the focus is on ways to harness the power latent in algae at a scale that can be economically efficient.
In many ways, meeting this challenge is answering an agricultural question, much as has been done with other crops, Mitchell explained. “How do you farm algae,” he said. “We did this with corn, wheat, and other foodstuffs. How do we ‘domesticate’ algae?”
Algae, like other biofuel feedstocks, converts energy from the sun and carbon dioxide from the atmosphere into molecules that can form the basis of biodiesel, biogasoline, and other fuels. The allure of algae, in particular, comes down to its ability to grow faster than traditional root crops and its ability to use, as its carbon dioxide source, smokestack gasses from nearby power plants or industrial facilities.
When the ABO was coming together in 2008, green technologies had become darlings of investors seeking alternative fuels as a red-hot global economy helped push crude prices to $147 a barrel. It was a gold rush during which startups with shaky scientific and commercial credentials wound up attracting capital alongside more credible concerns. Venture capital investments in clean technologies—of which biofuels and biochemicals make up the largest portion—soared to a record $8.4 billion that year, according to the i3 data platform from Cleantech Group, a San Francisco-based research and consulting firm. A little more than $166 million of that went to algae companies.
But as economic activity slowed to a crawl by year’s end, oil prices plummeted—down to $32 a barrel at the end of 2008—and biofuels became less attractive as an investment. With the easy money spigot turned off, companies struggled to find capital patient enough to wait out the extended timelines for research and reengineering that developing biofuels requires.
Solazyme (NASDAQ: [[ticker:SZYM]]), for example, had to back off its initial plan to develop algae as alternative fuel in favor of quicker-to-market and higher margin products in cosmetics. And after struggling for eight years to find a way to scale and commercialize algae biofuels, GreenFuel in Cambridge, MA, shut its doors in 2009.
The thinning of the herd was good for the sector’s overall health, Michael Lakeman, regional director of biofuel strategy at Boeing in Seattle, told me. “It was an irrational exuberance with unrealistic claims,” he said. “As if algae biomass was a panacea, that it just needs capital.”
Venture investment
