An Arizona-based algae technology company is poised to produce algae-based jet fuel for SkyNRG, a Dutch renewable aviation fuel producer. Heliae CEO Dan Simon talks about his company’s efforts to develop technologies that enable large scale, cost-effective, production of bio-fuels.
Ted Simons: Heliae is a Gilbert-based algae technology company that reached a deal with a Dutch firm to turn the gooey mess found at the bottom of dirty swimming pools into aviation fuel. Here to talk about his company and the use of algae for jet fuel is Dan Simon, president and CEO of Heliae. Good to have you here. Thanks for joining us.
Dan Simon: Thank you very much.
Ted Simons: Did get it right, that's what Heliae does? Develop algae?
Dan Simon: Yes.
Ted Simons: For what, for not -- for jet fuel and other things?
Dan Simon: Yes. We're growing algae to make foods and fuel and chemicals.
Ted Simons: Describe this deal now with this Dutch firm. What's going on?
Dan Simon: Sky energy is focused on finding options for the aviation industry to offer products beyond petroleum-based aviation fuel. So they've the set up partnerships with a number of other suppliers, palm oil as an option, and algae, and we're the first true algae producer signing up with them to sell a jet fuel to the aviation industry.
Ted Simons: How far along is algae-based jet fuel technology?
Dan Simon: Algae-based jet fuel technology in our perspective, and I give only our own, it is anywhere from three to seven years depending upon capital investment. Because the key challenge is scaling it up.
Ted Simons: So three to seven years before it's cost competitive?
Dan Simon: Yes.
Ted Simons: What about supply? Able to supply, what is needed?
Dan Simon: Think about it like this -- there's 150 billion gallons of just take transportation fuels in general in the United States. We're only trying to make 1 billion gallon to start with. It will be years before you get to a point where you make a huge dent. But we're looking for options, and it's going to grow slowly.
Ted Simons: Talk about why it has grown slowly, or whatever pace it has grown. This seems like it should be -- algae seems like it grows exponentially, why are we now just finding out about it?
Ted Simons: It's a really good question. I probably would start with Saudi Arabian oil. It costs $19 to pull it out of a hole. Then go to tar sands, and the tar sands probably cost about $38-39 per barrel to pull it out, the process. Same issues with renewable fuels. Just go up the cost path, OK? If it's cheap, you're going to look for the easiest way to produce it, and that's petroleum. Now we recognize it's starting to disappear, we're not going to have enough in 50 years; you have to look for options. Algae are no different than renewable fuels. Corn and sugar were the easiest to make, but when people recognize there's a challenge to it, food versus fuel, and demand, so algae is farther down the path.
Ted Simons: You got some examples here, samples on the desk. What are we looking at here, and explain quickly if you could, how algae becomes oil, protein, and diesel fuel and all sorts of stuff.
Dan Simon: It's an incredible plant. It's one of the oldest molar chemicals we have in biomass products we have in the world; this is algae in its biomass form, once it's dried. This is algae oil, so once you harvest the algae, you separate it out and you create an algae, an oil product and think of this no different than you would crude oil, ok? And then you take it to a refinery and start breaking it up into pieces so you can make different types of high protein products, this is omega 3, like fish oil. Then you make diesel and jet; after processing it.
Ted Simons: So basically you could do a whole bunch with not a lot of algae.
Dan Simon: It's a very flexible process. It's also a flexible product.
Ted Simons: How much algae do you need to get a serious crop going, and how long before the algae turns into those vials?
Dan Simon: Well, what I can tell you is, and I'll compare to it corn. Corn has a harvest once every -depending upon what kind of corn you buy, between anywhere from 80 days to 130 days, OK? This we harvest every six days. Because it populates so quickly. Granted, it's a lot smaller but it takes anywhere from six to 20 hours depending upon the species of algae you're working with for it to double.
Ted Simons: My goodness!
Dan Simon: To ask how big a commercial plant is, that's the question I get a lot.
Ted Simons: Yeah, yeah.
Dan Simon: For a fuel-based plant to produce it at that cost, which is a lower cost than a high protein or a high food product, is going to take you anywhere from 300 to a thousand acres at technology currently. For a food-based plant it will take 5-15 acres.
Ted Simons: Wow. Okay, so where do we go from here? You got this deal. This is a development deal would I imagine? This Dutch farm?
Dan Simon: Yes.
Ted Simons: Where do we go from here?
Dan Simon: We continue to work with them. We're going to sell them our first barrel of oil, of jet fuel. We'll probably deliver it sometime in February or March. That's what we are targeting right now.
Ted Simons: Okay.
Dan Simon: And we'll continue to work with them in the European community.
Ted Simons: And real quickly - your relationship with ASU science foundation of Arizona, got to be big.
Dan Simon: It's very important. Without science foundation of Arizona, and our relationship with ASU, we probably wouldn't have targeted the company here. Although Arizona has everything you need from a climate and land perspective, all we need is sun and CO2 to make the stuff. But having science foundation of A.Z. there and ASU's technology, we were able to make the point of, OK, we'll build a headquarters right here, science foundation of Arizona contributed to ASU, in partnership with us to do the basic research to develop the strains to make the algae.
Ted Simons: Very good. It's good to have you on the show. Continued success and we'll look forward to hearing more news in the future.
Dan Simon: Thank you very much.
