August 6, 2010 – 2:00pm
Some biotech companies use outdoor ponds to make algae-based biofuels, but Harrison Dillon and Jonathan Wolfson, co-founders of San Francisco-based Solazyme Inc., are taking an inside approach: a pharmaceutical company’s fermentation tanks.
“Oil that costs $1,000 per gallon to make in a pond will cost about $1.50 to $2 per gallon in the next year or so using these kind of tanks,” Dillon says. “We can use existing infrastructure for this process.”
Those are attractive qualities and part of the reason the U.S. Department of Energy – whose goal is to scale up production of commercially viable biofuels – awarded the company $21.8 million under the American Recovery and Reinvestment Act to expand its biggest production facility at Cherokee Pharmaceuticals in Riverside, Pa.
The award will help Solazyme take production from tens of thousands of gallons a year of its algae “drop-in” oil – made by feeding non-food biomass to algae in fermentation tanks – to an annual production capacity of over half a million gallons. Because of the large preexisting fermentation infrastructure at Cherokee, additional expansion could yield capacity well in excess of one million gallons per year.
The goal, Dillon says, is to produce at a price that competes with fossil fuel, something that should happen in the next year, assuming the fuel is produced in a commercially sized and equipped plant.
The expansion at the Cherokee facility will also create about 80 new permanent jobs and 250 indirect jobs, according to Solazyme.
“We are using that existing facility infrastructure and this employee base to deploy the newest [algae] technology available,” Dillon says.
In 2008, Cherokee Pharmaceuticals bought its facilities from Merck Pharmaceuticals, which shut down three years prior, and hired a majority of the 450 people laid off from the closure.
The fermentation facility that once made food additives, however, was left idle, says Betse Humphrey, a spokesperson for Cherokee.
In an effort to utilize the facility and workers, Cherokee started taking on new customers. Solazyme was among the first.
Today, 46 people work at the fermentation facility that supports Solazyme. Another 80 people will come on board once the expansion is complete, some of whom will be stationed in San Francisco, according to Solazyme.
“We play a very strong role in the community, in terms of being an employer,” Humphrey says. “We’ve been interested in growing this plant, and that growth is partly due to Solazyme and the fermentation facility. We’re excited about the expansion.”
Sugar over sunlight
Some companies use the sun to produce algae-based biofuels, but Solazyme uses sugars.
Solazyme’s technology involves “feeding” carbon compounds, such as sugar, to algae, which then convert it to oil and other biomaterials in a fermentation vessel.
In order to tap into a broader feedstock supply and achieve a more sustainable process, Solazyme has done extensive work on the carbon compounds found in abundant lignocellulosic biomass – such as agricultural residues, switch grass, and wood waste that are in close proximity to the plants. They plan to make use of these feedstocks for commercial production.
That “algae oil” can then be sent through pipelines and to refineries to make biofuels for vehicles, planes, etc.
Formed in 2003, or “the stone ages of next-generation biofuels,” as Dillon jokes, the company started with ponds, but moved to fermentation facilities when Wolfson and Dillon realized they could produce algae more efficiently, cost effectively and at large scale.
The company has been leasing fermentation facilities across the U.S. for the last four years to make the oil, but started utilizing the space in Riverside in early 2009 as part of its mission to ramp up production.
These days, Solazyme produces biofuels for military and aviation clients.
The company recently delivered 1,500 gallons of algae-based jet fuel for Navy’s testing and certification program and by the end of the summer will complete delivery of over 20,000 gallons of diesel fuel under a related Navy program.
Dillon says Solazyme is looking to build a large-scale production facility and refinery that could produce millions of gallons of the algae-based oil per year.
“We certainly intend for this to be deployed commercially – to any customer who uses diesel,” Dillon says.