Thursday, December 13, 2007

[PBN] Shell to invest in biofuel from Algae in Hawaii


Shell bets on algae to make biodiesel

By Ed Crooks

Published: December 12 2007 02:00 | Last updated: December 12 2007 02:00

Royal Dutch Shell hopes to build a commercial plant producing biodiesel
from algae in two years' time, following the launch yesterday of a joint
venture to develop a research project in Hawaii.

The joint venture, with Hawaii-based HR Biopetroleum, will initially
build a small research plant but hopes to move to a full-scale
commercial plant of 20,000 hectares. Shell said it expected yields of
about 60 tonnes of oil per hectare a year, meaning a full-scale plant
would produce 1.2m tonnes of oil a year.

The two companies did not reveal the size of the investment, but Shell
will have a majority stake in the company, called Cellana.

Shell has held back from production of first-generation biofuels such as
ethanol and biodiesel from vegetable oil, focusing on second-generation
fuels that can be produced from non-food plants or plant waste. It has
argued that government support for biofuels ought to give greater
incentives to second-generation products on the grounds they are likely
to have much better environmental performance, particularly in cutting
carbon dioxide emissions.

Graeme Sweeney, Shell's head of future fuels, suggested that biodiesel
from algae would need such support to be viable. He said: "The issue for
us is that we are here investing in providing sustainable routes to
biofuel with a low-carbon footprint."

As a biofuel product, algae has advantages over traditional crops. It
uses less space and can been grown in salt water, relieving pressure on
agricultural land and fresh water, among the biggest problems associated
with first-generation biofuels. It also has higher yields.

Shell said its "conservative" estimate of an annual oil yield of 60
tonnes per hectare was 15 times the four tonnes a year possible with
jatropha, a biofuel crop being pioneered by D1 Oils in partnership with BP.

But Mr Sweeney admitted there was a long way to go to prove the
commercial viability of the process.

Separately, Shell confirmed that it had sold its rural solar businesses
in India and Sri Lanka and was selling the equivalent business in the

However, it said it had not given up on solar power, and was investing
in a pilot project in Germany in a joint venture with Saint-Gobain.

Copyright The Financial Times Limited 2007


Shell Builds Algae Biofuel Lab
By Associated Press December 11, 2007

Royal Dutch Shell PLC said Tuesday it will build a facility in Hawaii to
grow and test algae for its potential as a biofuel.

Shell is Europe's largest oil company, posting $6.92 billion in net
profit in the third quarter. A Shell spokeswoman in London declined to
say how much money the investment represented.

"This is a 2.5 hectare (6 acre) demonstration project, and it will take
up to two years to complete," Shell spokeswoman Olga Gorodilina said of
the project. Whether it proceeds further "will depend on the results,"
she said.

Like corn, sugar cane, palm oil, soya and various kinds of grasses,
algae has long been considered a candidate crop for furnishing vegetable
oils useable as a replacement for diesel, reducing greenhouse gas emissions.

Amid current worries over global warming, scientists and entrepreneurs
are seriously re-evaluating alternatives fuels.

Shell competitor Chevron Corp. and the U.S. Department of Energy's
National Renewable Energy Laboratory announced a similar project in October.

"Construction of the demonstration facility on the Kona coast of Hawaii
Island will begin immediately," Shell said in a statement.

"Algae hold great promise because they grow very rapidly, are rich in
vegetable oil and can be cultivated in ponds of sea water, minimizing
the use of fertile land and fresh water."

Shell will form a majority-owned joint venture to build the project with
Delaware-based HR Biopetroleum Inc., which has expertise in growing algae.

Shell said it plans to test several kinds of algae to find the optimal
oil-producing strain, and it will also add carbon dioxide to the algae's
growing tanks to test how much it aids growth.

If it works as hoped, future algae farms would be located near
traditional fossil fuel-based power plants, and siphon off some of their
carbon dioxide to help the algae grow and reduce overall emissions.

If tests are successful, the next step would be the construction of a
100 hectare (250 acre) project to test commercial viability, Gorodilina

A full-scale commercial production facility would occupy 20,000 hectares
(50,000 acres), but she could not say when that might be built.

"Algae have great potential as a sustainable feedstock for production of
diesel-type fuels with a very small CO2 footprint," said Graeme Sweeney,
a Shell executive overseeing the project, in a statement. "This
demonstration will be an important test of the technology and,
critically, of commercial viability."

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