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Latest on Algae

October 22, 2013

Periodically a report surfaces, extolling the virtues of algae as a substitute for oil and gasoline.

The latest is about Sapphire Energy, a company that is experimenting with algae. It has an algae farm in New Mexico where it claims to be developing oil from algae.

The facts are few and hard to come by from published information, though a recent study made the headlines.

Here is what the Sapphire website says:

  • The process can produce 1,000,000 gallons of a drop-in oil substitute per year, on 300 acres.
  • The product will emit 60 to 70% less CO2 than petroleum fuels.
  • Large quantities of non-potable saltwater are used in the process.

There is no mention of cost by Sapphire, though a related article says the cost is higher than $100 per barrel and wonders whether it can be reduced to the cost of a barrel of oil.

The company is privately held with Bill Gates and the Rockefeller family as investors. The company repaid a $54 million loan from the government this year.

Solar Radiation Map for US. From NREL

Solar Radiation Map for US. From NREL


While there is no mention on the website of requirements for sunlight, the NREL map may provide some guidance as to possible locations for algae farms. There is also no mention of any limitations on temperatures.

Reading further, it appears as though the ground conditions need to be in areas where there is sunlight, and where the ground isn’t flat, but not too steep, so that gravity can be used for the required flow of water.

This, including the need for large quantities of water, puts limits on where the process can be used.

The web site also says that a 5,000-barrel-per-day plant will be built and the results known from that site in 2018.

Here’s what we can extrapolate from what we know, excluding any estimate of whether the algae oil, without subsidies, will ever be competitive.

  • The United States uses about 2,900,000,000 barrels of oil per year for gasoline.
  • It would require about 5,750 square miles on which to produce 292,000,000 barrels of oil per year, or 10% of the oil used each year for gasoline.
  • For comparison, Connecticut has an area of 4,845 sq. miles.

While the state of Connecticut can fit nicely into Arizona, New Mexico, Nevada or Texas, many times over, much of these areas may not meet the requirements for water and gentle topography required for algae farms.

Nevada, for example, has large unused land areas owned by the Interior Department, but doesn’t have water.

Areas of Texas have brackish water available, but the land is owned by people, and they may not want to sell, or the land may be expensive and increase the cost of the oil produced from algae. For example, the Permian Basin, an area rich in oil deposits, covers much of Texas.

Producing all of the gasoline used by the United States would require an area about the size of New England.

On the surface, based on this limited information, it would appear that Sapphire Energy may be able to produce some oil, and with subsidies, be profitable.

Whether it can ever replace large quantities of competitively priced gasoline remains to be seen.

The issue with algae isn’t whether it will work, because it will. The issue is whether algae derived fuels can be produced in sufficient quantity to make a difference, and whether it can be produced at a price that’s competitive with gasoline, diesel fuel or natural gas.

Currently, the answer is no.

Maybe we will know more about Sapphire Energy 5 years from now.


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5 Comments leave one →
  1. October 22, 2013 10:11 am

    Isn’t it time we give Sapphire a government grant, billions of dollars to pocket, rather than waste.

    • October 22, 2013 10:26 am

      Thanks for your comment. It’s very appropriate, given recent government grants.
      Don’t know whether they already have one. They have big money backers so may not need government money.

  2. October 28, 2013 3:09 am

    If they actually achieve 1,000,000 gallons on 300 acres (I’ll believe it when they start shipping product, maybe), on New Mexico land it would be incredibly, almost unbelievably profitable.

    That’s 3,000 gallons of diesel per acre grown on land that currently sells, at best, for about $200 per acre. Maybe $10,000 per year off of $200 land is very attractive, LOL.

    By your logic, it would be impossible to supply the food requirements of the US because the land that would have to be farmed would be something in excess of the size of the state of Connecticut.

    • October 28, 2013 10:05 am

      At $3.50 per gallon, the revenue would be approximately $10,500 per year per acre.
      Presumably the cost of land is only a small part of the investment. There’s also operating costs etc. Since they make no mention of cost it’s impossible to estimate whether they would be profitable. The only indication is a comment that the cost is greater than the current cost of a barrel of oil.
      If you obtain information on Sapphire’s cost, please let me know.
      The reference to land area is to put the output in context.
      There are 900,000,000 acres of farmland in the US, or approximately 1,400,000 square miles. The area mentioned in my article to produce 10% of our annual oil requirements is 5,750 sq. miles. I don’t see where my logic would lead to any conclusions about growing enough food to feed our country.
      There is a legitimate question of how much area is required to produce enough algae to have any effect on our use of oil.


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