General Atomics, SAIC to explore algae fuel for less

Dec 27, 2008 - Mike Freeman - SignOnSanDiego.com

Two San Diego-based defense contractors have received federal grants totaling nearly $35 million to drive down the cost of making jet fuel from algae.

General Atomics and SAIC received the contracts from the Pentagon's Defense Advanced Research Projects Agency, or DARPA. It is the military's research and development funding arm and is seeking biofuel alternatives for military aircraft, which make up a significant percentage of the $6 billion the military spends on fuel annually.

A team led by General Atomics of San Diego – a privately held company best known as the maker of the Predator unmanned aircraft – got a $19.9 million grant. SAIC, a wide-ranging defense research and engineering firm also known as Science Applications International Corp., leads a group that received $14.9 million.

It is unclear whether SAIC's research work will be done in San Diego. A spokeswoman for the company declined to discuss the grant or SAIC's partners. Some biofuels scientists found the SAIC award puzzling since the company isn't known to have an active biofuels research program.

General Atomics began researching biofuels at its San Diego campus about two years ago and now has a team of about 20 researchers on the project.

David Hazlebeck, program manager for General Atomics, said algae are a promising source of biofuel because they can conceivably meet all U.S. oil needs using a relatively small amount of acreage – and acreage that generally is not productive for other crops such as corn or soybeans.

Although small, algae generate more oil per individual cell than most plants. The simple organisms are essentially made up of oil and protein, said Hazlebeck.

“Where with other materials you might get 50 to 100 gallons (of vegetable oil) per acre per year, with algae you're going to range from 5,000 to 15,000 gallons per acre per year,” Hazlebeck said.

Of course, algae grow in water. But scientists say that's not necessarily a problem since the organisms can be grown in brackish – or salty – water and would not compete for dwindling supplies of fresh water.

Federal studies have already proven that jet fuel can be made from the vegetable oil. The problem is the cost, which can be as high as $30 per gallon.

“That's the object of the DARPA award – bring that cost down from $30 per gallon to about $1 per gallon,” Hazlebeck said.

Several companies are looking at algae as a potential biofuel locally, most of them small, private firms. One of the larger private companies conducting this research is Sapphire Energy.

Sapphire, which raised $100 million in venture capital from Bill Gates, Arch Venture Partners and others, aims to use a host of means, including possible genetic engineering, to try to produce not just vegetable oil but a more refined biofuel from algae.

This more refined fuel would need little or no additional processing to work. Efforts to reach Sapphire were unsuccessful.

The DARPA-funded projects are not using genetic engineering to alter the algae. They aim to produce vegetable oil that would have to be further refined into jet fuel.

General Atomics will work with several partners on its contract, including the Scripps Institution of Oceanography in San Diego, Hawaii BioEnergy in Honolulu and the University of North Dakota's Energy and Environmental Research Center.

Although it will look at all aspects of algae production to lower costs, the General Atomics team plans to focus on increasing the yield per acre.

During the first 18 months of the project, teams from General Atomics and SAIC will try to get costs of algae-based oil down to $2 a gallon. In the following 18 months, they will push to drop it to $1 a gallon and build a 30-to 50-acre demonstration facility.

Mike Freeman: (760) 476-8209; mike.freeman@uniontrib.com