How can one not like GreenFuel Technologies? These people say they can convert emissions from power plants into biofuels using algae in proprietary photobioreactors, which has so far resulted in tons of positive press, awards and accolades. And why wouldn’t it? You take CO2-containing pollutants and turn them into valuable, clean-burning fuels, just when we are running out of oil? Could there BE a better idea than that?

Actually, I for one do have a better business idea. Why not just skip the algae altogether, take water and CO2, put them in some Magic-o-Matic reactor and Voila! get oil out of it?

There is just one slight problem with mine and GreenFuel’s ideas: they break the Law. Now, events from the past few years suggest that anytime the end result is something that looks like oil… well… breaking laws is sort of OK. The problem with this Law is that nobody has succeeded in breaking it, and boy, have people tried?! It has the pretentious name of First Law of Thermodynamics, and basically says that when you convert energy from one kind into another you cannot gain energy, you can only lose it.

In other words, if we picture different types of energy as rectangles, where the height is the amount of energy, then an energy conversion chain can only look like a telescope, where every rectangle is narrower than the previous one.

Now let’s look at what GreenFuel is trying to accomplish in each square meter of their reactors. First, they take solar energy and convert it into algal biomass via photosynthesis. Not all of the solar energy is suitable for photosynthesis, the part that can be used is called photosynthetically active radiation (PAR). You want to know how much PAR you get in your neck of the woods? Check this website, they have the best PAR maps out there.

The energy - in the form of biomass - that can be obtained via photosynthesis thus depends on the level of PAR and the efficiency of the conversion process Q. 

Ebiomass = PAR x Q

Photosynthetic organisms use eight photons to capture one molecule of CO2 into carbohydrate (CH2O)n Given that one mole of CH2O has a heating value of 468kJ and that the mean energy of a mole of PAR photons is 217.4kJ, then the maximum theoretical conversion efficiency of PAR energy into carbohydrates is:

468kJ/(8 x 217.4kJ) = 27% 

This is the ideal yield on PAR energy that is: (i) actually absorbed by the photosynthetic organism, (ii) in conditions where this organism operates with 100% photosynthetic efficiency (every photon that is absorbed is effectively used in photosynthetic reactions), and (iii) the organism does not waste any energy on any life-support functions, other than building biomass.

Ideally, you want your algae photobioreactor plant to be someplace sunny, and according to the maps, the sunniest place in America is in the Southwest. One little problem: algae require tons of water but in the southwest water is not that abundant and is already being used for more vital purposes, like the Bellagio fountains in Vegas, for example.

Let’s sidestep the water issue and look into a square meter of photoreactors installed in the Southwest that convert PAR into biomass. From the maps, the mean annual PAR is about 105J/s, which translates into 3.3GJ/yr (there are about 31.5 million seconds in a year). If this gets converted using the absolutely highest, super-duper, theoretical photosynthetic efficiency of 27% it will equal to 0.89GJ/yr of energy locked into biomass. 

So far so good! Now this biomass has to be converted into biodiesel, which has an energy content of 126,200BTU/gal or roughly 0.133GJ/gal. A look at the last page (Examples 2 through 5) of the patent application filed by GreenFuel shows you that they plan on getting something like 342,000 bbl of biodiesel per year from a plant built in the Southwest. By doing some simple math conversions (342,000bbl x 42gal/bbl x 0.133GJ/gal : 1.3M sq.m.) one gets to … tah-dah… 1.47GJ/yr from a square meter!

Now we’ve done it! The process gained energy out of nowhere, which is against the First Law. We can add this patent to the list of other similar claims, that have invariably failed to materialize.

So what is a more realistic outcome for the conversion of PAR into biodiesel? First of all, the maximum achievable efficiency is of course not 27%, but more like 10%. Why? Not all of the PAR gets into the reactor in the first place, there are all kinds of transmission, reflection, and shading losses. Then, not all of the light that gets in gets actually absorbed by algae. Photosynthetic organisms have no good use for the green light and don’t bother to absorb it but rather reflect it back (you wouldn’t guess that by their color, would you?). Finally, algae don’t pile up all of the converted energy in a pile of biomass; they use some for their own life’s needs (this comes especially handy at night-time).

Next we have the question of how to turn the biomass into biofuels. There are three ways to do it: 
  -pyrolysis: this is a process where you heat the biomass to anywhere from 300 to 800 oC to get liquid fuels, gas and char. If you ever run into somebody who’s into pyrolysis, chances are that you’ll be made to believe pyrolysis is a divine answer to everything that we’ll ever need. These people are true pyro(lys)maniacs. In reality, though there are no substantial commercial installations for pyrolysis and it is not clear how much net energy you gain after taking into account the heat that one needs to input in the process.
  -fermentation: this is how the most ubiquitous biofuel – ethanol - is being made from the sugars in corn or sugarcane. In a theoretical 100% conversion from glucose, two of the six CO2 molecules that were captured by photosynthesis are released, and 118kJ per mole are lost to support the lifestyle of the fermenting microbes. That’s not so bad, but there is a better option (next).
  -transesterification of lipids into biodiesel. Biodiesel is the highest-priced liquid fuel, it sells at wholesale for $2.50/gal, which translates into $18.80/GJ. The allure of biodiesel comes not only from these high selling prices, but also from its easy and efficient manufacturing by transesterification, which is becoming a well established method, with low capital costs and high efficiency.

What you need for transestrification is lipids (fats). Algae are thought capable of providing high lipid content, some species can accumulate 30-60% (mass) and in some cases higher lipid contents.

There’s a catch, though! These “fat” algae develop only in conditions of cellular stress, most notably lack of a nitrogen source needed for making proteins. Feeding algae with mostly sunshine and no nitrogen is the same as raising your kids only on sweets - they may grow fat but they are not healthy and don’t develop properly. Similarly, growing “fat” algae is not worth it as they don’t grow properly and their overall photosynthetic efficiency is poor.

A reasonable best-case estimate then, for a healthy and efficient algal culture is to put aside 50% of all captured energy into fats and the rest into other things needed for their well-being: proteins, carbohydrates, chlorophyll, etc. These can be used and sold, too, as by-products in a variety of schemes, however, they won’t be fetching the same juicy dollars per gigajoule as biodiesel does.

What we get as maximum achievable yield for our square meter in the Southwest is the following:

“OK,” one may say, “last time I checked sunshine was still free and the algae grow by themselves. You get what you can: 5%, 1%, half percent, whatever... who cares… you still make valuable biodiesel out of free stuff! You can’t beat that!”

To which someone - a little more perceptive - might reply, “The land is not free, you silly, how do you get enough land to grow enough algae to get enough lipids to turn it into enough biodiesel if one only gets so much from a square meter?”

In fact, both of these imaginary friends would be wrong. The biodiesel will be far from free, and the reason is not the cost of the land, as shocking as this may sound for anyone from the San Frascisco Bay Area. How so? We’ll let our favourite author on energy issues, Kenneth S. Deffeyes explain it:

“At typical efficiencies of 10%, a solar collector has to occupy five square miles to deliver 1,000 megawats. I can direct you to any of several Nevada basins where you can get the five square miles; your problem is the capital cost of paving five square miles with solar collectors” (from “Hubbert’s Peak”, 2001)

Building and operating the photobioreactors on significant acreage is quite expensive. How expensive? We don’t know, it is not on GreenFuel’s website and something tells us that it’s not going to be there anytime soon. Nevertheless, we can look at comparable examples of solar capture systems to get an idea.

Something that many would simply call a big field of mirrors, and in fact, it is exactly that:

These are all installations that convert sunlight into something useful. The algal photoreactors are intended to convert it into biodiesel, while the greenhouse turns it into flowers and vegetables: both systems use photosynthesis for the purpose. As for the mirrors, they are used to reflect the sunlight into a central receiver which gets heated and the heat is then turned into electricity – technology known as concentrated solar power (CSP).

Now let’s look with higher resolution at the individual elements.

A report on the greenhouse industry for the state of New York in the year 2000, puts the average revenue per square meter at $161.77/sq.m./yr, with a gross margin of 24%, for gross profits of $38.82/sq.m./yr. That’s pretty typical for the industry. $161 looks like a very decent number, are greenhouses really so proficient at capturing Sun’s energy? No! The solar yield in a greenhouse is probably on the order of 0.5W/sq.m., (0.015GJ/sq.m./yr), or up to twenty times less than what we estimated for the best-case GreenFuel reactors. The key here is what this energy is being converted into. Turns out that a gigajoule of sunlight - captured into winter tomatoes or poinsettias around Christmas-time - has a very high value, which covers up the expenses for building and operating a greenhouse. 

What about the CSP example? It produces electric energy, not vegetables, therefore should be a more relevant example, right? CSP power plants are not competitive at today’s prices of electricity, so there is not much hard data for analysis. However, if we look at this report, done by a respected consultancy, we will find some projections.

For the near term, a CSP power plant will break even if it could sell electricity at $0.14/kWhr ($38.89/GJ). These near-term plants are expected to convert sunlight into 46W/sq.m., or 1.46GJ/sq.m./yr of electricity. At $38.89/GJ, the dollar yield will be $56.77/sq.m./yr, which should be enough to cover the expenses to build and operate the plant.

For the medium term, CSP plants are expected to become both slightly cheaper to build and slightly more efficient in capturing sunlight. The corresponding projections are:
breakeven electricity costs of $0.08/kWh ($22.22/GJ);
solar-to-electric capture of 55W/sq.m. (1.73GJ/sq.m./yr),
resulting in breakeven cash yield of $38.15/sq.m./yr.
Remarkably similar to the greenhouse profits of $38.82/sq.m./yr!

Now let’s look at GreenFuel’s biodiesel. We saw above that the maximum achievable yield of biolipids is ~0.16GJ/sq.m./yr. If we assume that these get converted with 100% efficiency (a truly heroic assumption) into biodiesel , which currently sells at $18.80/GJ wholesale, then we get a paltry three dollars per square meter per year ($3/sq.m./yr)
What biodiesel price would be required to achieve the same $38 /sq.m./yr cash yield as from a greenhouse, or from a projected medium-term CSP plant?

Here’s the calculation: $38/0.16GJ = $237.5/GJ,

which incidentally also equals to $31.60 per gallon of biodiesel or $1,327 per barrel. (The study uses more optimistic assumptions and arrives at ~$20/gal and ~$850/bbl).


Twenty to thirty bucks per gallon?

Thousand bucks per barrel?

Well, as shocking as these prices are, they would still be lower than what you pay for soft drinks at major league ballparks, or for that most expensive fluid on the planet – ink for inkjet printers. If we are running out of oil and if the global warming is gonna get us, maybe it is worth paying up for a renewable fuel like biodiesel from algae… sigh?

Relax, folks! There are better options for both post-oil fuels and for CO2 mitigation. The study mentions some of them, and there are others that would certainly be economic at prices much lower than that.

How did we get there? How can a process and a company based on such feeble premises get funding, awards, and so much prominence in the media? Let’s again turn for explanation to Dr. Deffeyes:

“There will be numerous voices claiming to have the new, new thing to solve the energy problem. They are not necessarily con artists. Some of them convince themselves first, then they try to con the rest of us. They are their own first victims.”

In a free market world there is no Central Committee that says what makes sense and should be tried and what doesn’t and should be banned. If somebody promises to break the laws of physics and if somebody else is a GreenFool enough to invest their money there, so be it! No harm to the public, right?

Except that today many people don’t invest their own money. The contemporary world functions through a sophisticated web of financial intermediaries. When you put part of your salary into your company’s 410(k) or you make a donation to the endowment fund of your alumni college, the money flows through a chain of financial managers into mutual funds, hedge funds, venture capital funds, each with their own money managers.

These financial agents are, or course, motivated to make profits, however they are also getting paid a fixed percentage of the assets they manage. So, in other words, the upside is there for them, but there is no real downside: whether the investment fails or not, these people still get paid.

I happen to know the person responsible for the largest piece of money invested in GreenFuel - Jennifer Fonstad, who oversees the $6mln invested by Draper Fischer Jurvetson. Jennifer is a businesswoman with impeccable credentials, yet with a marked tendency to disregard the scientific reality.

Any ordinary person would be extra careful not to put their life’s savings into ventures that promise to break the laws of physics. If financial managers with Jennifer Fonstad’s high intelligence and Harvard degrees were as vigilant and careful when investing other people’s money, the world would be a much better place and no energy or environmental catastrophes would be a match to humankind.