L.A. Algae Business Looks to Dive Into Wastewater

0

An L.A. startup that develops technology to turn algae into fuel is getting a boost from an unlikely source: the wastewater treatment industry.

It turns out that the technology used to extract algae from water is similar to that used to extract waste from wastewater. So OriginOil Inc. announced last week a distribution and manufacturing partnership with World Water Works Inc., a maker of water treatment products in Oklahoma City. The two have agreed to combine some of their technologies into one product to sell to other companies in the emerging algae biofuel market.

The move also signifies OriginOil’s interest in the possibility of growing algae in wastewater facilities.

“It puts us squarely as a company that’s going into the commercial stage from what was primarily a research stage,” said co-founder and Chief Executive Riggs Eckelberry. “Our products are in the field being paid for and now about to get distribution.”

OriginOil’s long-term business plan is to license its algae-processing technology to other companies looking to grow and extract algae. World Water Works had already begun doing that on its own, so the agreement promises OriginOil new clients. OriginOil executives hope to ink more such deals in the next year.

The company has developed machines that shoot electromagnetic pulses to separate algae from water, and that extract oil from the algae.

Eckelberry believes that wastewater treatment facilities, where nitrate-rich water and carbon dioxide are present, are a perfect environment to grow algae in the future. He wants to position the company to license its technology to algae growers should they start going that route.

Algae production can be expensive in part because of the huge amount of water needed, but that wouldn’t be a problem at such facilities.

“We have a great platform now in the wastewater industry,” he said. “But one of the things we have to do is wait for companies to show up that are going to grow algae commercially that way.”

Not yet profitable

OriginOil was founded in 2007 by Eckelberry, who spent nearly three decades in the technology industry, and his brother, Nicholas Eckelberry, an inventor with a background in environmental engineering. The company began listing its stock in 2008 on the Nasdaq OTC Bulletin Board, and has raised around $9 million after several rounds of funding.

By some estimates there are more than 100 algae biofuel companies. OriginOil has only two customers – Australia’s MBD Energy Ltd. and Mexico’s Genesis Ventures. The company’s revenue last year was $45,500, the first time it generated any business since beginning operations in 2007. It has yet to make a profit. Shares closed at 16 cents April 14.

However, Eckelberry said the revenue figure already has been topped in the first quarter of this year. He predicted revenue could reach seven figures by next year with the addition of more customers.

Still, despite increasing interest and investment in algae as an alternative to petroleum, questions remain for the industry as a whole. The process is still too costly to compete with other energy sources. Forecasts on when it will become cost-effective vary from just a few years to at least a decade.

“It will take some time,” said John R. Benemann, an algae biofuel consultant in Walnut Creek. “We don’t know exactly when, but it won’t happen in the next year or two, that’s for sure.”

In the meantime, Benemann said more startups are exploring other end uses for algae instead of fuel, including extracting food ingredients such as vegetable oil.

Eckelberry said OriginOil is also branching out into other uses for its technologies. Its project with MBD Energy of East Melbourne uses algae to capture carbon dioxide emitted by coal plants, and the deal with World Water Works includes the possibility of selling its products for normal wastewater treatment.

“Biofuels are still expensive,” he acknowledged. “It’s going to take a while to build up. It’s early.”

No posts to display