Algae in the Matrix (Photo credit: jurvetson)

An Arizona-based algae technology company says it’s on to something big: harnessing the growth of algae at a commercial scale so that it can ultimately be used as a transportation fuel. “Heliae” broke ground Friday on its new plant. Now, all it needs is an abundance of sunshine, water and carbon dioxide.

But while the ingredients to make algae may be simple, it is still an open question as to whether current pilot facilities can attract private investors that will enable the industry to gear up. Beyond the financial concerns, environmental worries persist. It can involve taking carbon emissions from power plants to grow the algae before converting it to something that would run cars, trucks and airplanes.

In a phone interview, Heliae’s Chief Executive Dan Simon explained to this writer that the company’s ultimate goal is to produce transportation fuels. To get to that point, though, it will focus on near-term aims that are more attainable: chemicals, cosmetics and healthy foods. As it develops, the enterprise will then expand overseas and into the Asia Pacific region.

“We will never take our eyes off the transportation fuels,” says Simon. “But there are stepping stones to get us there. Production costs have to come down. Right now, the economics don’t work. It will be 5 to 10 years before all of this will affect the price at the pump.”

Simon continues, saying that “good science takes time” and that by first picking the “low hanging fruit” the company will drive revenues and efficiencies, and bring down production costs. Among the key goals the company is working towards: Ensuring that the process has a “positive energy impact,” meaning that it can’t take more energy to grow the algae than the amount of carbon dioxide that the algae would absorb.

Critics maintain that the recycling of carbon lends credence to the burning of fossil fuels and in the end, more carbon is emitted than is captured. The journal of Environmental Science and Technology, furthermore, looked two years ago at the life cycle of algae compared to other bio-fuels such as corn and switch-grass. It concluded that using conventional crops to create fuels will result in fewer greenhouse gas emissions and less water consumption than if algae is used to do the same thing.

The study also says that most of the carbon that is getting captured is coming from places other than power plants and oil refineries. That’s because there is not yet an effective way to bottle such releases from industrial sources.

Those findings, however, have been refuted by the Algae Biomass Association, which says that researchers have used outdated data that is tied to older production methods to draw their conclusions. To that end, the industry, which has kept its production processes proprietary, is now saying that it may be willing to share its newest information so that such students can better understand today’s technologies.

“If it it cost you more energy to make it, then what is the point,” says Nick Donowitz, director of corporate development for Heliae. “Based on the work we’ve done, we are charging on a path toward an energy neutral or energy positive system.”

Algae, today, is a blip on the radar. But, tomorrow, it may become a full-scale blimp. According to Pike Research, it could be a 61 million barrels a year commodity with a market value of $1.3 billion by 2020. That’s a compound growth rate of 72 percent, it adds. To put that in context, 83 million barrels of oil are consumed each day around the world. Of that, the United States uses about 18 million a day.

Article source: http://www.forbes.com/sites/kensilverstein/2012/05/20/will-algae-biofuels-hit-the-highway/

Asian universities are engaged in ground-breaking projects to counter waste, boost the use of alternative fuels and reduce emission of greenhouse gases.

Researchers at Universiti Tun Hussein Onn Malaysia (UTHM) and Azhar Food Industries both in the Malaysian state of Johor have collaborated to install a mini biodiesel plant in the latters factory.

Azhar Food Industries makes potato chips and crisps for the local market. The company previously had problems disposing of excess cooking oil, waste material that can be damaging if released into the environment.

Professor Dr Sulaiman Bin Haji Hassan, dean of the faculty of mechanical and manufacturing engineering at UTHM, said the project would contribute to the efficient use of a sustainable, renewable energy source in line with Malaysia’s development policy of promoting renewable energy as an alternative to traditional fuels.

Biodiesel is an environmentally friendly, alternative fuel prepared from domestic resources such as palm oil that can be used in normal diesel engine cars and buses without any engine modification, he explained.

It can be used either in the pure form (B100) or as blends in conventional diesel engines, and it is biodegradable. Johor, being a state abundant with palm oil plantations, is the perfect place for us to test and manufacture this kind of energy, Sulaiman explained.

The mini biodiesel plant at Azhars factory is already producing fuel that can run the companys truck fleet, which is used for daily transportation of food products.

Meanwhile, De La Salle University Dasmarias in the Philippines is setting its own carbon footprint in order through using electric vehicles.

eJeepneys, supplied by national manufacturer PhUV (Philippine Utility Vehicle) Inc, are used to transport students within its 27-hectare site as part of a drive to achieve a carbon-neutral campus.

Two eJeepneys were purchased by a parent-lecturer body called The Parents Organisation of Lasalle Cavite. It owns and operate the vehicles, charging PHP6 (US$0.14) for each passenger, from which one peso is paid to the driver while another peso is channelled into the university scholarship fund.

Each eJeepney runs on a battery that needs charging for eight hours. At the battery station, an eJeepney goes into a loading bay where the used battery is taken and replaced with a charged one the entire [changeover] process takes about 10 minutes, said Dr Carmelyn Cortez-Antig, a lecturer at the university.

Replacing a used battery with a fully charged unit costs PHP220 (about US$5) and provides for some 115 kilometres of travel, she said. Each eJeepney avoids the discharge of more than 62 kilograms of carbon dioxide exhaust emission per day.

The Malaysian and Philippine projects were presented at the recent AsiaEngage “Regional Conference on Higher Education-Industry-Community Engagement in Asia: Forging Meaningful Partnerships, held at Universiti Kebangsaan Malaysia, on the outskirts of the capital city Kuala Lumpur.

AsiaEngage is a platform by means of which a group of ASEAN (Association of South East Asian Nations) universities, regional networks and programmes share expertise, knowledge and experience in community engagement.

Article source: http://www.universityworldnews.com/article.php?story=2012051714504917

What happens to Sunoco’s 4,900 gas stations after it merges with Energy Transfer Partners?

Though it is really Sunoco’s pipeline affiliate that he covets, Kelcy L. Warren, the chief executive of the Texas pipeline company that is buying Sunoco Inc. for $5.3 billion, says he is “very comfortable” owning the iconic gasoline brand that has been a Philadelphia fixture for more than a century.

But many analysts say that ETP, which is based in Dallas, should unload Sunoco’s retail marketing unit.

“Those guys are not into the retail business,” said John R. Cusick, an analyst with Wunderlich Securities in Memphis, who follows ETP.

Energy Transfer Partners has received “a lot of inbound calls” about Sunoco’s gas stations since the merger was announced on April 30, Martin Salinas Jr., the company’s chief financial officer, told analysts this month. He added, however, that none of the inquiries had “any traction.”

Sunoco’s retail unit could be worth $1.8 billion, an analyst told a Wall Street Journal blogger this week. And the convenience-store trade press is abuzz with speculation about the prospect of 4,900 gas stations changing hands.

Analysts said potential buyers include Marathon Petroleum, a refiner that operates 5,100 outlets in 18 states; Montreal-based Alimentation Couche-Tard, which has 3,500 Circle K stores in the United States; and Global Partners L.P., which operates 800 fuel outlets in the Northeast under several brand names.

“We would be very interested in it, of course,” Global Partners chief financial officer Thomas J. Hollister told investors.

If Sunoco’s gas stations were sold, what would that mean to the legions of customers who buy 13.7 million gallons of Sunoco fuel every day?

Not much.

A change of ownership would likely be invisible to customers. A new owner would continue to operate the stations under the 126-year-old Sunoco brand, which the company has heavily promoted through its sponsorship deals with NASCAR and IndyCar, which continue until 2019 and 2014, respectively.

“Sunoco has a good amount of brand recognition, especially in the Northeast,” said Bradley Olsen, an analyst with Tudor, Pickering, Holt Co.

In a memo to Sunoco employees, senior vice president Robert W. Owens, who has lead Sunoco’s marketing unit for more than 10 years, encouraged the workforce to stay the course.

“Our day-to-day retail operations and marketing programs will not change,” said Owens, who remains as head of the retail operations. “Energy Transfer views our business as a solid asset with great cash flow. It plans to own the business and ensure that we are maximizing our potential in the marketplace. As a result, we have a great opportunity to showcase our talent and demonstrate what we can do.”

Of Sunoco’s 4,900 stations, the company owns or leases about 900 (including 600 convenience stores), and operates only about 400 stations itself. The vast majority of Sunoco stations are distributors — essentially franchises — that Sunoco does not own, lease or operate.

Despite complaints from customers about high gasoline prices, the competitive retail fuel business is not very profitable. At convenience stores, fuel typically accounts for 75 percent of sales but only a quarter of the profits, said Jeff Lenard, a spokesman for the National Association of Convenience Stores.

“There’s lot more money in the business from selling Slurpees and hot dogs than gasoline,” said Olsen, of Tudor Pickering.

Sunoco’s retail business earned $169 million in 2011 on $17.4 billion in sales, though it reported a loss for the first quarter this year when retailers could not raise prices fast enough to keep up with the relentless increase in the wholesale cost of gasoline. Profits improved in April after gasoline prices weakened, Michael J. Colavita, Sunoco’s chief financial official said.

The cyclical nature of selling fuel explains why analysts accustomed to ETP’s steady pipeline earnings are uncomfortable with taking ownership of thousands of gas stations.

“They’re just not as stable as pipelines,” Olsen said.

Some analysts also say Sunoco’s retail business would not be a good fit with Energy Transfer because the pipeline company is structured as a master limited partnership, a tax-avoidance mechanism that complicates the ownership.

Master limited partnerships don’t pay corporate taxes on their profits — the owners of the publicly traded shares, or units, are responsible for paying the taxes. But to qualify as an MLP under the tax code, the partnership must generate 90 percent of its income from sources such as producing or transporting oil and natural gas.

“Sunoco’s retail business doesn’t have qualifying income and doesn’t fit in with an MLP,” said Cusick, the Wunderlich analyst.

But other analysts say that Sunoco could continue to operate as a taxpaying corporation in the Energy Transfer family and pay its profits to the partnership in the form of a dividend without threatening Energy Transfer’s tax-advantaged status.

Brian P. MacDonald, Sunoco’s chief executive, told analysts that Sunoco executives had started to examine ways that Sunoco might be restructured to fit into an MLP structure but had reached no conclusions.

Contact Andrew Maykuth at 215-854-2947 or amaykuth@phillynews.com or follow on Twitter @Maykuth.

Article source: http://www.philly.com/philly/business/homepage/20120520_What_rsquo_s_next_for_Sunoco_rsquo_s_gas_stations_and_convenience_stores_.html