Simanaitis Says

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THE IDEA of turning algae, a smart version of pond scum, into automotive fuel is a tantalizing one. In its production of synthetic hydrocarbons, the process can use non-arable land and the most brackish of water. It exploits sunlight as energy input. And it even taps atmospheric COas a feedstock.

What’s not to love?


Oil derived from algae. Image by Jim Wilson from The New York Times, June 22, 2013.

At this stage of biofuel R&D, the microorganisms required for growing high-quality products aren’t inexpensive nor necessarily completely benign. (Escheriichia coli, E. coli, is one of them.) There are several competing processes, each with benefits and shortcomings, most of which require subsidies today. And it’s not clear which of them can be upscaled into volume production.

However, several entrepreneurs have proposed a different business model: “Aim high, not large yet.”

That is, they forgo the extreme throughput and relatively tight profit margin of automotive fuel production for other businesses that use petroleum today—cosmetics, nutrition and pharmaceuticals. People buy gasoline by the gallon, but face lotion by the ounce. And in that inevitable future when the Earth’s crude oil approaches exhaustion, it will make economic sense to use this petroleum for other than mere combustion.

Thoughts on this were prompted by a piece in The New York Times earlier this year, June 22, 2013. (See


The algae business is multifaceted indeed. This and images following from

One of today’s serious players in algae-derived oil is Solazyme, a South San Francisco-based company that stresses health sciences, nutrition and chemicals along with fuel as its active areas of R&D. Skin care products of the Algenist brand contain proprietary polysaccharides extracted from algae. Algae-derived oils and powders are used in food products, in lieu of those based on eggs, butter and vegetable oil. Claimed benefits include reduced calories, less saturated fat, lower cholesterol and enhanced taste.


Solazyme has already developed SoladieselBD and SoladieselRD, the subscripts indicating “biodiesel” and “renewable diesel.” Its Solajet jet fuel has been used in a U.S. Navy testing and certification program.

“In the longer term,” its website notes, “we expect to sell our oil directly to refiners, accessing their distribution infrastructure.”

In the meantime, the company is already marketing the Algenist brand.

This “aim high, not large yet” model has already been successful in other industries, among them fashion, food and automotive. Offer haute couture, not T-shirts. Emulate Alice Waters and her Chez Panisse Restaurant, not Ray Croc and his Golden Arches. Manufacture a Tesla Model S, not a car going head to head with Ford or GM.

If things work out, then design the next iteration to halve the price and double the volume.

Or, in the algae business, gradually sell more product by the gallon—in time, millions of gallons—and not just ounces. ds

© Dennis Simanaitis,, 2013

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This entry was posted on August 19, 2013 by in Sci-Tech and tagged , .
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