Biofuel from algae startup on shaky ground

And to think that Reuters ran a glowing article on de Beers today without questioning the company at all.

Great reporting, Inside Greentech.

While it's maybe not quite a scam, I'd be surprised if this company is going to be producing billions of liters of anything, let alone biodiesel from algae.

For the most part the article is correct, but it seems to be somewhat biased and a bit garbled. Errors could have been avoided if Inside Greentech had presented a more even handed debate and checked it before publishing.

Garbled:
"biodiesel algae reactor". There is an "algae reactor", and a "biodiesel reactor" or a "biodiesel from algae oil reactor". The reason I harp on here is that there will be separate (physical) locations for each type of plant. One plant grows algae, then extracts the oil. Biodiesel plants (some many km away) will process the algae oil as raw feedstock and convert it into biodiesel. The pilot algae plant is however currently located at the biodiesel plant for testing.

Error:
Quoting the article "De Beers Fuel says it's contracted with a pinksheet-listed company in California, Green Star Products, to produce 90 more of the algae bioreactors". Green Star is building BIODIESEL reactors, not algae reactors. The article logic is jumbled at the end, claiming that Green Star is building algae reactors (and thus insinuating even more inexperience on Green Star's part.)

Bias:
It appears that the expertise of Green Star is under-rated. They (joint venture) built one of the only continuous-flow production plant in the USA. Clearly cutting edge. Granted, partner ABF probably has more experience, but Greenstar clearly have the manufacturing capability in what is a straightforwards and proven technology. Shame on Inside Greentech for evaluating only internet-based information as a means to grade Green Star on their manufacturing and technical capabilities.

Left out:
South Africa (weather, lattitude, temperature, transport network) is one of the very few perfect locations world-wide in which to scale up an (algae) pilot plant to production size.

South Africa's government favours biodiesel production, allowing generous rebates where core government consumption is concerned, which is one of the initial target markets.

DeBeers isn't stupid. Not terribly eloquent with media releases perhaps, but not dumb. Research and development plays a large part of what they do. Tinkering with cutting edge equipment and drawing on a large pool of expertise has already allowed slashing of practiacl production times to increase productivity to unheard of levels, which QC monitored demonstrations at the first plant have already proven. Granted, bringing new technology up to production speed quickly isn't always the wisest or most longest-sighted approach, as things can and will invariably go wrong or become obsolete. On the other hand, with this gamble it can be made to work profitably.

The plants are intended to run profitably using crop-based (sunflower etc) oil first, until such time as algae-oil becomes available.

At the pace DeBeers moves in South Africa, it isn't impossibe to envisage a 1-2 year timeline for the first full-scale biodiesel-from-algae plant. Granted, it probably won't run terribly efficiently, but give it 5 years and then we'll see.

Final (demonstrated) production capacity of each plant is 43 Ml, or 11 million gallons (US) of diesel yearly, running on sunflower oil. Multiply that by 90 plants and you get 900(ish) million gallons. Not so impossible to imagine. That is BEFORE scaling up to (near) double production capacity in phase 2 plants.

A lack of links to relevent information on respective sites leaves me wondering who is biased here and who hasn't given the reader full oppertunity to develop informed opinions and cross-reference facts? Perhaps google would do, but here are 2 links:

http://www.greenstarusa.com/products/photos8.html
http://www.infinitibiodiesel.com/

I'm no expert. I just did my homework and made a few friendly phone calls.

Bob
Johannesburg

The following transcript from a South African television program suggests problems run quite deep indeed at De Beers Fuel.

The program reports that disgruntled employees and associates have been leaving, and documents accusations ranging from alleged squandering of investors money, selling promises that were impossible to keep and intentionally misleading the public. It even documents ties between De Beers Fuel / Infinity Biodiesel and organized crime and convicted felons.

http://www.carteblanche.co.za/Display/Display.asp?Id=3286

According to Dr. Isaac Berzin, an Israeli scientist who worked for years in the United States and who has recently returned to Israel, seaweed is likely to provide a significant percentage of energy needs and to reduce greenhouse gases.

We are a start up company and we are looking for an investor to assist us in our algae farms. We are presently doing power,capacity and RECs in the USA, and we have bioreactors and machinery that will convert algae oils into biodisel, however, we need additional funding to place this on our selected sites in New Hampshire and North Carolina, USA......and we do do Joint Ventures with repitable companies like De Beers.

thank you

tony bruno
VP Plant Operations
Sanco Energy LLC