AI EXCLUSIVE – 40,000 gal/day ALGAE OIL PRODUCTION ON TARGET FOR 2010 START

A program for producing bio algae oil is on target for initial production at the rate of 40,000 gal/day in Niland, California. Confirmation that SunEcoEnergy will begin production by late Q1 2010 coincides with news that Valero Energy, the largest U.S. oil refiner has contracted for 60,000,000 gal per year of another bio oil (jatropha) from NewEnergy in Australia. Also, a group of 15 airlines (U S, Canada and Germany) have contracted with suppliers for 350,000,000 million gallons per year of Jet-A fuel based on yet another bio oil (camalina).

These developments add to the race among a number of different bio oils being evaluated for their land, water, chemical, temperature, sunlight, other needs and characteristics including use of waste products.

Large scale contracts for bio crude oil add dimension to growing evidence that bio crude is coming into the mainstream for refining into U.S. motor fuel. . SunEco and a number of other bio firms, some now aided by U.S. Department of Energy financial support, are quickly moving bio crude into competition with petroleum. Not the least of those reaching for positions in bio fuels are the major oil companies for example, Exxon Mobil’s recent affiliation with Synthetic Genomics $600 million effort to optimize bio crude oil production at competitive cost.

SunEco bio crude oil production technology is based on both photosynthetic & heterotrophic manipulation of over 30 species of natural algae in a number of ways that have demonstrated exponentially higher yields in pilot operation. SunEco stresses that monocultural photosynthesis single species isolated technology does not apply to its system. The 40,000 gal/day yield relates to initial start-up production without use of all features of the firm’s technology for which production equipment is being procured. Views of the firm’s facilities can be seen at: www.sunecoenergy.com

SunEco’s Chief Information Officer, Hoyt Isom, tells AUTOMOTIVE INDUSTRIES progress is being made but the industry is in need of algae favorable public policies and development rules in order to optimize funding opportunities. He said permitting has been complex but points out that SunEco is helped to some degree in this respect by the fact that only natural algae strains are used…” our algae is not genetically modified”., he stresses.

Hoyt acknowledges that diesel engine makers are interested but cautious about extending warranties when bio fuels are used until in use evaluations are well advanced He says this is not a concern based on SunEco’s own use of the fuel at high concentrations in engines. Our fuel has good cetane and good lubricity, said Isom, but we realize the engine makers want to see this in long term practice, Hoyt said SunEco oil use in diesel fuel may initially be B5 (5% bio) or B10 (10% bio) and even B20 although we are confident B50 and higher concentrations will be used in time.

Targeted end uses of SunEco crude in diesel fuel for trucks, rail and marine use suggest the firm expects to be able to compete with petroleum based diesel without subsidies. . The plan is for bio crude to be supplied to refiners; not to end fuel users although SunEco has been working closely with J.B Hunt trucking operations which plans to use diesel fuel made with SunEco crude. Hunt’s tests with SunEco based fuel has been good.

Since algae bio fuel helps with the CO2 problem, can be produced in the U.S. with U.S. labor; does not need fresh water or valuable crop land or chemicals, and can provide a use for animal and human waste, it fills all the requirements for alternative drop in fuel
(A DOE objective for new fuels that can be used in existing engines and national fuel distribution system)
.
Hoyt said SunEco has brought its economic algae crude oil to the brink of commercial production with private investment and is positioned for vast expansion with available land and funding. He said we are not the only player in this field but can be one of the volume leaders.