Fuels of the Future
By focusing on corn-based ethanol and ignoring alternatives such as algae, Congress may make a mistake as big as one the Romans made two millennia ago.
As oil prices escalate and supplies tighten, and as new technologies vie with old ones (and with special-interest groups), the debate over the next generation of energy sources reminds me of the birth of an earlier energy source: steam.
Most people think the steam engine-that paragon of the Industrial Revolution-was invented in the 18th century, maybe even later. That would be wrong.
The first steam engine was actually invented in ancient Rome in about A.D. 60. The inventor was a Greek mathematician living in Alexandria, Egypt, named Hero. He also invented a windmill and a water-pressure device that could open and close doors.
Hero's steam engine, which he called an aeolpile ("ball of Aeolus," Greek god of the wind), was made from a hollow metal sphere with attached counter-opposed spigots. The sphere was mounted on a bearing that allowed it to rotate. When an external flame heated a boiler feeding the sphere, steam escaped from the spigots, causing the ball to spin.
No one knows if Hero suggested any practical use for his simple engine, such as mounting it on a ship. Yet one wonders how the Roman authorities of his day would have responded to the contraption, which would have challenged what was then the main source of locomotion for ships, besides wind: slaves and oars.
Nearly 17 centuries later, in 1710, an Englishman named Thomas Newcomen built a working steam engine. This time, the invention stuck and the British embraced it, creating the modern industrial world.
The question today, when it comes to alternative fuel technologies is: Will we be like the Romans, or the British?
This was essentially the question asked a few days ago in a testimony to the U.S. Senate's Committee on Energy and Natural Resources by Jason Pyle, C.E.O. of Sapphire Energy, a leader among "next-generation" bio-fuels companies ("first generation" bio-fuels being ethanol and biodeisel made mostly from corn).
At its headquarters in San Diego, Sapphire Energy is developing fuels from algae, a highly versatile plant that produces oily lipids that can be transformed and refined into high-octane gasoline and even jet-aircraft fuel using existing refining facilities.
Sapphire has developed a still-undisclosed technology it says can make an oil substitute for $60 a barrel, less than half the price of light, sweet crude right now on futures markets. Pyle says that the raw ingredients for his bio-fuel come from photosynthetic microorganisms (algae), sunlight and carbon dioxide.
"They are carbon neutral and renewable," Pyle said of his fuel, "and don't require any food crop or agricultural land."
Granted, there are many hurdles-some of them quite high-that Sapphire has to clear to make this technology viable. Not least of them is how to scale up from a few greenhouses to the millions of acres of algae ponds that would be required to make even a modest dent on the world's consumption of fossil fuel.
To grow enough algae to supply the world's energy needs would mean covering a space one-quarter the size of the Egyptian desert, according to a Kinsey & Company report cited by Pyle. That's roughly 250,000 square miles, which is almost the size of Texas-an extraordinary undertaking.
Still, there are ample reasons to investigate algae's potential. Unlike corn-based ethanol, which takes almost as much energy to make as it produces and does little to curb CO2 emissions, algae can be produced more efficiently and absorbs about as much carbon dioxide as it emits.
Corn's output is about 6 million tons per acre per year, says Pyle. Algae produces upwards of 30 million tons per acre per year. "That's the buzz about algae," he said.
Making bio-fuel from algae also is unlikely to affect food supplies and prices as much as using corn for ethanol has been blamed for doing.
"It's hard not to get excited about algae's potential," said Paul Dickerson, chief operating officer of the Department of Energy's Office of Energy Efficiency and Renewable Energy. "Algae can flourish in non-arable land or in dirty water, and when it does flourish, its potential oil yield per acre is unmatched by any other terrestrial feedstock."
The problem, in Pyle's view, is that Congress, prodded by powerful agricultural lobbyists, is providing huge subsidies to corn growers to produce ethanol.
"By continuing to subsidize mostly the existing technologies instead of emerging alternatives," said Pyle, "the government runs the risk of discouraging a real future of renewable energy."
Pyle's proposal: Get Congress to back away from favoring any technology-whether ethanol, biodiesel, or fuels from algae-and stop mandating the use of one alternative fuel over others. "A growing competitive market should separate winners from losers," he said.
Sapphire is funded by venture firms ARCH Ventures and Venrock, and by Britain's Wellcome Trust. It's also working with the Energy Department, the University of California at San Diego, and the Scripps Research Institute.
The U.S. desperately needs an energy policy that encourages both conservation and alternatives to fossil fuels-everything from solar and hydrogen power to synthetic organisms that might one day be designed to make fuel.
But algae may be one of the earlier contenders for a technological fix for our energy woes because it uses the existing infrastructure of refineries, pipes, gasoline pumps, and internal-combustion engines.
Algae does not solve the problem of pollution from petroleum-based products, but it does have a cleaner over-all carbon footprint than oil from the ground, Pyle said.
Sapphire expects to be producing 10,000 barrels of algae oil a day in five years, which is about what an offshore oil platform produces, and 200,000 barrels a day by 2022. (By comparison, Chevron produces about 2 million barrels a day in its worldwide operations, Pyle said.)
Rome survived another 300 years after missing the significance of Heron's invention, but eventually the empire unraveled as its economy grew stagnant and its technological achievements stalled. This made it more vulnerable to turmoil within and attack from outside.
We won't have 300 years to coast on our current sources of energy and technologies. This is why we need to be nimble and adaptive, like the British in 1710, and not like the Romans in AD 60.Visit Portfolio.com for the latest business news and opinion, executive profiles and careers. Portfolio.com© 2007 Condé Nast Inc. All rights reserved.
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