ENERGY-MEXICO: Big Plans for Ethanol from Algae

• by Verónica Díaz Favela* - IPS/IFEJ (mexico city)
• Friday, December 04, 2009
• Inter Press Service

The BioFields corporate office is located on the twelfth floor of a luxury tower in Lomas de Chapultepec, an exclusive Mexico City neighbourhood. For now, the company doesn't sell anything, but it has big plans to revolutionise the biofuel market.

Before the end of the year, BioFields will begin construction of a pilot plant to obtain ethanol from algae in Puerto Libertad, a town of 3,000 people in the northern state of Sonora, corporate affairs director Sergio Ramírez told this reporter.

The biofuel plant will be completed in the second half of 2010, said Ramírez, who was also the first employee recruited by the company, founded in February 2007.

BioFields holds the rights to use 'direct to ethanol' technology in Mexico. The method, developed and patented by the Algenol company, produces biofuel using hybrid blue-green algae, he explained.

The algae produce ethanol naturally, and the technique optimises the process so it can be done on an industrial scale. The ethanol produced can be mixed with gasoline in varying proportions, helping reduce emissions of greenhouse-effect gases generated by vehicles.

'The great success of this technology is that we found a type of algae that secretes ethanol naturally, saving two industrial steps: fermentation and synthesis into ethanol. This makes each microorganism a mini-factory,' Ramírez said.

The algae will grow and reproduce in pools of salt water that is pumped from the Sea of Cortés, which is just a few kilometres from the plant, he said.

In addition to the sun's rays, the algae will feed on nitrates and on the carbon dioxide produced by one of Mexico's most polluting thermoelectric plants, also located in Puerto Libertad.

In order to absorb that carbon dioxide, the pilot plant will be built on a 1.5-hectare area within the thermoelectric complex, which is owned by the Federal Electricity Commission (CFE for its Spanish initials), a federally owned energy company.

If the project goes as planned, the CFE will keep the funds generated by capturing CO2, as provided under the Clean Development Mechanism of the Kyoto Protocol on climate change.

The CDM allows industrialised countries, which are required under the Protocol to cut their greenhouse emissions, to offset their emissions by financing projects in developing countries that help fight climate change.

Once the algae-to-ethanol process proves what it can do, an industrial-scale plant will be built next to the CFE installations, in a desert area of 22,000 hectares. The aim is to produce more than 946 million litres of ethanol in 2014, and 3.8 billion litres in 2020.

The investment will be 850 million dollars, coming from the founder and director general of BioFields, Alejandro González, owner of the Gondi Group, one of Mexico's largest cardboard recycling companies.

BioFields' first customer will be Mexico. In 2012 the government-owned oil company Pemex plans to replace gasoline oxygenates (which represent five percent of each litre) with ethanol, which means it will need more than three billion litres per year.

But BioFields also plans to export. 'We are less than 300 kilometres from California, Arizona and New Mexico,' in the U.S. southwest, which are a major ethanol consumer market, said Ramírez.

The firm is also setting its sights on Japan and Europe. Mexico has signed trade agreements with those parties that would reduce import taxes.

But Ramírez acknowledged that BioFields will face big challenges before it can become a profitable company. First of all, the global biofuels market will have to be consolidated, he says.

If a new technology is developed in the next few years that allows low-cost, deep-sea oil drilling, enough to boost world petroleum reserves, the energy supply argument in favour of biofuels would not be as persuasive.

Researcher Michelle Chauvet, of the Autonomous Metropolitan University of Mexico, said in an interview for this article that biofuels are only profitable if oil prices climb above 50 dollars a barrel.

The other challenge for BioFields is the consolidation of the carbon market - an economic approach to reducing greenhouse emissions.

The firm needs to know if it will receive compensation for eliminating CO2 from the atmosphere, and if so, how much it can charge per tonne.

According to Rodolfo Quintero, a researcher with the university's technology and processes department, 'there is great interest in developing cheap and renewable fuels that don't come from hydrocarbons.'

'The era of cheap petroleum is over, and even though there will still be oil, it will be more expensive and scarce,' he said. Mexico itself has proved reserves of petroleum for just nine years, Quintero said.

Another aspect to consider is the negative side of first generation biofuels - ethanol and biodiesel from maize, sugarcane, soy and wheat - because they are made from food crops. With competition from the energy sector for supplies, food prices tend to go up.

Quintero also pointed out that those first-generation biofuels do not provide environmental advantages over fossil fuels, especially when one takes into account the environmental effects of the entire process from cultivation to consumption.

The BioFields approach 'isn't bad, but they have to prove that it works on an industrial scale,' said the researcher.

Chauvet, who studies the social effects of biofuel production, believes that beyond the BioFields project it is necessary to keep in mind the experiences of other countries.

Malaysia, Indonesia, Sumatra and Borneo deforested their jungles in order to supply biofuels to Europe. Argentina has seen rural population displaced as a result of the expansion of genetically modified soy, which has also led to desertification, thus further contributing to climate change.

According to Chauvet, who also holds a doctorate in economics, the move towards ethanol production from algae is a more acceptable option for Mexico than other ethanol sources, though she says labour conditions must be monitored because companies in some places treat their workers 'almost like slaves.'

BioFields calculates that the construction of its energy plants will create 1,500 temporary jobs, and once they are up and running, 350 permanent jobs.

The people of Puerto Libertad work in fishing, which is seasonal, and are hopeful that they will see some benefits from the biofuel project, according to Lauro Urial, secretary of Pitiquito municipality, where the town is located.

*This story is part of a series of features on sustainable development by IPS - Inter Press Service and IFEJ - International Federation of Environmental Journalists, for the Alliance of Communicators for Sustainable Development (www.complusalliance.org).

© Inter Press Service (2009) — All Rights ReservedOriginal source: Inter Press Service

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