Volte Face – Exxon Goes Ga Ga for Algae Oil

Monday, July 20, 2009 | Posted by: Grant Thornton
Categories: Environment | Tags: innovation, technology, government, renewable energy, energy, science, car, eco, desalination, gas, bio fuel

When Big Oil claims its going green, seasoned market watchers sigh deeply and trade a few million barrels before lunch. More generous observers will consider Big Oil’s alternative energy ventures part R&D, part PR. But, what if the numbers really do stack up and the technology really can get beyond drilling holes in the ground?

This week, ExxonMobil played an alternative energy masterstroke. Announcing a $300 million spend on algae-to-fuel research, Exxon silenced many critics who believed it had no way out of oil drilling dependence. Exxon’s deal with J. Craig Venter’s Synthetic Genomics is its first major investment in bio-energy, and opening salvo in a war of the bugs.

Dr Venter is proposing the industrial-scale bio-manufacturing of single-celled algae, genetically engineered to turn out fuel-ready hydrocarbons. The science is proven, but the project colossal; one analyst estimates a manufacturing facility the size of Chicago is necessary to meet the oil needs of the United States.

According to the United Kingdom’s Department of Business, Innovation and Skills, during 2007, the total energy consumed in the UK was the equivalent to 164.6 million tonnes of oil (an increase of 11.74% compared to the equivalent of 147.3 million tonnes of oil used in 1990). This represented 65.5% of the total energy used; the other 34.5% was lost in converting or transmitting the energy, or was used by the energy industries themselves before it reached the consumers.

In short, the total energy used in the UK is approximately 1732.3 million barrels of oil. At today’s prices (c. $61 per barrel), that’s an energy market worth a cool $103 billion a year, but then we could double or triple that price by the end of the year.

The UK Government’s own Energy White Paper states that around 20–25 GW of new generation will be required by 2020 – that’s a lot more zero’s to be added to the dollar bill.

As North Sea oil and gas reserves expire in the coming generation, bio-fuel innovation is creating a new light brigade of advancing technologies. Britain is leading Europe, and in some sectors the world, in its adoption of early-stage bio-fuel technology. The key to integrating these new technologies successfully is their capacity to supply the National Grid directly.

Bio gas, for example, uses the UK’s existing waste streams to produce gas which can be pumped directly into existing household distribution channels. As algae oil is refined, and the bio-manufacturing process benefits from Moore’s Law, the Western world will find itself in a more economically stable environment, energy secure and putting to work an energy surplus.

With newly enhanced alternative energy supplies, the issue of water desalination and pumping evaporates – wars will no longer be fought over resources such as oil and water; instead, our creative species will struggle to contain expanding populations and ideological aggression. Energy is at the heart of every great industrial revolution, and as control of energy becomes less modular, the ensuing democratisation of energy use will present new challenges for how we organise our nation states. In the meantime, “there’s gold in them there bugs” – it’s time to back algae oil entrepreneurs.

Algae and Plastics
http://www.timesonline.co.uk/tol/news/world/ireland/article6689843.ece

Algae Oil
http://www.businessweek.com/bwdaily/dnflash/content/jul2009/db20090715_064110.htm

Oil Consumption:

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2174rank.html

Business Enterprise and Regulatory Reform, now Dept of Business, Innovation and Skills
http://stats.berr.gov.uk/energystats/dukes08.pdf

MUST WATCH:

National Grid’s Head of Sustainable Gas Group, Janine Freeman, discusses their approach to innovation, including the opportunities and hurdles surrounding their quest to meet sustainable energy targets. In particular, she offers insight into the potential for injecting Biogas – the innovative renewable energy source – into National Grid pipelines. Compiled of the UK’s various waste streams, Biogas has the potential to simultaneously cut methane and carbon emissions, boost renewable energy capacity and provide a domestic replacement to waning North Sea gas reserves.