"It's like I give you $1 million and you convert it to $1 bills, and you light it on fire to make energy," said Avigad Vonshak, a professor at Ben-Gurion University in Israel who has studied algae for decades. "I think it will be from stupid to nonsensical to believe that in any given time it will be an economically feasible process to extract fuels from microalgae."
... major oil companies like BP PLC and Royal Dutch Shell PLC (are moving ) toward dramatic overhauls of their businesses, with significant investments in renewables, electric car charging and hydrogen.
... Exxon ... is staking its fortunes on projections that population growth in developing countries will fuel the need for more oil and gas.
... Biofuels and carbon capture preserve the value of the company's existing assets, essentially offering them a second life in a world where oil and gas consumption is significantly reduced. Pipelines and refineries would still be needed in a world running on biofuel.
... Exxon Mobil's interest in algae-based biofuels dates to 2009, when it unveiled a $600 million investment in algae with Synthetic Genomics Inc., a California-based biotechnology company.
... oil prices had reached nearly $100 a barrel, almost triple today's cost, creating a significant incentive to find alternatives.
Ethanol production boomed as a result, but ... critics argued ethanol production used more energy than the fuel provided. It was against that backdrop that Exxon Mobil announced its foray into algae.
... (algae) can be grown in arid conditions and in brackish water, meaning it is not competing for land with farmers growing food.
... Algae are single-cell organisms that use photosynthesis to covert sunlight into fat or lipids, which can be used to make the fuel.
... Algae are likely to mirror renewables in that it will take decades to come to fruition, Stephen Mayfield, a professor of biology at the University of California, San Diego, wrote in an email. "Fuel is the cheapest commodity on the planet, so it will likely be the last product from algae to be commercialized, but if we stay on the path we are on now, we will eventually get to the efficiencies that allow algae biomass to be used as a biofuel," he wrote. "I doubt very much it will be because of any single discovery, and almost certainly not one made by Exxon"
There is a good reason for the rhetorical shift. Electric vehicle costs are plummeting. BloombergNEF expects EVs to achieve cost parity with internal combustion engines by the mid-2020s, the point at which many analysts expect EV adoption to accelerate.
The fast-changing vehicle market underscores the potential risks of Exxon Mobil's strategy of greening its existing business.
"The rationale was they can use biofuels in the existing distribution network and hence they would rather invest in that because it does not disrupt their main business lines," said Artyom Tchen, an analyst at Rystad Energy, a Norwegian oil consultancy. "Since then, during the last three-four years, we have seen a completely new source of disruption. This is electric vehicles. They challenge completely this whole distribution network of petroleum products."
Biofuels could still be an important solution for reducing emissions from hard-to-green sectors of the economy. Aviation, in particular, figures to be a challenge. Batteries are simply too heavy and large, presently, to power a plane and carry passengers at the same time.
What separates Exxon Mobil from its peers is its focus on algae as a source of biofuel ...
Doherty expressed doubts algae-based biofuel could compete on a cost basis at scale.
"Unless they see the intervention that we've seen in road fuels, you won't see massive penetration of biofuels in hard-to-abate sectors," Doherty said. "Why would an airline, which is thin on margin, switch to a four times more expensive fuel unless they are required to? That's for basic biofuel. Then algae is next level."
Exxon Mobil has provided few updates on its progress. The company's 2019 research and development report shows it has spent $300 million on biofuels research in the past decade. In 2018, Exxon Mobil and Synthetic Genomics began field testing algae cultivation in open-air ponds at a facility in California.
... Some researchers are doubtful Exxon Mobil will succeed.
In a commercial setting, algae are grown in open-air ponds known as raceways. Large paddles turn the water to ensure the organisms have uniform access to sunlight and nutrients. A CO2 source, like flue gas from a power plant or wastewater effluent, is fed into the ponds to stimulate growth. When the algae are ready for harvest, they are dried. Scientists then use a chemical process to separate and convert the algae into fuel.
But many of the same traits that made algae attractive to Exxon also present challenges. An ongoing study carried out by the National Renewable Energy Laboratory in Arizona shows why.
High evaporation rates in arid regions can cause saline levels to rise to dangerous levels for algae, and removing the salt is expensive. NREL assumes a commercial-scale facility in Arizona would need to dispose of the salty water by injecting it deep into underground wells, much as oil and gas drilling operations do, significantly adding to the overall costs.
Minimizing costs would likely require using fresh water or building facilities in areas like the Gulf Coast, where evaporation rates are lower, the researchers said.
That points to another potential challenge: the availability of land. NREL's model for a commercial-scale algae facility calls for 5,000 acres of open-air algae ponds plus an additional 2,000 acres for support facilities. Yet all that land would produce only a limited amount of fuel.
Exxon Mobil spent a total of $1.5 billion on corporate promotion across all media over the last decade, according to Kantar Media filings reviewed by Robert Brulle, a researcher at Brown University who tracks climate denial funding. That sum exceeds its spending on algae-based research.
... "They're
not selling you algae. They're selling you, there's good guys at
Exxon," he said. "You don't need to regulate us, you don't need to sue
us. We're good guys."