere.

Rebecca Kauffman is the president of Southern Ute Alternative Energy, which oversees the tribe's energy investments.

REBECCA KAUFFMAN, Southern Ute Alternative Energy: In looking at algae growth, when you see what the inputs are, its a great match with the gas industry, which is kind of nice.

If we can take output from one industry or one sister company and use it, and make money off it in another way, that's great. Why wouldn't we do it?

So, when we first heard about algae, we did a lot of research in it, looked at what NREL had done in the early years, which I think was about a five-year study or so that they had done with it, and to see where Solix has taken it was really exciting.

"A long-term investment"

TOM BEARDEN: Bruce Valdez is the executive director of the Southern Ute Growth Fund, the tribe's business arm, which has $2.5 billion in investments.

He says the fund is always looking for alternative technologies that don't take farmland out of food production -- like corn ethanol -- don't use up water that could also grow food, and also don't harm the environment.

BRUCE VALDEZ, Southern Ute Growth Fund: We believe in harmony with Mother Earth. We believe in -- in giving back. And we believe that we have to live in harmony with Mother Earth.

TOM BEARDEN: Both Solix and the tribe know that this technology has a long way to go before it can produce biofuel in sufficient quantities to be economically viable.

But, unlike most venture capitalists, Valdez says the Utes are willing to wait.

BRUCE VALDEZ: As Indian people, we're always looking long-term. That's one of the unique advantages we have as an Indian tribe, is, we can look long-term, where we're not so much looking quarter to quarter. We're looking for generations down the road. So, this is a long -- everything that we do is pretty much a long-term investment.

TOM BEARDEN: The demonstration project is set to run for two years. But Solix already has a few clients who are producing small quantities of fuel from algae.

Solix CEO Doug Henston says, success or failure hinges on how cheaply they can produce the biofuel.

Is your ultimate success essentially dependent on the price of traditional oil?

Doug Henston, Solix Biofuels: Well, I would say yes. And that's really true for any renewable energy. I mean, there's a price of oil at which renewable energies don't work.

But what we're trying to do is compete reasonably with petroleum in that, you know $70- to $80-, $90-a-barrel range, where we think things will eventually level out.

TOM BEARDEN: If they can compete, the professor and his Indian partners hope to build similar biofuel plants next door to other CO2 generators, like coal-fired power plants, and turn a lot more waste products into usable fuel.