13. BIOFUELS: Dow, Algenol team to make ethanol from CO2 (Greenwire, 06/29/2009)

Katie Howell, E&E reporter

Florida-based startup Algenol Biofuels today announced the formation of a partnership with Dow Chemical for building a demonstration project that would make ethanol from carbon dioxide and algae.

The demonstration would inject 2 tons of carbon dioxide into Algenol's photobioreactors each year, where algae will use CO2, sunlight and water to produce up to 100,000 gallons of ethanol a year.

The companies have applied for stimulus funding through the Energy Department, but they won't know whether they will receive a grant until this fall, Algenol CEO Paul Woods said. Regardless, he said, the pilot project will be built.

Current plans envision using 24 acres of Dow's Freeport, Texas, site to construct thousands of Algenol's photobioreactors, which are essentially long troughs filled with CO2-saturated water and algae and covered in thin plastic.

"Photobioreactors serve a dual purpose," Woods said. "Not only are they a perfect little climate, they're also a collection device for ethanol -- sealed, closed, our algae are nice and safe inside, and the ethanol doesn't evaporate into the atmosphere."

Dow likely will provide CO2 from its industrial sources, and it will offer its plastics expertise, Woods said.

"Nobody knows more about [plastics] than Dow," Woods said. "They will be bringing technology that they worked on for photovoltaics ... and those are really good things for plastic photobioreactors."

Other partners would include DOE's National Renewable Energy Laboratory, Georgia Institute of Technology and California-based company Membrane Technology and Research.

Woods said his company is looking to produce ethanol for $1 a gallon.

"When corn ethanol facilities were being built for $2 to $2.50, the companies didn't own any corn," he said. "But we have no hedging or price risk. We may pay $4 to build to capacity, but that will be the equivalent of owning the cornfields."

He added, "We own all the algae, so there's no commodity risk, no feedstock risk. The only thing we have to put in is carbon dioxide, and there certainly seem to be several companies interested in capturing it and putting it away."

Algenol has also partnered with Mexico's BioFields to build a facility that could produce 1 billion gallons of fuel a year (ClimateWire, June 6, 2008).

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