BusinessTN

The recent rising tide of investment in biofuels production throughout the nation includes a Tennessee company seeking to transform algae into "green" crude.

Norm Johnson, the chairman and CEO of Franklin-based CLARCOR, is enthusiastic about the prospects of a joint venture with BioProcessAlgae LLC and Green Plains Renewable Energy to build an algae-to-fuel pilot project in Shenandoah, Iowa. Their venture was recently awarded a $2.1 million grant from the Iowa Office of Energy Independence.

Some West Tennessee residents may be familiar with Green Plains, which runs a 110-million-gallon-per year corn ethanol plant in the town of Obion. Ethanol producers have been experimenting with sources other than corn for ethanol for some time. The joint venture's goal is to build photobioreactors that will grow algae from which oil can be extracted and used commercially. Algae work as tiny factories using photosynthesis to transform carbon dioxide and sunlight into lipids, or oils. Scientists say some strains can double in size in a few hours and, if force-fed carbon dioxide, may be able to grow even faster. This would prove doubly useful, since carbon dioxide is a plentiful byproduct of power plants.

For CLARCOR, a filtration and packaging business that moved its headquarters from Rockford, Ill., to Franklin five years ago, the investment in the joint venture is only one avenue being pursued by the company in an attempt to explore new opportunities in an economy in flux. Like many companies, CLARCOR has struggled with the global economic downturn. Its sales for the first quarter ending May 30 were down 14%, going from $261 million to $229 million. (Profits dropped 32% from $24.6 million to $16.7 million.) Still, CLARCOR's Johnson expects to finish the year solidly profitable.

And though no one expects the algae fuels project to boost CLARCOR's financial bottom line any time soon, Johnson is upbeat about a bright future for the production of biofuels from algae.
"Algae is probably one of the best feedstocks for this process," Johnson says. "The main part of the technology involves filtration in wastewater systems, and we're heavily involved in that."

But CLARCOR isn't the only entity interested in the technology. Al Darzins, principal researcher at the National Renewable Energy Laboratory in Golden, Colo., which just announced an acceleration of efforts to identify the most promising algae strains for fuel production, says he gets calls every day from people who want to get into algae fuels. "There are hundreds of companies looking into it now here, in Europe and in the Middle East," he says.

Eric Wesoff, an analyst with Cambridge, Mass.-based firm Greentech Media, says literally hundreds of millions of dollars have been flowing into the area for the last couple of years. Even Exxon Mobile Corp. announced in mid-July it will sink $600 million into a project to create algae-based fuels.

But growing algae in photobioreactors and producing oil on a scale large enough to feed the ethanol production process has yet to be done successfully.

"The problem isn't getting oil from algae," Wesoff says. "The problem is scaling it to meaningful quantities."

In early August, the photobioreactors will be unveiled in Iowa for public demonstration, says Jim Stark, vice president, investor relations, Green Plains Renewable Energy. "What we're trying to do is prove that the technology works then show how we'll scale the project."

Thus, while it's possible to turn pond scum into oil, the quest to turn it into liquid gold continues.