[Senate Hearing 111-145]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-145
 
RANGE OF INNOVATIVE, NON-GEOLOGIC APPLICATIONS FOR THE BENEFICIAL REUSE 
      OF CARBON DIOXIDE FROM COAL AND OTHER FOSSIL FUEL FACILITIES

=======================================================================

                                HEARING

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            SPECIAL HEARING

                      MAY 6, 2009--WASHINGTON, DC

                               __________

         Printed for the use of the Committee on Appropriations


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                      COMMITTEE ON APPROPRIATIONS

                   DANIEL K. INOUYE, Hawaii, Chairman
ROBERT C. BYRD, West Virginia        THAD COCHRAN, Mississippi
PATRICK J. LEAHY, Vermont            CHRISTOPHER S. BOND, Missouri
TOM HARKIN, Iowa                     MITCH McCONNELL, Kentucky
BARBARA A. MIKULSKI, Maryland        RICHARD C. SHELBY, Alabama
HERB KOHL, Wisconsin                 JUDD GREGG, New Hampshire
PATTY MURRAY, Washington             ROBERT F. BENNETT, Utah
BYRON L. DORGAN, North Dakota        KAY BAILEY HUTCHISON, Texas
DIANNE FEINSTEIN, California         SAM BROWNBACK, Kansas
RICHARD J. DURBIN, Illinois          LAMAR ALEXANDER, Tennessee
TIM JOHNSON, South Dakota            SUSAN COLLINS, Maine
MARY L. LANDRIEU, Louisiana          GEORGE V. VOINOVICH, Ohio
JACK REED, Rhode Island              LISA MURKOWSKI, Alaska
FRANK R. LAUTENBERG, New Jersey
BEN NELSON, Nebraska
MARK PRYOR, Arkansas
JON TESTER, Montana
ARLEN SPECTER, Pennsylvania

                    Charles J. Houy, Staff Director
                  Bruce Evans, Minority Staff Director
                                 ------                                

              Subcommittee on Energy and Water Development

                BYRON L. DORGAN, North Dakota, Chairman
ROBERT C. BYRD, West Virginia        ROBERT F. BENNETT, Utah
PATTY MURRAY, Washington             THAD COCHRAN, Mississippi
DIANNE FEINSTEIN, California         MITCH McCONNELL, Kentucky
TIM JOHNSON, South Dakota            CHRISTOPHER S. BOND, Missouri
MARY L. LANDRIEU, Louisiana          KAY BAILEY HUTCHISON, Texas
JACK REED, Rhode Island              RICHARD C. SHELBY, Alabama
FRANK R. LAUTENBERG, New Jersey      LAMAR ALEXANDER, Tennessee
TOM HARKIN, Iowa                     GEORGE V. VOINOVICH, Ohio
JON TESTER, Montana
DANIEL K. INOUYE, Hawaii (ex 
    officio)

                           Professional Staff

                               Doug Clapp
                             Roger Cockrell
                         Franz Wuerfmannsdobler
                        Scott O'Malia (Minority)
                         Brad Fuller (Minority)

                         Administrative Support

                              Michael Bain


                            C O N T E N T S

                              ----------                              
                                                                   Page

Opening Statement of Senator Byron L. Dorgan.....................     1
Statement of Senator Jon Tester..................................     4
Statement of Scott M. Klara, Director, Strategic Center for Coal, 
  National Energy Technology Center, Department of Energy........     5
    Prepared Statement...........................................     7
Coal Research and Development Program............................     7
Carbon Capture and Storage.......................................     7
CO2 Re-use Technologies...............................     8
The American Recovery and Reinvestment Act.......................    10
Statement of Jeff D. Muhs, Executive Director, Center for 
  Biofuels, USU Energy Laboratory, Utah State University.........    11
    Prepared Statement...........................................    13
Statement of Brent R. Constantz, Ph.D., Chief Executive Officer, 
  Calera Corporation.............................................    14
    Prepared Statement...........................................    16
Level the Playing Field for New Technologies.....................    17
The Calera Process: CMAP Technology and Low-voltage Base 
  Production.....................................................    17
Cost-efficiency..................................................    19
Pollutant Removal................................................    19
Demonstration Plants.............................................    19
Beyond Cement....................................................    21
Recommendations..................................................    22
Statement of Marjorie L. Tatro, Director of Fuel and Water 
  Systems, Sandia National Laboratories..........................    22
    Prepared Statement...........................................    24
Summary of Key Points............................................    24
Thinking Differently About Energy, Carbon and Security...........    25
Algal Biofuels...................................................    27
Synthetic Fuels From CO2 and Water....................    29
Extracting CO2 From Air...............................    30
Algae Biofuels and Carbon Recycling--A Summary of Opportunities, 
  Challenges, and Research Needs.................................    35


RANGE OF INNOVATIVE, NON-GEOLOGIC APPLICATIONS FOR THE BENEFICIAL REUSE 
      OF CARBON DIOXIDE FROM COAL AND OTHER FOSSIL FUEL FACILITIES

                              ----------                              


                         WEDNESDAY, MAY 6, 2009

                               U.S. Senate,
      Subcommittee on Energy and Water Development,
                               Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:04 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Byron L. Dorgan (chairman) 
presiding.
    Present: Senators Dorgan, Tester, and Bennett.


              opening statement of senator byron l. dorgan


    Senator Dorgan. I am going to call the hearing to order.
    This is a hearing of the Energy and Water Subcommittee on 
Appropriations in the U.S. Senate. Today, we are going to hold 
a hearing on the beneficial reuse of carbon dioxide, 
CO2. The $3.4 billion for carbon capture and 
sequestration funding that was put in the stimulus program, or 
the economic recovery program, includes beneficial use in that 
solicitation.
    And one of the reasons that we wanted to have this hearing 
is I am convinced that we will need to continue to use coal in 
our future. Fifty percent of the electricity comes from coal. 
The question isn't whether we use coal. The question is how.
    And my belief is that we will continue to use coal, but in 
a different way. We need to make a significant effort to 
decarbonize coal, and the question is what do you do with that 
carbon?
    Perhaps some will be used for enhanced oil recovery. 
Already that is the case with a project in North Dakota, and 
that makes a lot of sense. Some will be sequestered somewhere, 
and some will be used for, we hope, beneficial use. And that is 
the purpose of this discussion.
    We need to look at a wide range of options for sequestering 
CO2 and using CO2. The issues that we 
will discuss today increase those options.
    We know that there are benefits that can come from storage 
in soils of CO2. We have a project in North Dakota, 
sponsored by the North Dakota Farmers Union, which has 
established carbon credits on the Chicago Climate Exchange. 
They are the largest aggregator of agricultural carbon credits 
on the CCX, with more than 5 million acres enrolled in 31 
States.
    But there has been growing interest and need to support 
carbon capture and storage on a very large scale, both in this 
country and around the world. The Department of Energy 
Technology Laboratory study shows that if the United States 
emits about 2 gigatons of CO2 a year from coal-fired 
power plants, then there could be more than 40 years worth of 
storage for enhanced oil and gas recovery, more than 35 years 
worth of storage in unminable coal seams, perhaps 500 to 1,600 
years worth of storage in saline aquifers.
    And North Dakota, as I said, has played a significant role 
here with the Great Plains synthetic fuels plant. I was just 
there a week and a half ago. They strip off 50 percent of the 
CO2 from the facility. They compress it and put it 
in a pipeline, shipping it to the Weyburn oil fields in Canada 
for enhanced recovery. And they are sending about 3 million 
tons a year for that purpose.
    This leads us to the issue of beneficial reuse and the 
primary focus of the hearing. When we talk about beneficial 
reuse, it is important to make a distinction between the 
terrestrial offsets that absorb CO2 from the 
atmosphere and processes that directly capture CO2 
from coal and other fossil-burning plant emissions and convert 
it into usable products.
    Well, algae biofuels are an example, I think, of beneficial 
reuse. They have a chart, I think, that shows algae tanks. 
Algae are the fastest-growing plants in the world. They can 
double their bulk in very short period of time. They can grow 
in wastewater and convert CO2 into a liquid fuel 
that is compatible with our existing fuel structure.
    This is an algae tank chart. We had stopped research on 
algae for about 15 years, I believe. And we began in the 
subcommittee to start that research once again. The 
circumstance in this case should be to take a product, such as 
CO2, and turn it into a usable product.




    We have a project that I looked at in Arizona, where they 
are taking the CO2 from the flue gas and growing 
algae and then harvesting the algae for diesel fuel. Well, that 
is a beneficial use.
    There are other projects that have been described to me, 
including patents that would turn CO2 into a 
product, one product similar to concrete. Harder than concrete, 
they say, with significant value. A beneficial use because that 
would capture all of the CO2.
    Another company came to me and described a process by which 
they create chemically I believe it is nitrogen, hydrogen, and 
baking soda. And the equivalent of baking soda contains all the 
CO2.
    There are a lot of interesting ideas out there. My hope is 
that the funding that we are making available will allow us to 
scale up a range of these ideas to find out what works at 
scale? What is the silver bullet, if there is one? And let the 
free market then beat a path to their door to say you have 
demonstrated something that we are very interested in and want 
to do.
    This chart, by the way, shows that some folks came to my 
office with a plate of cookies and said this comes from coal, 
cookies from coal. But, in fact, it was a description of 
storing CO2 in what is commonly called baking soda.




    So beneficial use of CO2. What are the ideas out 
there? What might or might not be the case? What will we find? 
Will science and technology and research unlock the mystery of 
how to do this at scale and in a way that perhaps reduces the 
price of carbon that is limited by legislation, reduces that 
price to near zero? Who knows?
    And so, we will hear from four witnesses today.
    Senator Tester?


                    statement of senator jon tester


    Senator Tester. Thank you, Mr. Chairman.
    Only in America could you make cookies out of coal.
    Senator Dorgan. That is right. It is good.
    Senator Tester. I don't want to repeat what you said, but I 
fully agree with the fact that we are going to be burning coal 
for a long, long time. Montana happens to be America's version 
of the Saudi Arabia of coal, and we need to figure out ways to 
deal with the CO2 issue. I think everybody 
understands that.
    I guess the only thing I will ask of you guys, and the 
chairman alluded to it, is how close are we to 
commercialization on each one of the things that you are going 
to talk about? I think that is really what is critically 
important as we try to address the CO2 issue.
    And as I get people from the State of Montana coming into 
my office every day saying, ``We can't do this. We can't deal 
with the CO2 issue. We have got to keep doing 
business in the same way.'' What that tells me is that there 
are not a lot of known options out there, and we need to make 
them known, the options that are real.
    So, with that, thank you, Mr. Chairman. And I look forward 
to the hearing.
    Senator Dorgan. Senator Tester, thank you very much.
    As you say, Montana has a lot of coal. So does North 
Dakota. And as I have indicated before, I don't think we are 
going to see a future without coal. I think we are going to see 
a future in which we use coal differently, and that is 
decarbonizing the use of coal. The question is can we do that 
in a manner that provides benefits, or is it just a liability 
to try to do that?
    So we have witnesses today that come from a variety of 
areas. Mr. Scott Klara is the National Energy Technology 
Laboratory at the U.S. Department of Energy. Mr. Klara, 
welcome.
    Mr. Jeff Muhs, executive director of the Center for 
Biofuels, USU Energy Laboratory at Utah State University. He 
will be talking about algae fuels.
    Dr. Brent Constantz, chief executive officer of Calera 
Corporation, will be talking about mineralization and some 
other issues.
    And Ms. Marjorie Tatro the director of fuel and water 
systems at Sandia National Laboratories in Albuquerque, New 
Mexico is here.
    Let me thank all of you for being here. We are going to 
have a hearing that is a bit shorter this morning because the 
Energy Department is beginning the markup of the energy bill, 
and I am a member of that committee and will have to be there 
in a while. But I am really appreciative of all of you coming.
    Mr. Klara, why don't you proceed? And let me state that the 
entire statements that you have will be made a part of the 
permanent record, and you may summarize.
    Mr. Klara.
STATEMENT OF SCOTT M. KLARA, DIRECTOR, STRATEGIC CENTER 
            FOR COAL, NATIONAL ENERGY TECHNOLOGY 
            CENTER, DEPARTMENT OF ENERGY
    Mr. Klara. Thank you.
    Mr. Chairman and members of the subcommittee, I appreciate 
this opportunity to provide testimony on behalf of the U.S. 
Department of Energy's carbon capture and storage research, 
with particular emphasis today on CO2 reuse.
    The Department has supported research on CO2 
reuse for more than a decade. When the sequestration program 
was initiated in the mid-1990s, it was recognized that 
technologies such as mineralization, chemical conversion to 
useful products, algae production, enhanced oil recovery, and 
enhanced coalbed methane recovery could play an important role 
in mitigating greenhouse gases.
    Although the CO2 reduction potential of these 
approaches is limited, due to factors such as cost and market 
saturation of saleable byproducts, these approaches are logical 
first-entry candidates for greenhouse gas mitigation due to 
their ability to produce revenue from the use of CO2 
to offset costs.
    Enhanced oil recovery and enhanced coalbed methane recovery 
represent attractive beneficial reuse options of CO2 
that produce oil and natural gas while permanently storing the 
CO2 in geologic formations. Current research 
activities in these areas now focus on developing reservoir 
management strategies to increase oil and gas production while 
maximizing CO2 storage, ultimately leading to best 
practices and protocols for using these approaches as a carbon 
mitigation option.
    Chemical conversion methods represent another approach that 
can be used for CO2 reuse. CO2 can 
provide the carbon source for many chemical reactions that 
range from simply producing mineral carbonates to serving as 
chemical building blocks to make chemicals such as methanol and 
urea and, ultimately, making other organic products such as 
plastics, composite materials, and rubber, which have useful 
applications and represent long-term storage.
    The key hurdle to these opportunities as potential 
CO2 mitigation approaches relates primarily to cost 
and volume. CO2 is a stable molecule. Hence, 
chemical conversion to these useful end products often requires 
expensive processes with high temperature and high pressure 
that are typically not competitive with conventional methods.
    Also, these potential applications are likely to utilize 
relatively small volumes of CO2 compared to the 
large volumes produced from power plants. However, even with 
that, chemical conversion approaches could still offer 
beneficial early market opportunities that provide a smoother 
transition to geologic sequestration.
    As the Senator stated, biological capture of carbon dioxide 
through algae cultivation is another CO2 reuse 
option that is gaining attention. Algae, the fastest-growing 
plants on Earth, can double their size as frequently as every 2 
hours while consuming carbon dioxide.
    Algae can be grown in regions with desert climate so as not 
to compete with farmlands and forests, and they do not require 
fresh water to grow. They can often grow in brackish, salty 
water.
    Algae has the desirable feature of having a considerably 
high oil content with yields of oil that are orders of 
magnitude higher than those of traditional plant materials that 
could be used to produce biofuels such as ethanol and 
biodiesel.
    While it is recognized that the greenhouse gases stored by 
the algae will ultimately be released to the atmosphere, there 
is a net carbon offset by more effectively utilizing the carbon 
contained in the coal. The coal is used to produce power and 
then again for algae production. Hence, a net carbon offset is 
realized by an increase in the energy extracted from the coal 
when compared to using that same coal for just power generation 
only.
    In conclusion, advanced CCS technology will undoubtedly 
play a key role in mitigating CO2 emissions under 
potential future carbon constraint scenarios. CO2 
reuse technologies with saleable byproducts are logical first-
entry market candidates for greenhouse gas mitigation due to 
their ability to produce revenue from the use of the 
CO2.
    These options will likely provide a technology bridge and 
smoother transition to the deployment of large-scale geologic 
sequestration that ultimately will be needed to stabilize 
greenhouse gases. The Department's research programs are 
critical to ensure the availability of all these enabling 
technologies.


                           PREPARED STATEMENT


    I applaud the efforts of this subcommittee and the members 
for taking a leadership role on these significant issues. And 
this completes my statement, and I would be happy to entertain 
questions at the appropriate time.
    Thank you.
    [The statement follows:]

                  Prepared Statement of Scott M. Klara

    Thank you, Mr. Chairman and members of the subcommittee. I 
appreciate this opportunity to provide testimony on the United States 
Department of Energy's (DOE's) research efforts in carbon capture and 
storage (CCS), with a particular focus on carbon dioxide 
(CO2) reuse technologies.

                              INTRODUCTION

    Fossil fuel resources represent a tremendous national asset. An 
abundance of fossil fuels in North America has contributed to our 
Nation's economic prosperity. Based upon current rates of consumption, 
the United States has approximately a 250-year supply of coal. Making 
use of this domestic asset in a responsible manner will help the United 
States to meet its energy requirements, minimize detrimental 
environmental impacts, positively contribute to national energy and 
economic security, and compete in the global marketplace.
    Fossil fuels will play an important role in our Nation's future 
energy strategy throughout the remainder of this century. A key 
challenge to the continued use of fossil fuels, especially coal, will 
be our ability to reduce greenhouse gas emissions from fossil fuel 
processes. By developing technologies to mitigate the release of 
CO2 into the atmosphere, we can continue to use our 
extensive domestic coal resource, while reducing the potential impacts 
on climate change. CCS can play a central role in fossil fuels 
remaining a viable energy source for our Nation. CCS is the primary 
pathway DOE is pursuing to allow continued use of fossil fuels in a 
carbon-constrained future.

                 COAL RESEARCH AND DEVELOPMENT PROGRAM

    The coal research and development program--administered by DOE's 
Office of Fossil Energy and implemented by the National Energy 
Technology Laboratory--is designed to address environmental concerns 
over the future use of coal by developing a portfolio of revolutionary 
CCS technologies. In partnership with the private sector, efforts are 
focused on maximizing efficiency and environmental performance, while 
minimizing the costs of these new technologies.
    In recent years, the program has been restructured to focus the 
urgent need on CCS technologies. The program is focused on two major 
strategies:
  --Capturing and long-term storing greenhouse gases; and
  --Substantially improving the efficiency of fossil energy systems.
    The first strategy will reduce emissions of CO2 from 
fossil energy systems. The second strategy will improve the fuel-to-
energy efficiencies of fossil-fueled plants, thus reducing pollutant 
emissions, water usage, and carbon emissions on a per unit of energy 
basis. The improved efficiency strategy also provides a positive 
efficiency impact to partially offset the efficiency penalty incurred 
when CCS is added to a plant. Collectively, these two strategies 
comprise the coal research and development program's approach to 
develop technologies that will help current and future fossil energy 
plants meet requirements for a safe and secure energy future.
    Coal research has resulted in important developments and insights 
regarding future technology innovations. New engineering concepts have 
been developed to convert coal into gases that can be cleaned and then 
used to generate power or produce fuels. New approaches to low-emission 
power generation are emerging that hold promise for integration with 
coal-based or combined coal-and-biomass energy plants. Technologies for 
achieving CCS are stretching beyond basic research, defining pathways 
in which greenhouse gas emissions can be permanently diverted from the 
atmosphere. With these building blocks, a new breed of coal plant can 
be created--one that generates power and produces high-value energy 
with dramatically reduced environmental impact. The Department's 
activities are focused on high-priority CCS enabling technologies, such 
as advanced integrated gasification combined cycle, advanced hydrogen 
turbines, carbon capture and storage, coal-to-hydrogen conversion, and 
fuel cells. These research areas provide the supporting technology base 
for all CCS development.

                       CARBON CAPTURE AND STORAGE

    The coal research and development program is addressing the key 
technology challenges that confront the wide-scale deployment of CCS 
through research on cost-effective capture technologies; measuring, 
monitoring, verification, and accounting technologies to ensure 
permanent storage; permitting issues; liability issues; public 
outreach; and infrastructure needs. As an example, it is estimated that 
today's commercially available CCS technologies would add around 80 
percent to the cost of electricity for a new pulverized coal plant, and 
around 35 percent to the cost of electricity for a new advanced 
gasification-based plant.\1\ The program is aggressively pursuing 
developments to reduce these costs to less than a 10 percent increase 
in the cost of electricity for new gasification-based energy plants, 
and less than a 35 percent increase in the cost of electricity for 
pulverized coal energy plants.
---------------------------------------------------------------------------
    \1\ Cost and Performance Baseline for Fossil Energy Plants, Volume 
1: Bituminous Coal and Natural Gas to Electricity, U.S. Department of 
Energy/National Energy Technology Laboratory, DOE/NETL-2007/128 1, 
Final Report, May 2007.
---------------------------------------------------------------------------
    The coal research and development program has been performing CCS 
field tests for many years. For example, the Regional Carbon 
Sequestration Partnerships are drilling wells in potential storage 
locations and injecting small quantities of CO2 to validate 
the potential of key storage locations throughout the country, as well 
as conducting large-scale carbon sequestration field tests. Geologic 
sequestration projects at key locations across the country are being 
pursued. Substantial progress has occurred in the area of monitoring, 
verification, and accounting with the development and refinement of 
technologies to better understand storage stability, permanence, and 
the characteristics of CO2 migration.
    Research is also focused on developing technology options that 
lower the cost of capturing CO2 from fossil fuel energy 
plants. This research can be categorized into three pathways: post-
combustion, pre-combustion, and oxy-combustion. Post-combustion refers 
to capturing CO2 from the flue gas after a fuel has been 
combusted in air. Pre-combustion is a process where a hydrocarbon fuel 
is gasified to form a synthetic mixture of hydrogen and CO2, 
and the CO2 is captured from the synthesis gas before it is 
combusted. Oxy-combustion is where hydrocarbon fuel is combusted in 
pure or nearly pure oxygen rather than air to produce a mixture of 
CO2 and water that can easily be separated to produce 
relatively pure CO2. This research includes a wide range of 
approaches: membranes, oxy-combustion concepts, solid sorbents, 
CO2 clathrates, and advanced gas/liquid scrubbing 
technologies. These efforts will produce meaningful improvements to 
state-of-the-art technologies and seek to develop revolutionary 
concepts, such as metal organic frameworks, ionic liquids, and enzyme-
based systems.
    A center piece of the program is DOE's field test program, carried 
out by the Regional Carbon Sequestration Partnerships. Each Partnership 
comprises State agencies, universities, and private companies, which 
are a ``capacity building'' enterprise with the goal of developing the 
knowledge base and infrastructure needed to support the wide-scale 
deployment of CCS technologies. Each Partnership is focused on a 
separate and specific region of the country with similar 
characteristics relating to CCS opportunities.
    Collectively, the seven Regional Partnerships represent more than 
350 unique organizations in 42 States, three Native American 
Organizations, and four Canadian Provinces. Collectively, these 
Partnerships constitute a significant national asset in that they 
represent regions encompassing 97 percent of coal-fired CO2 
emissions, 97 percent of industrial CO2 emissions, 96 
percent of the total land mass, and essentially all the geologic 
storage sites in the country that can potentially be available for 
carbon sequestration. The non-Federal cost share in the efforts being 
pursued by the Partnerships is greater than 35 percent, which is a key 
indicator of industry and technology vendor involvement that will help 
to ensure that developments are ultimately deployed. Together, the 
seven Partnerships form a network of capability, knowledge, and 
infrastructure to enable carbon sequestration technology to play a 
major role in a national strategy to mitigate CO2 emissions.
    Over the course of these CCS activities, DOE will develop Best 
Practice Manuals on topics such as site characterization, site 
construction, operations, monitoring, mitigation, closure, and long-
term stewardship. These Manuals will serve as guidelines for a future 
CCS industry, and help transfer the lessons learned from the 
Department's program to current and future stakeholders.

                   CO2 RE-USE TECHNOLOGIES

    The coal research and development program has supported research on 
CO2 re-use technologies for more than a decade. When the 
Sequestration Program was initiated in the mid-1990s, it was recognized 
that technologies such as mineralization, chemical conversion to useful 
products, algae production, enhanced oil recovery (EOR) and enhanced 
coalbed methane recovery (ECBMR) could play an important role in 
mitigating CO2 emissions. Although the CO2 
reduction potential of these approaches is limited, due to factors such 
as cost and market saturation of salable byproducts, these approaches 
are logical ``first-market entry'' candidates for greenhouse gas 
mitigation, due to their ability to produce revenue from use of the 
CO2 that could be used to offset the costs for these ``early 
adopters.'' Hence, these options provide a technology bridge and 
smoother transition to the deployment of the large-scale, stand-alone 
geologic sequestration operations that will ultimately be needed to 
achieve the much larger reductions that would be required to approach 
stabilizing greenhouse gas concentrations in the atmosphere.
    EOR and ECBMR represent attractive beneficial re-use options for 
CO2 that produce oil and natural gas while permanently 
storing the CO2 in these geologic formations.
    The Department has recognized the importance of CO2 EOR 
for more than 40 years. As early as the 1970s, DOE-funded projects were 
developing concepts to improve the effectiveness and applicability of 
CO2 EOR. DOE also has a long history in conducting research 
on the benefits of unconventional gas recovery with technologies such 
as coalbed methane recovery. Due in part to research conducted by DOE, 
coalbed methane production has increased for each of the last 15 years 
due to advances in production methods and now accounts for roughly 8 
percent of the United States' natural gas production.
    More recently, the Department has been studying the technologies 
needed to ensure permanence of CO2 storage in ``enhanced'' 
coal bed methane recovery, where natural gas production is ``enhanced'' 
by injecting CO2. The CO2 displaces the methane 
on the coal surface and the CO2 remains stored in the 
formation. Relative to CO2 storage, current research 
activities in EOR and ECBMR now focus on developing reservoir 
management strategies to maximize and ensure permanence of 
CO2 storage, while increasing oil/gas production; along with 
the development of technologies for measuring, monitoring, 
verification, and accounting that will validate permanent 
CO2 storage in these applications while providing best 
practices and protocols for using these approaches as a carbon 
mitigation option.
    Chemical conversion methods represent another technology approach 
that can be used for CO2 re-use. CO2 can provide 
the carbon source for many chemical reactions that range from producing 
mineral carbonates, to serving as chemical building blocks to make 
chemicals like methanol and urea, and ultimately making other organic 
chemicals, plastics, or composite materials that could have useful 
applications and represent long-term storage opportunities. Some 
industries that currently use relatively small quantities of 
CO2 in their operations include metals; manufacturing and 
construction; chemicals, pharmaceuticals, and petroleum; rubber and 
plastics; and the food and beverage industries. Also, most of the 
baking soda (sodium bicarbonate) produced in the United States is 
manufactured by reacting soda ash with CO2 and water.
    The key hurdles to these new opportunities as potential 
CO2 mitigation approaches relate primarily to cost and 
volume. CO2 is a stable molecule; hence, chemical conversion 
to useful end products often requires expensive processes (high 
temperature and/or high pressure) that are not competitive with 
conventional manufacturing methods. These applications are also likely 
to utilize relatively small volumes of CO2, as compared to 
the large volumes produced from powerplants.
    The Department had previously supported a working group for several 
years that consisted of several Universities and National Laboratories 
working on the science and economics of speeding the reaction of carbon 
mineralization as a potential option to permanently sequester 
CO2. Carbonation reactions were investigated that combined 
CO2 with alkaline earth elements (predominantly magnesium, 
but also calcium and other elements) derived from silicates to yield 
thermodynamically stable solid mineral carbonates--essentially, rocks. 
The team focused on conducting laboratory experiments and modeling the 
complex chemical reactions associated with this process. It was 
ultimately concluded that the process could not be cost effective as a 
CO2 capture mechanism, and that numerous mining and storage 
issues also existed as key barriers. However, the knowledge-base gained 
from these efforts is proving valuable in pursuing applications where 
mineralization can be used to produce salable byproducts that might 
make this concept practical for a limited set of applications.
    In the past few years, DOE has refocused research efforts on using 
mineralization chemistry as a possible means of ``solidifying'' 
CO2 after it is stored in a geologic formation, thereby, 
ensuring permanent storage. A category of geologic formations called 
``Basalts'' have emerged as leading candidates where this approach may 
someday have merit. Basalts are silica-rich volcanic rock that contains 
key minerals--such as calcium and magnesium--that can combine with 
CO2 to form carbonates.
    The Department is supporting the Big Sky Regional Carbon 
Sequestration Partnerships and Pacific Northwest National Laboratory in 
conducting research focused on enhancing the mineralization process in 
these formations. The Big Sky Partnership is conducting small-scale 
CO2 injection in the Columbia River flood Basalts, with the 
goal of confirming feasibility of safe permanent storage in these 
formations. Successful research in Basalts could expand the viable 
geologic options for CO2 sequestration in the continental 
United States, and provide unexplored options for CO2 
sequestration in developing countries that have extensive Basalt 
formations, such as India.
    Biological capture of CO2 through algae cultivation is 
another CO2 re-use option that is gaining attention as a 
possible means to achieve reductions in CO2 emissions from 
fossil-fuel processes. Algae, the fastest growing plants on earth, can 
double their size as frequently as every 2 hours while consuming 
CO2. Algae can be grown in non-arable regions, such as 
deserts, so as not to compete with farmland and forests, and they do 
not require fresh water to grow. Algae will grow in brackish water, 
plant-recycle water, or even in sewage streams, and, when cultivated 
within closed systems, these waters can be recycled, thereby minimizing 
further water use. Algae has the desirable feature of having a 
considerably high oil content, with yields of oil per acre that are 
orders of magnitude higher than those of traditional plant materials 
used to produce biofuels, such as ethanol or biodiesel. The oils in 
algae can be extracted and converted to liquid transportation fuel. 
While it is recognized that the CO2 stored by the algae will 
ultimately be released to the atmosphere, there is a net-CO2 
emission decrease because the CO2 released from coal 
combustion for algal growth reduces demand for petroleum without 
increasing coal consumption The coal is used to produce power and then 
again for algae production, hence, a net-carbon offset is realized by 
an increase in the energy extracted from the coal, compared to that 
same coal being used for power generation only.
    A cost-effective, large-scale production system for growing algae 
using CO2 from a powerplant has not yet been demonstrated. 
DOE is sponsoring a project with Arizona Public Service (APS) to 
develop and ultimately demonstrate a large-scale algae system coupled 
with a powerplant. APS is examining the use of coal gasification for 
the production of substitute natural gas. The utilization of algae for 
carbon management and recycle is an integral part of the project. The 
project has already proven the process at a small scale using a one-
third acre algae bioreactor that has been operating for weeks using 
powerplant stack emissions to produce sustained algae growth. 
Additionally, a prototype algae cultivation system is being evaluated 
for continuous operation. The project will ultimately assemble a fully 
integrated energy system for beneficial CO2 use, including 
an algae farm of sufficient size to adequately evaluate effectiveness 
and costs for commercial applications. To complement the engineered 
system in Arizona, DOE has solicited Small Business Innovation Research 
proposals to explore novel and efficient concepts for several 
processing aspects of CO2 capture for algae growth. Projects 
are addressing novel approaches for extracting oil from algae, and for 
converting algae oil to transportation fuel, focusing on technology 
consideration for integration with power or syngas production so as not 
to duplicate biofuels work being conducted by DOE's Office of Energy 
Efficiency and Renewable Energy. The results from these efforts should 
prove useful to future algae farming applications at power and synfuel 
plants.

               THE AMERICAN RECOVERY AND REINVESTMENT ACT

    The American Recovery and Reinvestment Act (Recovery Act) 
appropriated $3.4 billion for the Fossil Energy Research and 
Development (FER&D) Program. As reflected in the Joint Explanatory 
Statement of the Committee of Conference leading to the act, these 
Recovery Act funds will support activities targeted at expanding and 
accelerating the commercial deployment of CCS technology, thus 
providing a key thrust to the FER&D Program to accelerate, by many 
years, the advances needed for future plants with CCS. Although 
specific details are still being worked on by DOE, CO2 re-
use technologies will be addressed in the following activities of the 
Recovery Act.
    New CCS Initiative for Industrial Applications.--$1.52 billion is 
to be used for a competitive solicitation for a range of industrial 
carbon capture and energy efficiency improvement projects, including 
innovative concepts for beneficial CO2 re-use.

                              CONCLUSIONS

    Today, nearly three out of every four coal-burning powerplants in 
this country are equipped with technologies that can trace their roots 
back to DOE's advanced coal technology program. These efforts helped 
accelerate production of cost-effective compliance options to address 
legacy environmental issues associated with coal use. Advanced CCS 
technologies will undoubtedly play a key role in mitigating 
CO2 emissions under potential, future carbon stabilization 
scenarios. CO2 re-use technologies with salable byproducts 
are logical ``first market entry'' candidates for greenhouse gas 
mitigation due to their ability to produce revenue from the use of 
CO2. These re-use technologies, along with large-scale 
geologic sequestration, will contribute to the suite of options for 
reduction of anthropogenic CO2 emissions.
    DOE's research programs are helping develop these enabling 
technologies. The United States must continue to show leadership in 
technology development and future deployment to bring economic rewards 
and new business opportunities both here and abroad.
    I applaud the efforts of this subcommittee and its members for 
taking a leadership role in addressing these timely and significant 
issues.

    Senator Dorgan. Mr. Klara, thank you very much.
    Next, we will go to Mr. Jeff Muhs, who is with Utah State 
University, executive director of the Center for Biofuels at 
USU's Energy Laboratory.
    Mr. Muhs, welcome.

STATEMENT OF JEFF D. MUHS, EXECUTIVE DIRECTOR, CENTER 
            FOR BIOFUELS, USU ENERGY LABORATORY, UTAH 
            STATE UNIVERSITY
    Mr. Muhs. Thank you, Mr. Chairman and members of the 
subcommittee.
    It is a pleasure to speak to you today on the beneficial 
reuse of carbon dioxide. I will be summarizing findings from a 
report that Utah State University is jointly issuing with a 
number of other entities on the opportunities, challenges, and 
research to each of our algae biofuels, particularly 
emphasizing systems design for carbon recycling from point 
source CO2 emitters.
    America faces five interdependent challenges that threaten 
our prosperity and quality of life--energy price spikes, 
climate change, depletion of natural resources, high food 
prices, and an addiction to foreign oil. Although there is no 
single answer, algae energy systems represent a possible 
partial solution to all five of these challenges.
    Growing algae, the most productive of all photosynthetic 
life on Earth, and converting it into fuels could help mitigate 
carbon emissions, reduce oil imports and price shocks, reclaim 
wastewater, and lower food prices. Fundamentally, algae use 
solar energy and nutrients to transform CO2 into 
organic matter. Due to their simple biological structure, they 
capture carbon more rapidly than terrestrial plants and store 
it in a form that can be processed into fuel such as biodiesel.
    Some algae strains are capable of doubling their mass 
several times a day, and unlike terrestrial plants, algae can 
be cultivated on marginal desert land and using saline, 
brackish, or wastewater. Since some species have a high 
affinity for CO2, siting these algae systems near 
point source CO2 emitters is a very attractive 
option. Research has demonstrated that the yields can be 
dramatically improved by enhanced concentrations of 
CO2.
    Because of its high lipid or oil content and growth rate, 
algae can produce between 10 and 50 times more biodiesel per 
acre than, for example, soybeans. To compare the two 
feedstocks, if all the soybeans harvested in the United States 
were converted into biodiesel, the resulting fuel supply would 
accommodate less than 10 percent of our annual diesel fuel 
needs.
    Conversely, if an area roughly the size of one-tenth of 
North Dakota or Utah were to be converted into algae systems, 
it could provide all of our diesel fuel needs. So because of 
that enhanced yield opportunity, there is a big opportunity.
    The fundamentals of algae energy systems are sound. As a 
recent article in National Geographic noted, there is no magic 
bullet fuel crop that can solve our energy woes without harming 
the environment says virtually every scientist studying the 
issue, but most say that algae comes closer than any other 
plant.
    But many challenges lie ahead, and our analysis indicates 
that the overall lifecycle cost of algae energy systems must be 
reduced by at least a factor of two and probably much more. 
Unlike traditional crops, the technology needed to grow and 
harvest algae using industrial or agricultural processes is 
still pre-commercial. In the field of plant biology, algae is 
one of the least explored fields.
    Recycling carbon is a new concept, and there are challenges 
related to separating, compressing, and delivering 
CO2 into these algae cultivation systems. To 
cultivate algae in open ponds, land and water, which must be 
replenished because of evaporative losses, are required. Energy 
is needed to keep the algae stable, healthy, and growing. 
Invasive species, which can kill algae, must be controlled.
    In enclosed growth systems, capital costs for equipment 
used to enclose, mix, and maintain cultures must be reduced. In 
both scenarios, surface shading limits the amount of sunlight 
that can be used constructively to produce biomass.
    After cultivation, algae must be dewatered and dried prior 
to oil extraction and fuel production, and each step along the 
way, energy and other resources are required. But by harnessing 
the same biology, chemistry, and genetics that led to the 
doubling of yields in traditional crops, we should be able to 
do the same with algae. And advances in optics, mechanical 
engineering, and other disciplines are leading to scalable 
cultivation systems that better utilize sunlight and have the 
potential to meet cost targets.
    Indeed, algae has the unique potential to produce renewable 
fuels and recycle carbon sustainably without interfering with 
food supplies. To succeed, however, private and public 
cooperation is critical. Without it, the algae industry will 
struggle to reduce cost and integrate subsystems. Without 
regulations limiting carbon emissions, utilities and, in 
particular, small CO2 emitters will have little 
motivation to explore these reuse options.
    Therefore, a robust and well-integrated RD&D program will 
only occur with Government involvement, both in sponsorship of 
research and development and enactment of policies in future 
energy and climate change legislation that help to accelerate 
commercial deployment.
    We recommend that Congress authorize and appropriate funds 
for an algae-related RD&D program at the Department of Energy. 
It should include research on lifecycle analysis, leverage 
strengths of existing Department programs, and be coordinated 
at a systems level. It should take advantage of new program to 
management tools and include a portfolio of activities from 
foundational research to integrated demonstration.

                           PREPARED STATEMENT

    And deployment projects should demonstrate the viability of 
technologies at a scale large enough to overcome infrastructure 
challenges and include regional partnerships similar to the 
Department's programs in geologic sequestration.
    Thank you very much.
    [The statement follows:]

                   Prepared Statement of Jeff D. Muhs

    Chairman Dorgan, Ranking Member Bennett and other members of the 
subcommittee, it is a pleasure to speak to you today on the subject of 
beneficial reuse of carbon dioxide. I will be summarizing findings from 
a report Utah State University is jointly issuing with a number of 
other entities on opportunities, challenges, and research needs for 
algae biofuel production--emphasizing systems designed for carbon 
recycling from point-source CO2 emitters.
    America faces five interdependent challenges that threaten our 
prosperity and quality of life:
  --energy price spikes;
  --climate change;
  --depletion of natural resources;
  --high food prices; and
  --an addiction to foreign oil
    Although there is no single answer, algae energy systems represent 
a possible partial solution to all five challenges. Growing algae, the 
most productive of all photosynthetic life on earth, and converting it 
into fuels could help mitigate carbon emissions, reduce oil imports and 
price shocks, reclaim wastewater, and lower food prices.
    Fundamentally, algae use solar energy and nutrients to transform 
CO2 into organic material. Due to their simple biological 
structure, they capture carbon more rapidly than terrestrial plants and 
store it in a form that can be processed into fuels such as biodiesel. 
Some algal strains are capable of doubling their mass several times a 
day, and unlike terrestrial plants, algae can be cultivated on marginal 
or desert land using saltwater, brackish-water, or wastewater. Since 
some species have a high affinity for CO2, siting algae 
energy systems near point-source CO2 emitters is an 
attractive option. Research has demonstrated that algal yields can be 
improved dramatically using enhanced concentrations of CO2.
    Because of its high lipid (or oil) content and growth rate, algae 
can produce 10 to 50 times more biodiesel per acre than, for example, 
soybeans. To compare the two feedstocks, if all the soybeans harvested 
in the United States were converted into biodiesel, the resultant fuel 
supply would accommodate less than 10 percent of our annual diesel fuel 
needs. Conversely, if an area roughly equating to one-tenth the area of 
either North Dakota or Utah were developed into algae energy systems, 
it would supply all of America's diesel fuel needs.
    There is growing consensus that the fundamentals of algae energy 
systems are sound. As a recent article in National Geographic noted: 
``there is no magic bullet fuel crop that can solve our energy woes 
without harming the environment, says virtually every scientist 
studying the issue. But most say that algae . . . comes closer than any 
other plant.''
    But many challenges lie ahead and our analysis indicates that the 
overall lifecycle cost of algae energy systems must be reduced by at 
least a factor of two and probably more.
    Unlike traditional crops, the technology needed to grow and harvest 
algae using industrial or agricultural processes is in its infancy. In 
the field of plant biotechnology, algae is one of the least explored 
areas. Recycling carbon is a new concept and there are challenges 
related to separating, compressing, and delivering CO2 into 
algae cultivation systems.
    To cultivate algae in open ponds, land and water (which must be 
replenished because of evaporative losses) are required. Energy is 
needed to keep algae cultures stable, healthy and growing. Invasive 
species, which can kill oil-rich algae, must be controlled. In enclosed 
growth systems, capital costs for equipment used to enclose, mix, and 
maintain cultures must fall. In both scenarios, surface shading limits 
the amount of sunlight that can be used constructively to produce 
biomass. After cultivation, algae must be dewatered and dried prior to 
oil extraction and fuel production. In each step along the way, energy 
and other resources are required.
    But by harnessing the same biology, chemistry, and genetics that 
led to a doubling of yields in traditional crops, we should be able to 
do the same with algae. And advances in optics, mechanical engineering, 
and other disciplines are leading to scalable cultivation systems that 
better utilize sunlight and have the potential to reach cost targets.
    Algae has the unique potential to produce renewable fuels and 
recycle carbon sustainably and without interfering with food supplies. 
To succeed, however, private and public cooperation is critical. 
Without it, the algae industry will struggle to reduce costs and 
integrate subsystems. Without regulations limiting carbon emissions, 
utilities, and in particular, small CO2 emitters will have 
little motivation to explore reuse options.
    Therefore, a robust and well-integrated RD&D program will only 
occur with Government involvement both in sponsorship of R&D and 
enactment of policies in future energy and climate change legislation 
that accelerate commercial deployment.
    We recommend that Congress authorize and appropriate funds for an 
algae-related RD&D program at the Department of Energy. It should 
include research on lifecycle analyses, leverage strengths of existing 
Department programs, and be coordinated from a Department-wide 
perspective. The program should take advantage of new program 
management tools and include a portfolio of activities ranging from 
foundational research to integrated demonstrations. Deployment projects 
should demonstrate the viability of technologies at a scale large 
enough to overcome infrastructure challenges and include regional 
partnerships similar to the Department's programs for geologic 
sequestration.
    Thank you. I look forward to answering any questions.

    Senator Dorgan. Mr. Muhs, thank you very much. We 
appreciate your testimony.
    Next, we are going to hear from Dr. Brent Constantz, chief 
executive officer and founder of Calera. And from his 
biography, specializes in high-performance and novel cements. 
Is that the case, Mr. Constantz?
    Dr. Constantz. Yes.
    Senator Dorgan. And is the inventor on over 60 issued U.S. 
patents on the subject.
    You may proceed. Thank you for being with us.

STATEMENT OF BRENT R. CONSTANTZ, Ph.D., CHIEF EXECUTIVE 
            OFFICER, CALERA CORPORATION
    Dr. Constantz. Thanks. We really admire the Senate's vision 
in appreciating the beneficial reuse of CO2 and 
turning it into a profit center for a CO2 emitter 
instead of a huge liability for them.
    Just looking at the mass balance of carbon on Earth, if we 
look at the Kyoto Protocol, we are calling for 5 billion tons 
of mitigation. And to put that in perspective, powerplants and 
cement plants put out about 11 billion tons of CO2 a 
year into the Earth's atmosphere.
    We could put 16 billion tons of CO2 a year into 
cement and aggregate. So we could more than triple the Kyoto 
requirement putting CO2 into cement and aggregate.
    Calera has developed breakthrough technology that allows us 
to handle the flue gas streams such as from coal, which are 
only about 15 percent CO2, which is a major 
challenge. Otherwise, it needs to be separated via very 
expensive techniques. It can also be taken from natural gas in 
cement plants, which are also dilute streams of CO2, 
unlike what has been used in EOR.
    This technology also has multi-pollutant control features, 
especially with SO2 and NO as well as mercury and 
other toxics. The absorption technology is an absolute 
breakthrough and has allowed us to have very high absorption of 
the raw flue gas with no separation step.
    We have developed a revolutionary low-voltage base 
technology, which allows us to produce base at one-fifth the 
voltage of traditional base generation and have accelerated 
mineral dissolution technologies to produce. Then we utilize 
the waste heat from the power plant to dry the powders to make 
cement.
    Our chief operating officer joined us from NRG, the largest 
nonregulated power company, where he held the same role. Our 
head of emissions came from 30 years' experience with General 
Electric. His Ph.D. was on the burning of coal. Our head of 
process technology came from Exxon, where he spent 20 years 
building their process plants.
    We are producing green building materials. Our first 
product, which we launched already, is a replacement for 
portland cement, a supplementary cementitious material that has 
been tested against ASTM C1157, and we have a 15,000 square 
foot lab where we do concrete and cement testing. It was 
launched at the World of Concrete, which is an 80,000-person 
convention. It has been well addressed by the entire portland 
cement industry and the ready-mixed industry as well as the 
asphalt industry.
    In addition, we are producing aggregate. I have an example 
of the aggregate. At Stanford, I teach carbonate sedimentology. 
And if I were to put this piece of aggregate on my final exam, 
unless they had a microscope, none of the students could tell 
you that this wasn't natural limestone, which is what two-
thirds of all natural aggregates are.
    These mix designs are carbon negative. So they are not just 
carbon neutral, but we are actually sequestering CO2 
from the powerplant into the solid material. And we can 
sequester, as I said, 16 billion tons of CO2 a year 
this way on an ongoing basis for centuries to come. This is a 
profitable option, both for a cement plant that has to deal 
with their CO2, as well as a coal plant.
    The aggregates provide the possibility of specialty 
products such as lightweight aggregates, which are very 
important, or aggregate for pervious concrete.
    One byproduct of our process is fresher water because we 
take all of the hardness out of the water to combine with the 
carbonate, and this fresher water can be desalinated via 
reverse osmosis for less than 50 percent the regular energy 
intensivity. So the water aspect of the profit is important. In 
fact, in Moss Landing, where we have 200-acre pilot plant, we 
already have a contract with the local water district to 
produce fresh water in addition to everything else we are 
producing.
    Other revenue sources are the carbon tipping fees and 
allocations where we are working in Victoria, Australia, 
already doing this. We have the ability to use off-peak 
electricity consumption. So this can be done with almost no 
energy footprint.
    And the important point I would like to point out is this 
is the permanent removal of CO2. It is not 
temporary. We convert the CO2 to carbonate. Just 
like the white cliffs of Dover, it is going to stay there for 
millions of years. It is never coming back.
    I would like to urge the Senate to consider leveling the 
playing field because there is currently a monomaniacal focus 
on geologic sequestration in all of the language. We believe a 
more inclusive approach to look at all of the ways of dealing 
with carbon would be better for everybody and focus on the 
outcome of sequestering CO2 as opposed to one 
specific method, which is geologic sequestration.

                           PREPARED STATEMENT

    And I think the United States needs to provide 
international leadership in this area, showing the broad 
variety of solutions for removal of CO2.
    Thank you.
    [The statement follows:]

                Prepared Statement of Brent R. Constantz

                              INTRODUCTION

    Chairman Dorgan and members of the subcommittee, first, I would 
like to thank this subcommittee for their important work in advancing 
solutions to climate change. I would also like to thank you for 
inviting me to testify on a carbon-mitigation sector that I believe 
holds tremendous promise: the conversion of carbon dioxide 
(CO2) to mineral form for beneficial reuse.
    This hearing comes at a critical time: Congress is debating climate 
change legislation; the President has promised a green energy policy 
that helps not hurts our economy; and almost 200 countries are 
preparing for the Copenhagen international climate discussions. As 
these and other political decisions unfold against the backdrop of a 
global economic crisis, we must develop a broad array of cost-effective 
methods to mitigate the release of CO2 into the atmosphere.
    My name is Brent Constantz, and I am the CEO of Calera Corporation, 
based in Los Gatos, California. Over the past 20 years, I have built 
three successful Silicon Valley companies based on innovative 
specialty-cement technologies, covered by approximately 70 issued U.S. 
patents I hold in this area. Additionally, I am a professor at Stanford 
University where my teaching and research are focused on carbonate 
mineral formation and oceanic carbon balance.
    My goal today is to urge Congress to think broadly in terms of the 
carbon capture and sequestration (CCS) technologies it supports, and 
the current budget language that needs to be carefully crafted to take 
full advantage of the opportunities these technologies can offer. 
Additionally, my testimony will give you an overview of our 
CO2-conversion technology; how it is possible to 
beneficially reuse CO2 when it is converted to a mineral 
form; how our technology compares with other CO2-capture 
options; and the commercial potential of beneficial CO2 
reuse.
    Finally, I will conclude with recommendations that not only align 
with this subcommittee's demonstrated commitment to CCS, but also help 
move beneficial CO2-reuse technologies such as Calera's from 
pilot-scale to global innovation, thereby fostering other technologies 
that may be alternative or complementary to CO2 separation 
and geologic sequestration.
    Calera has developed a transformational technology that converts 
CO2 into green building materials. The process captures 
CO2 emissions from power-plant flue gas and cement 
manufacturing, and chemically combines it with a variety of natural 
minerals, water and solid waste materials to produce cementitious 
materials, aggregate and other related building materials. Thus the 
process is more than CO2 sequestration--it represents 
permanent CO2 conversion.
    Calera is backed by Khosla Ventures, a well-regarded venture 
capital firm specializing in ``green'' technology. With Mr. Vinod 
Khosla as a partner in this effort, Calera has been able to engage a 
formidable team of scientists and engineers to move beyond the 
laboratory and bench-scale research. We currently operate a pilot 
facility adjacent to a 1,000 MW powerplant in Moss Landing, California 
that allows us to test our technology with a goal of scaling the 
process up to full production levels. In less than a year Calera has 
grown from 12 to more than 70 employees, including 18 PhDs and senior 
executives with more than 200 years of combined experience in power, 
water and concrete.
    But we have many milestones ahead to reach commercial scale, 
particularly in this difficult economic climate. Government support is 
necessary at this stage of development for demonstration facilities and 
early deployment in commercial plants. Government support, along with 
commercial partner investment will make the financial hurdle of 
financing these first scaled plants possible. Government policies that 
are directed toward mitigating carbon and stimulating the economy by 
the best available approaches will enable substantial progress for the 
profitable, beneficial reuse of CO2.

              LEVEL THE PLAYING FIELD FOR NEW TECHNOLOGIES

    I would like to underscore that CO2 mitigation 
technologies are evolving rapidly. Calera is one of several companies 
focused on CO2 conversion technologies with the potential 
for beneficial reuse. Yet, despite the promise of these technologies, 
carbon mitigation funding has been narrowly focused on CO2 
separation and purification for geologic sequestration. This focus is 
proscriptive to one method, assuring that carbon reduction dollars will 
be directed only towards this method's narrowly defined pool of 
projects in hopes of making geologic CO2-sequestration a 
viable option. This is especially vexing, considering that the Calera 
process and comparable CO2-capture technologies largely 
avoid the economic burden, carbon balance, risk and permitting 
constraints that accompany geologic CO2-sequestration.
    We submit that taxpayer support and funding should be based on 
carbon reduction outcomes and seek to advance the most effective 
technologies. While CO2 separation and purification for 
geologic sequestration is one important potential method in the carbon-
capture toolbox, we need to consider all of the potential solutions to 
address the volume of CO2 at issue. Broad statutory language 
is needed that encourages innovation and rewards breakthrough 
technologies consistent with our goals as a free-market nation. The 
methods we implement should be selected by how we best arrive at the 
desired outcome, and not constrained to any one particular method for 
CO2 mitigation.
    I will come back to the crucial point of how the Federal Government 
can level the playing field for other technologies after providing you 
with an overview of Calera's CO2-conversion technology.
  the calera process--cmap technology and low-voltage base production
    Calera's technology is called Carbonate Mineralization by Aqueous 
Precipitation (CMAP). The Calera process is unique in how it 
essentially mimics the natural carbonate mineralization of corals when 
making their external skeleton. This technology captures CO2 
emissions by converting CO2 to CO3 (carbonate) 
and effectively storing it in a stable mineral form. This mineral can 
then be used to replace or supplement traditional portland cement, 
offsetting emissions that would otherwise result from the 
CO2-intensive manufacture of conventional cement.
    The biggest hurdle to the mineralization concepts studied has been 
high-energy demand or extremely slow rates of reaction occurring over 
geologic timeframes. Calera's CMAP bypasses the limitations of previous 
mineralization approaches, but it has not been broadly pursued in the 
past due to the requirement for sustainable, unlimited chemical-base 
sources. Amongst the many technologies now possible are novel base-
production methods that are low in cost, energy, and carbon footprint. 
These Calera innovations--fully described in USPTO patent 
applications--revolutionize the technical feasibility, carbon-mass 
balance and economics of carbonate mineralization for CO2 
capture and conversion via aqueous mineralization.
    Calera's mineralization process utilizes break-through, low-voltage 
chemical base-production technology that makes the conversion from 
CO2 to carbonate cost-effective and sustainable. Using 
approximately one-fifth the voltage of conventional base-production 
processes, Calera's base production has a very low carbon-footprint and 
is an alternative to natural or waste sources of chemical base. 
Therefore, the process can occur irrespective of any specific site 
location.
    The technology uses aqueous minerals and CO2 from power 
plant flue gas. The CO2 in the flue gas is dissolved in a 
reactor, where it becomes carbonic acid converted to carbonate ions 
that forms a slurry containing the suspended mineral carbonates. A 
solid-liquid separation and dewatering step results in a pumpable 
suspension. Calera employs spray dryers that utilize the heat in the 
flue gas to dry the pumpable suspension. Once dried, the Calera cement 
looks like white chalk and can be blended with rock and other material 
to make concrete. A graphic illustration of this process is attached.






    Once it is hydrated, Calera's carbonate mineral cement behaves like 
traditional portland cement, and it can be used as a supplementary 
cementitious material to replace portland cement at various levels. A 
20 percent-50 percent replacement has been tested extensively against 
ASTM C 1157 concrete specifications. Based on worldwide production 
estimates, approximately 1.5 billion tons of portland cement could be 
substituted with carbonate cement, and another 30 billion tons of 
aggregate used in concrete, asphalt, and road base could be 
substituted--each ton of carbonate aggregate and cement containing one-
half ton of CO2. Thus, some 16 billion tons of 
CO2 could be permanently converted to CO3 per 
year on an ongoing basis at a profit. This product would be stable for 
centuries.
    The Department of Energy, the National Energy Technology Labs, and 
several academic institutions in the United States and other countries 
have evaluated several methods for accelerating the natural chemical 
weathering of minerals to produce carbonate minerals. Research has 
focused both on aboveground conversion of CO2 to carbonate 
minerals, and the potential for carbonate conversion belowground in 
brine reservoirs, or at geologic sequestration injection sites. These 
investigations began in the mid-1980s with Reddy's investigation of 
techniques to accelerate the natural mineral carbonation process.
    Since then, there have been many well known scientists working in 
this study area: Herzog at MIT, Halevy and Schrag at Harvard, O'Connor, 
researchers at the National Energy Technology Laboratory in Albany, and 
others, active in mineralization research. The focus of this research 
was testing of various base materials, reducing the massive energy 
consumption in the processing of these materials, and acceleration of 
the reaction rates. Current research has moved toward carbonation of 
coal-combustion fly ash and accelerated dissolution techniques of 
magnesium- and iron-rich silicates (so-called mafic minerals) used in 
carbonation processes.

                            COST-EFFICIENCY

    Every carbon-capture technology struggles with the issue of cost. 
The economic viability of our carbonate mineralization business model 
is significantly enhanced by the ability to sell captured-and-
converted-CO2 building materials into large end-markets. For 
each ton of CO2 captured, about two tons of building 
material can be produced. This process provides the opportunity to 
transform an environmental liability into a profit center. The market 
for these newly created materials can be significant. Based on USGS 
data showing worldwide annual cement consumption of 2.9 billion tons, 
approximately 12.5 billion tons of concrete are used yearly. Additional 
aggregate usage for asphalt and road base almost triples the potential 
for storing this captured CO2.
    Test data has shown that we can capture and convert CO2 
at 70 percent to 90 percent + efficiency with our current absorption 
configuration on flue gas typical of coal fired utility boilers (about 
10 percent-15 percent CO2). We have higher capture 
efficiencies for other industrial combustion sources, with higher 
concentrations of CO2 such as cement kilns (about 20 
percent-40 percent CO2) and refinery operations (about 95 
percent-100 percent CO2). In addition to our high-capture 
efficiencies, we produce materials that offset other products that have 
large carbon emissions such as cement. When we include the ``avoided'' 
CO2 of our capture and conversion into materials, this 
results in CO2 efficiency greater than 100 percent.
    We believe our CMAP technology can be cost-competitive. 
Particularly advantageous as compared to traditional CCS methods, our 
conversion technology does not require CO2 separation, which 
can be more energy, cost and carbon-intensive as the CO2 gas 
becomes more dilute or compressed. Separating CO2 emission 
from dilute streams, such as a coal-fired plant or a cement plant, is 
far more difficult than from a refinery that is almost pure 
CO2. In addition, our process does not require 
transportation, injection, storage or monitoring. Finally, it is 
important to keep in mind that as our plants grow and scale, we believe 
our costs will be lower than revenues, enabling a more rapid and 
extensive scale-up to address large-scale CO2 mitigation.

                           POLLUTANT REMOVAL

    Unlike other carbon-mitigation technologies, CMAP removes sulfur 
compounds and other pollutants. We are developing a multi-pollutant 
control option using the same basic absorption and conversion 
techniques we are using for CO2. The basis of our process 
for SO2 (sulphur dioxide) control is similar to seawater 
scrubbers that have been used in the world's largest power plants. We 
are still in the process of generating data, but our initial analysis 
indicates that we will be able to readily achieve SO2 
capture efficiencies greater than 90 percent.
    We are also working on new systems that will control NOX 
compounds by converting NO (nitrogen monoxide) to NO2 
(nitrous oxide), serious greenhouse gases that are water-soluble and 
can be stabilized in our mineral product. A significant advantage of 
our carbonate mineralization technology is that scrubbing 
SO2, NOX, particulate matter and other regulated 
air pollutants is not required in order for the process to capture 
CO2. This robust feature is in sharp contrast to other 
CO2-capture technologies such as those based on amine (MEA) 
and chilled ammonia, which require stringent control of SO2 
because it interferes with the absorption process. Therefore, to 
adequately compare carbonate mineral CO2-reduction to 
conventional CO2-reduction methods would require that the 
cost and energy consumption of the additional SO2 control be 
included with the conventional method for comparison sake.

                          DEMONSTRATION PLANTS

    Calera's business model is focused on the global potential of our 
technology with a milestone-driven plan to demonstrate capture rate and 
scalability. Our plan calls for building one or more demonstration 
plants that capture and convert flue gas CO2. These projects 
will benefit the socioeconomic status of the local communities by 
creating new jobs and business opportunities. Each plant will create 
200-300 construction jobs over a 2-year construction phase. Job types 
required include pipe fitters, electricians, operators, carpenters, 
laborers, steel workers, ironworkers, mechanics, bookkeepers, and 
clerical staff, among others. The completed facility will also provide 
new permanent jobs.
    We have completed a substantial amount of laboratory and scaled 
batch-process development and have recently commissioned a continuous 
pilot plant at Moss Landing, California, producing an average of one 
ton of material per day (a photo of this site is attached). From there 
we can quickly scale up the process to 20-80 MW for demonstration at 
coal-fired, electricity-generating units and cement manufacturing 
plants. Though the capital expenditures on these demonstration 
facilities are lower than many other CO2 mitigation 
technologies, they require investments in the tens to hundreds of 
millions of dollars--hence, my testimony today in support of a more 
balanced legislative language to foster the commercial development and 
scale-up of innovative technologies such as ours.




    Our process converts CO2 into carbonate minerals, thus 
permanently converting CO2 into a stable mineral form. When 
compared to traditional CCS methods, this conversion technology does 
not require costly CO2 separation or compression. Like any 
other manufacturer, energy is required to produce this product. Unlike 
other processes, our technology has the flexibility to capture 
CO2 and produce products continuously, while shifting a 
large fraction of the electrical power consumption to off-peak hours. 
The shifting of power consumption is accomplished through energy 
storage in chemical intermediates specific to the mineral sequestration 
chemistry. By producing and storing these intermediates during periods 
of low power demand, this process not only avoids straining the grid, 
but also better utilizes off-peak sources of power such as solar and 
wind.




    Calera's technology also reduces energy consumption and carbon 
footprint by utilizing power plant waste-heat for product processing. 
The use of waste heat is enabled by the process chemistry, which 
requires only low temperatures--in contrast to the very high 
temperature processes employed in the manufacture of other building 
materials. As a further means of reducing environmental impact, 
advanced versions of the process employ recirculation of process water. 
Although recirculation of process water may be desirable in arid 
regions, other process options under development may exploit synergies 
between the mineralization process and desalination technologies, 
resulting in improved economics for freshwater production.
    Another key breakthrough of our technology is the capacity to 
incorporate solid waste normally bound for landfills into useful 
products. Waste (such as fly ash) or aluminum smelter by-products (such 
as red mud and other waste products) can be incorporated into this 
process.

                             BEYOND CEMENT

    Calera will be important and valuable to States producing and/or 
consuming coal as they attempt to meet future carbon capture and 
trading requirements. Calera projects will bring long-term benefits to 
the coal industry by allowing existing coal plants to continue their 
operations under new air compliance regulations and avoid shutting down 
plants producing electricity at the lowest cost. This will save jobs at 
coal plants, mining sites and in transportation. The low cost of 
implementing Calera's technology compared to other CCS technologies 
reduces the impact of new CO2 regulations on the cost of 
energy and avoids leakage of U.S. operations oversees to countries that 
don't have CO2 regulations.
    By shifting the treatment of CO2 from a pollutant that 
needs to be disposed at a high price, to a potential raw material for 
clean manufacturing, our process enables a sustainable and cost-
effective capture of a significant portion of the anthropogenic 
CO2. In fact, when factoring the long-term potential 
revenues, revenues from building materials, carbon incentives and water 
treatment using a carbonate mineral process will be offset by the cost 
of capturing a ton of CO2.
    Based on our current estimates for construction and operating 
costs, and our forecasts for the building material markets, we expect a 
payback period of less than 10 years. Furthermore, based on our 
experience we believe our costs will go down as we learn to build and 
operate our plants, to the extent that our payback period could be 
reduced to 7 years. In our 2 years of operation we have made 
significant progress in understanding the scientific and engineering 
tasks of building a full-scale plant. From a small one-liter batch 
process to a 1-ton per day continuous pilot plant, we have learned how 
to optimize our capture rates and reduce our footprint and costs. Our 
progress is supported enthusiastically by the scientific community, 
environmental groups, potential business partners and the public. 
However, as for any industrial large-scale process, the next step 
requires a large investment to build a full-scale plant confirming our 
commercial scalability. Furthermore, the urgency of the climate 
challenge calls for an accelerated development path that demands 
special investments and support.

                            RECOMMENDATIONS

    Congress is working hard to address CCS and to rethink product 
manufacturing. We commend the Committee for acknowledging the 
importance of CCS and funding innovations in this area. However, 
current legislative language and Government funding consistently 
targets geological sequestration, which disadvantages other CCS 
options. While we acknowledge the potential value of geologic 
CO2 sequestration, we recommend placing other viable 
CO2-sequestering technologies on an equal playing field with 
geological sequestration.
    It is our hope that your subcommittee will also consider supporting 
an independent assessment by the National Academy of Sciences that 
reviews the opportunities and challenges of beneficial reuse and carbon 
conversion as part of the larger national CO2-reduction 
strategy.
    Calera is one of many breakthrough clean technologies that are 
evolving rapidly. Companies like ours need Government funding to help 
move this process towards commercialization. It is in the best economic 
interest of our country to advance the most effective technologies over 
time by providing grants, loan guarantees, tax incentives and other 
sources of financial support. For this reason, I urge Congress to 
preserve our ability to move beyond existing carbon-sequestration 
technologies through broad statutory language that encourages 
innovation and rewards breakthrough technologies that are not yet, but 
may soon be, household names.
    Finally, we seek Federal Government support because--despite the 
promise of technologies such as ours, the capital requirements are high 
in an extremely challenging macroeconomic environment and the risk of 
any new business venture is significant. The market for CO2-
reduction solutions such as ours is tremendous, but our product will 
take time and considerable capital to develop sufficiently in order to 
offset our development costs. Thus we need to scale up rapidly.
    On behalf of Calera Corp. and our stakeholders, I respectfully 
thank Chairman Dorgan, Ranking Member Bennett, and subcommittee members 
for your time and consideration. We see an important new option with 
the recovery funding, and we thank the Energy and Water Subcommittee 
for providing us with this opportunity to explore with you the 
beneficial reuse of CO2. The funding we seek could be both 
stimulating and transformative to energy policy, climate change, and 
the future of our economy. We look forward to working with the U.S. 
Congress and the appropriate subcommittees of jurisdiction (i.e., 
Senate Energy, Senate Finance, and others) to ensure equitable policies 
are in place that provide Federal support of CO2-beneficial 
reuse technology.

    Senator Dorgan. Dr. Constantz, thank you very much.
    And finally, we will hear from Ms. Tatro. Marjorie Tatro is 
the director of fuel and water systems at the Sandia National 
Laboratories.
    So, Ms. Tatro, thank you for being with us. You may 
proceed.

STATEMENT OF MARJORIE L. TATRO, DIRECTOR OF FUEL AND 
            WATER SYSTEMS, SANDIA NATIONAL LABORATORIES
    Ms. Tatro. Great. Thank you, Mr. Chairman, Senator Bennett, 
and distinguished members of the subcommittee.
    As you know, we are faced as a Nation with two challenges 
that actually inspire us as well to think about the reuse of 
carbon dioxide not only to enable this use of the coal reserves 
that we have, but we believe that carbon dioxide as a fabulous 
feedstock for creating liquid fuels that could be inserted into 
our existing infrastructure is really a fabulous and innovative 
idea.
    You mentioned algae-based biofuels, which do have 
tremendous promise, and we agree that those need to be 
developed in a way that allow us to scale them up to the kind 
of quantities to make them commercially and technically viable. 
And I wanted to talk to you about another technology today that 
offers some of the same benefits.
    We have done a little work at Sandia National Laboratories 
in taking concentrated sunlight, high-temperature solar energy, 
and putting it into a heat engine. This heat engine takes 
carbon dioxide in one side, takes water in the other side, and 
splits those molecules apart to then thermochemically 
recombining those together to create a liquid fuel. In this 
case, it is methanol. And there are commercial processes that 
can convert methanol into gasoline, jet fuel, and diesel.
    This is another way to use carbon dioxide as a feedstock. 
Just like it is a nutrient for algae, it is a feedstock for a 
liquid fuel that can be compatible with our existing 
transportation infrastructure.
    Another area I wanted to mention that we ultimately have to 
look at is being able to extract carbon dioxide from the air. 
Because if we are going to have progress in reducing the 
overall emissions from our energy enterprise into the 
atmosphere, it is important that we think about scalable, 
affordable technologies that can capture that CO2 
ultimately from the air and reintroduce it or recycle it into 
some of these fuel feedstock options.
    I agree that our first steps are using carbon dioxide from 
our coal enterprise as a fabulous feedstock for these 
transportation fuels, and ultimately, we need to make progress 
in pulling carbon dioxide from the atmosphere as well.
    These are just a few ideas that are out there. We believe 
that this Nation is ready to step up to this innovative area of 
recycling and reuse of carbon dioxide. And I believe there are 
many ideas out there that none of us have even thought of, and 
it is worth an investment by this country to stimulate those 
ideas and bring them forward.
    I think the United States has a chance to be a leader in 
these areas, but right now, let me tell you other countries are 
also investing in these areas. And my fear is not only that we 
might be left behind in this area, but perhaps we could end up 
importing both these technologies or the fuels they create from 
foreign sources, which would not help our energy security 
situation.
    So we have talked about algae. We have talked about 
synthetic fuels that could come from renewable sources like 
solar energy. We have talked about the idea of extracting 
CO2 from the air, and there are many more details in 
my written testimony that I believe you have been provided.

                           PREPARED STATEMENT

    But we are excited. We think this is a great innovative 
area for the country. We appreciate and applaud the 
subcommittee's leadership in looking at this area, and we stand 
ready to support this area with innovation from a number of 
different collaborative teams all across the country.
    With that, I would like to conclude and look forward to 
your questions.
    [The statement follows:]

                Prepared Statement of Marjorie L. Tatro

                              INTRODUCTION

    Mr. Chairman, Senator Bennett, and distinguished members of the 
subcommittee, thank you for the opportunity to testify this morning. I 
am Margie Tatro, Director of Fuel and Water Systems at Sandia National 
Laboratories. Sandia is a multi-program national security laboratory 
owned by the United States Government and operated by Sandia 
Corporation \1\ for the National Nuclear Security Administration 
(NNSA). I am a Mechanical Engineer by training and I have worked in 
energy technologies for over 20 years.
---------------------------------------------------------------------------
    \1\ Sandia Corporation is a subsidiary of the Lockheed Martin 
Corporation under Department of Energy prime contract number DE-AC04-
94AL85000.
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    Sandia has roles in the design, development, qualification, and 
certification of non-nuclear subsystems of nuclear warheads, nuclear 
nonproliferation, energy security, intelligence, defense, and homeland 
security. Sandia is proud of the considerable expertise it has achieved 
in the area of energy security, especially in understanding the 
relationship between national security and the energy enterprise.
    Sandia is widely published in the energy and fuels research 
category. In fact, according to Science Watch,\2\ among institutions 
ranked by total citations of papers published between 1998 and 2008, 
none surpasses Sandia National Laboratories, with more than 4,100 
citations to its 395 papers. In addition, Sandia ranks in the top 10 
institutions when measured by citation impact. The area most widely 
cited during this 10-year period was combustion science followed by 
strong contributions in battery science and solar energy. Sandia is 
fortunate to have a talented multidisciplinary team of scientists and 
engineers who are dedicated to delivering ``exceptional service in the 
national interest.''
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    \2\ Science Watch (2008), Nov/Dec Featured Analysis, http://
sciencewatch.com/ana/fea/08novdecFea/ (Note that citation impact is 
measured by average number of citations per published paper.)
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                         SUMMARY OF KEY POINTS

    My statement today is summarized in four key points:
  --The U.S. economy and environment would benefit from investments in 
        scalable technologies and processes for recycling of carbon 
        dioxide (CO2) as one option for addressing two 
        critical, yet interrelated, challenges facing our Nation and 
        the world--stabilizing the concentration of CO2 in 
        our atmosphere and producing new supplies of liquid hydrocarbon 
        fuels that help reduce our dependence on petroleum. Though I 
        will describe efforts at Sandia focused on CO2 
        recycling to address these challenges, an organized and focused 
        national effort including the establishment of a number of 
        collaborative teams to explore these and other approaches would 
        be prudent investments in the long-term interest of the Nation.
  --Algae-based biofuels and synthetic fuels from solar energy are 
        attractive because of the possibility of converting solar 
        energy into liquid hydrocarbon fuels which are compatible with 
        the existing infrastructure and at scales and efficiencies 
        sufficient to meet large demands. Lifecycle efficiencies are 
        important because they are indicators of the relative ``size of 
        the enterprise'' necessary for large volume production. As 
        important as efficiency, both options can recycle 
        CO2 back into fuel at rates faster than the 
        biosphere takes up CO2. Lastly, if CO2 is 
        extracted directly from the atmosphere, then we can produce 
        high-efficiency, carbon-neutral fuels.
  --With the support of the Department of Energy (DOE) and others, 
        Sandia is developing and applying science-based algae growth 
        models and techno-economic tools to examine the best options 
        for scaling up the production of algal biofuels. Sandia has 
        also built a prototype ``chemical heat engine'' to split water 
        and CO2 using concentrating solar energy. This 
        prototype is a critical step towards demonstrating the 
        feasibility of making solar-based fuels without first making 
        electricity. We are equally excited about a number of ideas for 
        extracting CO2 from the atmosphere. As excited as we 
        are, we know of many others with similar enthusiasm and ready 
        to make major contributions.
  --Other countries are exploring reuse and recycling of CO2 
        and it would be unfortunate if the United States became 
        dependent on imported technology in this critical area. This 
        ``grand challenge'' has excited our team; indeed, I believe 
        this, and sustainable energy research in general, is exciting 
        to the next generation of engineers and scientists all across 
        the Nation.

         THINKING DIFFERENTLY ABOUT ENERGY, CARBON AND SECURITY

    Taking today's energy system in the United States as a whole, there 
are six major problems: (1) over 50 percent of primary energy resources 
are lost as waste heat and emissions during energy transformations and 
transport; (2) diverse and intermittent resources, such as wind, solar, 
and distributed generation, are difficult to accommodate; (3) the 
system relies on nature to close the cycle on waste by-products such as 
used nuclear fuel, CO2, and heat; (4) the infrastructure is 
limited in capacity, flexibility, reliability, and resiliency; (5) 
increased competition for finite petroleum and natural gas resources 
limits our foreign policy options and puts pressure on our economic and 
military resources; and (6) unpredictable energy prices create 
uncertainty and risk for all stakeholders (producers, suppliers, end-
users, and policy makers).
    As we strive to transition today's energy system to one that 
alleviates the problems mentioned above, we should keep the following 
requirements in mind:
  --Safety.--Safely supplies energy services to the end user;
  --Security.--Resists malevolently caused and weather or aging 
        infrastructure-related disruptions and recovers quickly from 
        any disruptions;
  --Reliability.--Maintains delivery of energy services when and where 
        needed;
  --Sustainability.--Matches resources and delivery with needs for 
        energy services for the entire duration of those needs with 
        minimal waste; and
  --Affordability.--Delivers energy services at the lowest predictable 
        cost.
    To meet the needs of future generations--and assuming a desire to 
stabilize CO2 concentrations in the atmosphere and a 
continued demand for portable energy for transportation--the 
transformed energy system will be one that likely has five key 
elements: (1) its primary energy supply comes from persistent 
(preferably domestic) low-net-carbon energy resources; (2) its energy 
carrier conversion, as well as distribution and use, involves processes 
that are as efficient as practical; (3) it reuses or recycles resources 
in waste streams, particularly ones that have some inherent value such 
as residual energy or useful mass; (4) it uses liquid hydrocarbons \3\ 
made from abundant and accessible carbon and hydrogen resources; and 
finally, (5) it has inherent storage to accommodate disruptions and 
makes maximum use of the existing energy infrastructure. The current 
national dialog focuses mostly on the first element and, unfortunately, 
very little on the other four.
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    \3\ Liquid hydrocarbons are easily distributed and used in the 
existing infrastructure, including the hundreds of millions of vehicles 
currently on the road with mean age of 8-9 years and median lifetimes 
of >17 years. Hydrocarbons can also provide inherent portable storage 
for intermittent sources such as solar and wind, especially in 
circumstances when those resources are not readily connected to the 
grid.
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    We find making liquid hydrocarbon fuels from ``recycled'' 
CO2 an intriguing prospect for enabling the above envisioned 
energy system as it would preserve the positive attributes of petroleum 
while eliminating most of the negatives, and at the same time using an 
abundant waste stream. Indeed, developing solar, wind, geothermal (and 
maybe nuclear) driven processes that can efficiently, cost-effectively, 
and sustainably take the products of combustion, CO2 and 
water, and recreate liquid hydrocarbon fuels would be an unparalleled 
achievement. Surmounting this challenge would go a long way toward 
solving the problem of finding domestic substitutes for petroleum which 
do not add more carbon to the atmosphere. Later in my statement, I will 
talk more about our ultimate vision of ``recycling'' CO2 by 
extracting it directly from the atmosphere, thereby slowing the 
increases in the concentration of CO2 in the atmosphere. We 
envision using the atmosphere as an efficient means for transporting 
the CO2 from any source to the ``recycle sink.'' But before 
doing this, a summary of the CO2 ``situation'' is in order.
Carbon Management Options
    Carbon dioxide is a by-product of energy conversion processes; it 
is emitted when fuel is combusted. In 2006, worldwide CO2 
emissions were 29.2 GtCO2 (metric Gigatons of 
CO2) with the U.S. being one of the largest contributors, 
adding 5.9 Gt in 2006.\4\ The United States consumed 20.7 million 
barrels of oil per day in 2007. Note that a typical barrel of crude oil 
will produce 0.42 metric tons of CO2 if combusted.\5\ Of 
petroleum use in the United States, 69 percent goes to transportation. 
The transportation sector in the United States contributed almost 2 Gt 
of CO2 emissions to the atmosphere in 2006.\6\ Since pre-
industrial times the concentration of CO2 has increased from 
roughly 280 parts per million by volume (ppmv) to approximately 385 
ppmv.\7\
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    \4\ DOE Energy Information Administration (2006).
    \5\ NETL (2008), ``Storing CO2 with Enhanced Oil 
Recovery,'' DOE/NETL-402/1312/02-07-08, 35.
    \6\ DOE Energy Information Administration (2006).
    \7\ http://www.noaanews.noaa.gov/stories2008/20080423_methane.html.
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    We now explore how recycling of CO2 fits into carbon 
management options with the goal of reducing the growth of atmospheric 
CO2 concentrations more broadly. We think of carbon 
management in terms of rebalancing the sources and sinks to and from 
the atmosphere--currently sources exceed sinks and this is why the 
concentration of CO2 in the atmosphere is increasing. There 
are five elements in a carbon management tool box: (1) reduce; (2) 
extract; (3) reuse; (4) recycle; or (5) bury. There are three avenues 
to reduce: (i) reduce the demand for energy services (e.g., drive fewer 
miles); (ii) increase the efficiency in the energy conversion and 
transport processes; and (iii) reduce the carbon intensity or 
CO2 emitted per unit of primary energy. Extract comes into 
play as we begin to seriously think about active carbon management by 
capturing at the source, usually large stationary sources, such as 
coal-burning power plants. However, we can also conceive of extracting 
directly from the atmosphere, surface waters, or heavily distributed 
emitters. The reuse category presents several options, including 
enhanced oil recovery (EOR) as well as using the CO2 as a 
``green'' solvent in chemical processing, for dry ice in food 
processing, and for carbonation. The recycle category has received very 
little attention to date except indirectly through the production of 
bio-energy from biomass. Recycle is the category that is the principle 
focus of my statement today. The bury category is equivalent to 
sequestration--or the storage part of carbon capture and storage.
    At present, industry has a variety of uses for CO2, but 
the quantities are small. Some example uses are: neutralizing alkaline 
effluents in the chemical sector; making salicylic acid and aspirin in 
the pharmaceutical sector; chilling and carbonation in the food and 
beverage sector; balancing the pH in the pulp and paper sector; cooling 
and cleaning in the electronics sector; and as the fire suppression 
material in fire extinguishers.\8\ \9\ The annual use of CO2 
for EOR in the United States is estimated at 0.04 Gt.\10\ While 
``recycling'' CO2 as a feedstock for chemical production is 
an important use, the United States only consumed on the order of 0.11 
Gt \11\ of CO2 in the 2003 timeframe; the largest use was to 
make urea. Furthermore, even if the top three U.S. produced chemicals 
(ethylene, propylene, and ethylene di-chloride) used CO2 as 
the carbon source, they would only consume another 0.14 Gt.\12\ The one 
``chemical'' product that does scale to large quantities is fuels. If 
we were to use CO2 as the carbon source to generate the 
equivalent of our petroleum consumption, 3.0 Gt of CO2 would 
be consumed or recycled.\13\
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    \8\ Gobina, E. (2004), ``Carbon Dioxide Utilization and Recovery,'' 
BCC Report E-131, Business Communications Co., Norwalk, CT.
    \9\ ``Carbon Management: Implications for R&D in the Chemical 
Sciences and Technology'' (A Workshop Report to the Chemical Sciences 
Roundtable), http://www.nap.edu/catalog/10153.html.
    \10\ DOE/NETL-402/1312/02-07-08, ``Storing CO2 with 
Enhanced Oil Recovery,'' February 2008, pp 45.
    \11\ Beckman, E.J. (2003), ``Green Chemical Processing Using 
CO2,'' Ind. Eng. Chem. Res., 42 (8), pp 1598-1602.
    \12\ Chemical & Engineering News, July 2, 2007.
    \13\ For this conversion, we assumed 20.7 million barrels/day, 136 
kg/barrel, and 83 percent carbon in petroleum by weight.
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    Technologies that can recycle CO2 into liquid 
hydrocarbons are attractive propositions. Liquid hydrocarbon fuels are 
ideal energy carriers and exceptionally convenient to store, transport, 
and transfer due to their liquid form and high energy-density by mass 
and volume. While greater electrification of the transportation fleet 
will almost certainly be an important element of a transformed energy 
system, routes to creating liquid hydrocarbons which have properties 
equivalent to gasoline, diesel, and jet fuel should not be ignored.
Efficiency Matters
    We are reminded that petroleum, coal, natural gas, and 
unconventional oil are in fact ``stored sunlight'' and ``sequestered 
carbon''.\14\ We tend to categorize fossil fuels as primary energy 
resources when, in fact, they are energy carriers, which are the result 
of an inefficient set of conversions of energy and mass fluxes 
integrated over a very long time. The process began many millions of 
years ago with a biological organism capturing sunlight (solar flux) 
and storing the sun's energy by using it to drive chemical reactions of 
CO2 and H2O to higher energy hydrocarbons and 
oxygen (photosynthesis). A small fraction of the plant matter was then 
converted over time by heat and pressure to coal, oil, and natural gas. 
The overall efficiency in this naturally occurring process was quite 
low.
---------------------------------------------------------------------------
    \14\ Dukes, J.S. (2003), ``Burning Buried Sunshine: Human 
Consumption of Ancient Solar Energy.'' Climatic Change, 61, 31.
---------------------------------------------------------------------------
    Efficiencies are important because they provide an indicator of the 
``scale of the enterprise'' needed to convert solar energy into fuels, 
and are therefore one indicator of relative costs. For oil, the 
sunlight-to-stored energy can be estimated \14\ to be only about 0.0002 
percent efficient, with large error bars on that estimate. Another way 
to look at this efficiency is to estimate energy and carbon fluxes. 
This estimate reveals possible efficiencies of algal biofuels of nearly 
3 percent and solar synthetic fuels of 5 percent-10 percent (though 
large uncertainties exist because neither technology has been proven at 
large scale). Assuming an average lifecycle efficiency of 5 percent 
(and average solar energy of 200 watts per square meter), producing the 
equivalent of the U.S. petroleum usage of 20.7 million barrels of oil 
equivalent per day using solar energy would require approximately 28 
million acres of land. In contrast, total U.S. land is roughly 2 
billion acres and paved highways in the United States cover 
approximately 19 million acres.
    Bio-energy from biomass or biofuels can be thought of as a modern-
day approach to improve upon nature's inefficient process to create 
petroleum. As with fossil fuels, the starting point is the 
photosynthetic conversion of CO2 and H2O to 
hydrocarbons in the form of carbohydrates and lipids. The efficiency of 
this process is significantly better than that for petroleum and is 
estimated in our energy flux analysis to be approximately 3 percent. 
Additional chemical or biological steps are then undertaken to produce 
a liquid hydrocarbon fuel. Algae are attractive as a fuel feedstock 
because their production can potentially avoid competition with 
agricultural lands for food and feed production and can use nonfresh 
water resources. CO2 is added to the water as a nutrient to 
achieve high productivity from algae.
    Taking another step further towards increasing the efficiency and 
directly recycling CO2 into synthetic fuels can be thought 
of as emulating the effectiveness of nature's choice to store solar 
energy by converting CO2 and H2O into high 
energy-density hydrocarbons.\15\ Synthetic processes bypass the 
biological steps that lead to low energy and carbon fluxes and low 
efficiencies. A worthy target for synthetic routes would be to achieve 
lifecycle efficiencies of approximately 10 percent.
---------------------------------------------------------------------------
    \15\ Nature's preferred energy storage means is fat or oil, both 
which have an energy density of approximately 39 MJ/kg, fairly close to 
that of gasoline, diesel, and jet fuels at approximately 45 MJ/kg.
---------------------------------------------------------------------------
    A known option would be to assemble a system based on solar 
photovoltaics using electrolysis of water to make hydrogen 
(H2), then reacting the H2 with CO2. 
Such a system could be assembled from commercially available components 
(though none is currently economically viable) and could achieve 
approximately 5 percent efficiency, with a limiting factor being the 
initial step of converting solar energy to electricity.
    It is these relatively high efficiencies and minimal land 
requirements that generate our excitement about the prospects for 
recycling CO2 into algae-based fuels and solar-based fuels. 
Creating technologies that are capable of extracting CO2 
from the atmosphere is also important to make these fuels ``carbon 
neutral.'' In the remainder of this document, we delve more deeply into 
the three types of technologies that are key enablers for the recycling 
of CO2: (1) algae-based fuels; (2) direct synthesis of fuels 
from CO2 and water including ``Sunshine-to-Petrol''; and (3) 
extraction of CO2 from the air. For each technology, we will 
present a few activities both domestically and abroad, efforts at 
Sandia that that indicate the promise of such options, and current 
technological and economic challenges with possible timelines.

                             ALGAL BIOFUELS

Current Activities
    From 1978 to 1996, the Department of Energy's (DOE) Aquatic Species 
Program represented the most comprehensive research effort to date on 
fuels from algae. Headed by National Renewable Energy Laboratory 
(NREL), the program also supported fundamental research at many 
academic institutions.\16\ Since 2007, Sandia has partnered with NREL 
to develop an algal technology roadmap for DOE's Office of Energy 
Efficiency and Renewable Energy and Office of Biomass Program. The 
roadmap will identify and prioritize key biological and engineering 
hurdles that must be overcome to achieve cost-effective production of 
algal-based biofuels and coproducts. It will also suggest research 
strategies to address these barriers. The DOE's National Energy 
Technology Laboratory has partnerships in place with coal-fired power 
plant operators to explore the option of growing algae in cooling-water 
ponds.
---------------------------------------------------------------------------
    \16\ Sheehan, J., T. Dunahay, J. Benemann and P. Roessler (1998), 
``A look back at the U.S. Department of Energy's Aquatic Species 
Program-Biodiesel from Algae,'' https://www.nrel.gov/docs/legosti/fy98/
24190.pdf.
---------------------------------------------------------------------------
    The prospective value of biofuels from algae has been recognized 
internationally not only by the global research community, but also a 
range of commercial sectors including transportation energy, 
agriculture, and biotechnology, and the venture capital community. A 
large cadre of venture-backed start-ups working on algal biofuels has 
emerged over the last few years and larger companies are also getting 
involved in algae. Meanwhile, the global research community has moved 
quickly to embrace the challenges presented by producing algal biofuels 
at scale as witnessed by the dramatic acceleration in conferences on 
algal biofuels and the formation of public-private partnerships and 
consortia. This is occurring in the United States, Israel, China, 
India, France, the Netherlands, and Denmark.
    It is estimated that the production of 2.4 million barrels of 
gasoline with algal oil would consume 1.5 billion tons of 
CO2, or 43 percent of total 2008 U.S. emissions from 
stationary sources.\17\
---------------------------------------------------------------------------
    \17\ National Carbon Explorer 2008 CO2 Stationary Source 
Atlas, http://www.natcarb.org.
---------------------------------------------------------------------------
Sandia's Efforts
    The algal biofuels program at Sandia National Laboratories 
leverages technical strengths in analytical chemistry and applied 
biology, computational fluid dynamics, and integrated systems 
analysis--including developing and applying biofuels supply chain 
models aimed at identifying barriers to cost-effective production of 
algal biofuels. Sandia's efforts include developing and applying 
analytical tools to characterize algae gene and protein networks and to 
monitor algae health. In applied biology, Sandia develops fundamental 
understanding of algal physiology through genetic engineering, enzyme 
engineering, and identifying biomarkers and strategies for monitoring 
biomarkers relevant to biomass cultivation and fuel production.
    In the area of computational fluid dynamics, Sandia has developed 
an algae growth kinetic model in a computational fluid mechanics 
framework as an engineering tool to develop cultivation strategies for 
algae--both open ponds as well as photobioreactors.\18\ Sandia also 
owns and operates a facility with algal growth tanks that are equipped 
with sensors that can be used for validating production models. Systems 
dynamics models also help us understand the relationship between water 
supplies, evaporation, and algae production.
---------------------------------------------------------------------------
    \18\ Boriah, V. and S.C. James, ``Optimizing Algae Growth in an 
Open-Channel Raceway,'' Algae Biomass Summit, 2008.
---------------------------------------------------------------------------
    In related efforts, Sandia is an active member of the Joint 
Bioenergy Institute and contributes towards biomass deconstruction and 
pretreatment for cellulosic biofuels. Our world-class Combustion 
Research Facility and Center for Integrated Nanotechnologies provide 
fundamental science understanding in areas of alternative 
transportation fuels.

Techno-Economic Challenges
    Scientific discovery must be complemented by engineering and 
techno-economic evaluations to enable affordable, scalable algal 
biofuels. Open literature has reported algal-derived crude oil at a 
cost spanning over three orders of magnitude ($1 to $1,000 per gallon 
of triglyceride), with the greatest uncertainties in estimates of 
facility and operating costs.\19\ Investment in every step of the 
supply chain, from understanding algal biology, strain selection and 
optimization, cultivation at scale, harvesting, dewatering, and 
extraction of the hydrocarbons from the algal biomass is needed. As 
such, both the DOE and the U.S. Department of Agriculture have called 
for algal biomass funding opportunities to accelerate the R&D cycle.
---------------------------------------------------------------------------
    \19\ Pienkos, P., ``Historical Overview of Algal Biofuel 
Technoeconomic Analyses,'' National Algal Biofuels Technology Roadmap, 
December 9-10, 2008.
---------------------------------------------------------------------------
    The DOE has commissioned Sandia and NREL to jointly create a 
systems dynamics model for carrying out techno-economic analyses of 
algal fuel development strategies. To be cost competitive, the process 
must be able to tolerate solar energy variability and energy and water 
consumption must be lowered. In evaluating resource constraints, it is 
clear that the availability of water and CO2 use will limit 
the locality of sustainable algal biofuel production.\20\
---------------------------------------------------------------------------
    \20\ Pate, R., ``Algal Biofuels Techno-Economic Modeling & 
Assessment: Taking a Broad Systems Perspective,'' National Algal 
Biofuels Technology Roadmap, December 9-10, 2008.
---------------------------------------------------------------------------
    While algal biofuels present an opportunity that will require some 
time (roughly 10 years) to realize, they are a key component in the 
U.S. biofuels strategy. Transportation fuels produced from algal 
biomass are compatible with our existing transportation fuel 
infrastructure, can recycle CO2 waste streams, and can be 
produced on nonarable land with impaired water sources.

             SYNTHETIC FUELS FROM CO2 AND WATER

Current Activities
    Work on alternative fuels has been ongoing for much of the last 
century; the chemistry and technology for converting fossil-energy 
resources such as coal is well established and has been practiced 
commercially in parts of the world for many decades. In contrast, the 
science and technology for producing hydrocarbon fuels from persistent 
energy sources (e.g., solar, wind, geothermal, and nuclear power) in a 
sustainable fashion, is relatively immature. Investments and advances 
in biofuels and H2 are ongoing. Because H2 is a 
critical feedstock for making liquid fuels, research efforts aimed at 
the renewable production of H2 also further the vision of 
recycling CO2 into fuels.
    Work on CO2 reuse and recycling has been less visible, 
but nonetheless efforts are underway around the world. Many of these 
efforts have been directed towards applications that could consume only 
a very small fraction of the CO2 produced through the 
combustion of fossil fuels, for example supercritical solvents and 
production of higher-value chemicals.
    The primary challenge to recycling CO2 as a chemical 
feedstock for either fuels or chemicals and pharmaceuticals is the 
energy cost and efficiency for splitting (activating) the very stable, 
CO2 molecule; furthermore, that energy source must itself 
have a very low carbon intensity. Achieving such a technology would 
open the door to using CO2 as a feedstock for liquid fuels 
as well as for polymers, plastics, carbonates, and numerous other 
valuable chemicals and materials (i.e., light-weight carbon composites 
and carbon-nanotube-based materials).
    One basic approach for re-energizing the CO2 molecule 
into a useful product has been to react it with another energetic 
molecule such as H2. Both Korea and Japan have sponsored 
work in this area. For example, Japan's Mitsui Chemicals recently 
announced their intent to make methanol from captured CO2 
and H2. Additionally, efforts have been initiated in Iceland 
to commercialize the production of methanol from CO2 and 
H2 from geothermal-powered electrolysis of water.
    An alternative means is to use electricity to directly re-energize 
CO2. This is analogous to splitting water by electrolysis to 
make H2. Hybrid biological and electrical approaches are 
showing progress. Examples include work at Princeton and announcements 
from the private sector, such as Carbon Sciences. However, we emphasize 
that unlike splitting water and making H2, there are no 
commercialized technologies that have been developed to directly 
activate CO2 and only few research efforts around the world 
are underway.
    Finally the greatest amount of work has been carried out on 
approaches that can broadly be categorized as artificial 
photosynthesis. These most closely emulate the process of 
photosynthesis in harvesting the energy from sunlight to generate 
electrons and protons to reduce the CO2. The work ranges 
from efforts to engineer new devices using the tools of nanotechnology 
to efforts to replicate natural systems removed from a living organism. 
Genetic engineering of living organisms is a related approach.
Sandia's Efforts
    At Sandia, we have assembled a multi-disciplinary team of 
scientists and engineers, including a number of university partners to 
explore a promising new approach to directly activating CO2 
using concentrated solar energy. A novel new ``heat engine'' concept 
\21\ breaks a carbon-oxygen bond in the CO2 to form carbon 
monoxide and oxygen in two distinct steps at two different 
temperatures. Energy for the high-temperature step comes from the sun. 
This thermochemical approach appears suited to the production of both 
H2 from water and carbon monoxide from CO2. This 
process, which we call ``Sunshine-to-Petrol,'' avoids converting the 
principal energy source (e.g., solar energy) to electricity thereby 
providing an avenue to potentially higher efficiency than the 
alternatives. The Sandia team built a thermochemical ``heat engine'' 
and named it the Counter-Rotating Ring Receiver Reactor Recuperator or 
``CR5.'' The CR5 is a solar receiver which converts concentrated solar 
energy into thermal energy. The rings counter-rotate. It is a reactor, 
actually two reactors--thermal reduction and oxygen extracting. Lastly, 
it is a recuperator--to minimize heat losses and maximize efficiency. 
If suitable materials can be developed and the design challenges can be 
met, the CR5 heat engine concept appears to provide an integrated 
approach for potentially efficient and affordable solar-activated 
CO2 and water. However, this system imposes unique 
requirements on materials.
---------------------------------------------------------------------------
    \21\ Diver, R.B., J.E. Miller, M.E. Allendorf, N.P. Siegel, R.E. 
Hogan (2008), ``Solar Thermochemical Water-Splitting Ferrite-Cycle Heat 
Engines,'' Journal of Solar Energy Engineering, November 2008, vol. 
130, issue 4041001.
---------------------------------------------------------------------------
Techno-Economic Challenges (for ``Sunshine-to-Petrol'')
    The CR5 involves numerous design issues and tradeoffs. It places 
extraordinary demands on materials and involves high-temperature moving 
parts. Ensuring we have suitable materials will require a substantial 
degree of fundamental understanding of the chemical and cycle 
thermodynamics. To establish the practicality of the CR5 concept, we 
are experimentally evaluating materials, exploring the thermodynamics 
and kinetics of the materials, evaluating heat and mass flows within 
the device, and assessing a number of integrated system designs. We 
expect a focused effort to have a reasonable probability of success. We 
envision a series of improved engine and system designs. Successful 
progress would consist of continuously improved generations of 
prototypes and Sunshine-to-Petrol systems resulting in a new generation 
every 3 years with significant improvements in performance, durability, 
and cost. The system would produce gasoline or diesel or jet fuel as 
the end product. Our targets are efficiency: 10 percent system and 
lifecycle efficiency,\22\ durability: 5 years of operation for the 
reactive rings and 20 years for the mirrors and the rest of the engine, 
and of course cost: competitive with all low-carbon alternatives to 
petroleum, but perhaps no more than $5.00/gallon of gasoline. With that 
schedule of improvements, the technology should be market-ready in less 
than two decades. For a concept as new as the CR5 and Sunshine-to-
Petrol, we believe that this would be an aggressive schedule.
---------------------------------------------------------------------------
    \22\ Lifecycle efficiency includes solar energy to gasoline 
conversion and takes into account the energy required to manufacture 
the components of the system. Some refer to this as ``rays-to-tank'' 
efficiency.
---------------------------------------------------------------------------
                   EXTRACTING CO2 FROM AIR

Current Activities
    To achieve the promise of recycling CO2 into renewable 
and sustainable liquid hydrocarbons through either algae-based or 
solar-based fuels requires extraction of CO2 directly from 
the air. The extraction of CO2 from air has received 
relatively little attention. However, with the announcement of the 
Earth Challenge Prize,\23\ by Richard Branson of Virgin Atlantic, a 
number of small start-up companies are taking on this challenge. Small-
scale CO2 capture within submarines and spacecraft is well 
known. In these applications however, the CO2 was generally 
not used for further purposes and release from the capture agent had 
not been a deliberate design parameter. Klaus Lackner of Columbia 
University authored several studies on CO2 capture, with 
many compelling arguments and has been awarded a patent, with Allen 
Wright from Global Research Technologies for their novel concept. A 
project initiated at Carnegie Melon \24\ demonstrated the general 
feasibility of CO2 capture from air using an aqueous NaOH 
spray. Lab-scale units have been built by teams at the University of 
Calgary in Alberta, Canada and at the Swiss Federal Institute of 
Technology in Zurich. ``Green Freedom'' efforts at Los Alamos National 
Laboratory are addressing the capture of CO2 from air flows 
of cooling towers, such as those at nuclear power plants.
---------------------------------------------------------------------------
    \23\ Sponsors are seeking method that will remove at least one 
billion tons of CO2 per year from the atmosphere, and the 
winner will receive $25 million.
    \24\ Stolaroff, J.K., D.W. Kieth, and G.V. Lowry (2008), ``Carbon 
Dioxide Capture from Atmospheric Air Using Sodium Hydroxide Spray,'' 
Environmental Science and Technology, 42, 2728-2735.
---------------------------------------------------------------------------
    While conversion of atmospheric CO2 into a pure 
feedstock for hydrocarbon fuels synthesis is unquestionably feasible at 
the bench scale, estimations suggest prohibitively high costs and very 
low efficiencies relative to what is theoretically possible. Hence, 
proven methods needed to concentrate large amounts of CO2 at 
affordable costs and high efficiency do not exist. CO2 
capture in a specially designed material is analogous to H2 
storage, where the design consideration is to be able to grab it tight 
enough, but not so tight that it cannot be released at the appropriate 
time. Most materials identified have a large energetic cost penalty to 
remove the CO2 or very slow kinetics at the uptake. What is 
needed is fast kinetics at the uptake and low energy for release, but 
not too low. Industrial-scale capture will also entail the processing 
of large volumes of air through the capture media.
Sandia's Efforts
    At Sandia, we have explored the plausibility of large-scale capture 
from air and a number of new solid sorbents. Our investigations 
indicate, among other things, that at 4.5 meters/second wind speeds, 
the cross-sectional area needed to collect enough CO2 to 
produce 20.7 millions barrels of oil is between 14,000-36,000 acres, 
corresponding to capture efficiencies \25\ of 50 percent and 20 
percent, respectively. Sandia has been collaborating with researchers 
at the National Energy Technology Laboratory to explore the feasibility 
of a number of ideas for capturing CO2 from the atmosphere.
---------------------------------------------------------------------------
    \25\ Capture efficiency is the percent of CO2 extracted. 
For example, 50 percent at 400 ppmv in the air stream would leave 200 
ppmv in the air stream after passing through the collection media.
---------------------------------------------------------------------------
Techno-Economic Challenges
    Our analysis suggests the following technical challenges must be 
met before capture of atmospheric CO2 for conversion to 
hydrocarbon fuels or for other re-use options can be considered 
plausible at the industrial scale: (1) low-energy air processing 
approaches to assure effective air flows through CO2 sorbent 
media to ensure high production rates; (2) durable and easily 
manufactured materials that readily capture as well as release 
CO2 from air at industrial scales; (3) less expensive solid 
or liquid CO2 sorbents that have high capacities and are 
stable over very many catch-and-release cycles; and (4) bench-scale 
testing and later, pilot-scale demonstrations of atmospheric 
CO2 capture approaches.
    We expect a focused effort for a decade would have a good 
probability for success, depending on what cost the market can bear. 
Note that a capture cost of $50-$75 per metric ton of CO2 
would add only $0.44-$0.66 to the cost of a gallon of gasoline. This 
seems achievable.

                               CONCLUSION

    The possibility of making liquid fuels from domestic resources that 
are compatible with our existing transportation energy infrastructure 
while recycling CO2 is exciting and real. Because so much of 
today's CO2 emissions come from the burning of fossil fuels, 
it seems natural for us to use this waste stream to produce alternative 
fuels for future generations. Ideas including those described in this 
document--algal-based biofuels, solar or other renewable-based fuels, 
and extraction of CO2 from air--require investments to prove 
their technical and economic viability at large scale.
    Collaborative teams from across the Nation, and the world, are 
already developing ideas worth pursuing, but the efforts are currently 
splintered; we must act now to stimulate this area of research and 
development. Other countries are exploring the re-use and recycling of 
CO2 and it would be unfortunate if the United States became 
dependent on imported technology or imported alternative fuels in this 
critical area.
    Let me conclude by noting a caution from the technology-policy 
interface perspective. Carbon management policies that might 
inadvertently create disincentives for those who pursue the idea of 
CO2 recycling could be detrimental to innovation and 
commercialization of technologies in this area. Policy experts may want 
to explore the implications of currently proposed actions from this 
perspective.

    Senator Dorgan. Ms. Tatro, thank you very much.
    First, we are working on this issue of carbon capture, and 
most people say carbon capture and sequestration, CCS, they 
call it. And the sequestration side of it really describes a 
mindset. ``Here is what we have to do. We have to figure out a 
way to grab the carbon, separate it, and put it someplace deep 
underground forever.'' I mean, that is kind of the mindset of 
what CCS means.
    The purpose of this hearing is to say I think there is 
another mindset out there that I am much more interested in. It 
is not that I am not interested in sequestration. I am much 
more interested in finding is there a way to take this carbon 
and provide from it beneficial use, which might well allow us 
to cap carbon emissions and actually have very little cost if 
you could find the right kind of beneficial use.
    So the question for all of you is as you watch the Federal 
Government invest in all these things, do you think there is 
largely a bias in favor of sequestration or in geologic issues 
as opposed to other alternatives?
    Because, Ms. Tatro, you just suggested that we are moving 
along here, but other countries are moving perhaps, in some 
cases, faster. Is there a circumstance where you have more 
difficulty in this whole collegiate discussion about carbon 
capture with your approach as opposed to sequestration, Ms. 
Tatro?
    Ms. Tatro. Well, I believe there is a lot of activity being 
looked at now for carbon capture and sequestration, and it is a 
step forward we need to take. I don't believe that the country 
has organized around this idea of recycling carbon dioxide. 
There has been no organized, concerted effort to bring 
innovation, ideas to the table beyond the capture and 
sequestration.
    But I think the science and technology and innovation 
community and the industry and universities have ideas in their 
mind and have talked about them. There is just no concentrated 
way for those ideas to come forward at this point.
    Senator Dorgan. But with the new Secretary of Energy coming 
from a science lab, one would think that this is the time.
    So tell me, Mr. Muhs, what do you think of Dr. Constantz's 
testimony? You are working on a range of things at Utah, but 
you heard Dr. Constantz testify on something I thought was very 
novel and unique.
    Mr. Muhs. My assessment is there is no silver bullet and 
that we should look at biologic approaches as well as chemical 
approaches to sort of, in his case, reuse for in the use of 
cementitious material. So, in my mind, we have to look at all 
of those things. And sort of to follow on with what Ms. Tatro 
said, I think the whole idea of recycling is a mindset, and it 
is one that sort of requires a certain level of osmosis into 
one's mind.
    Obviously, you think about recycling in a very general 
sense, the European countries have done a lot on that in the 
past and just in general sense in things like recycling 
aluminum, things of that nature. So I believe that it takes a 
little time, but I do think we are to that point, and I think 
you are right.
    Senator Dorgan. Mr. Klara, my understanding about algae is 
that some strains of algae--there are many, many, many 
different strains of algae.
    Mr. Klara. Right.
    Senator Dorgan. And so, some would be very productive with 
respect to this and some not. Tell me how we go about 
identifying which would be the productive candidates.
    Mr. Klara. Well, absolutely that is a correct statement. 
And a lot of the algae work that is ongoing right now is 
looking at literally dozens and dozens of different strains to 
find the most robust strain that could have the optimum 
performance under flue gas conditions where they are getting 
the CO2.
    And there are also a lot of nifty approaches coming forward 
with algae as well. One of the issues you have is there is so 
much algae produced, you have to cultivate and remove it to 
keep the algae growing. And so, there is all kind of schemes 
being looked at right now to try to get past that issue so that 
you can have the truly continuous process.
    Senator Dorgan. Where do you think the most successful work 
is going on in algae at the moment on a trial basis? I am 
talking about growing algae and then harvesting the diesel fuel 
and so on.
    Mr. Klara. Well, I think, by far, relative to using carbon 
dioxide from an energy facility and a coal plant, Arizona 
Public Service is showing themselves to be a true leader in 
this area.
    Senator Dorgan. Yes, and I have been out to take a look at 
that. We need to do a lot of everything to find out what works 
and what scales up.
    But Dr. Constantz--yours sounds like a silver bullet. But 
you can take the carbon and with your process turn it into 
concrete, and you have captured all of the carbon, which 
probably has a significant value. You are talking about how 
much you could produce worldwide and so on. When will you be 
able to scale up your process so we understand if this works at 
scale?
    Mr. Muhs says there is no silver bullet, but is yours close 
to a silver bullet?
    Dr. Constantz. Where we are at is we have a 200-acre 
facility next to a 1,000-megawatt powerplant in Moss Landing, 
California. We also have a coal-fired boiler simulator there. 
So we are burning both coal and gas, and we are making cement 
every day. In a batch process, we have been making 5 tons a day 
for several months.
    We have just commissioned a plant, which is a continuous 
process, which runs 24-7 solely on coal, which is producing 1 
ton a day. The large EPC firms working with us say the 
parameters that they are getting from this continuous plant 
will allow them to design and construct a plant of any size.
    Senator Dorgan. And you think this approach is going to 
demonstrate at scale your capability?
    Dr. Constantz. Yes, I mean, I think we are doing that right 
now. And all the----
    Senator Dorgan. Well, if that----
    Dr. Constantz [continuing]. Energy balances look very good.
    Senator Dorgan. I don't mean to interrupt you, but if you 
are doing it right now and it was demonstrated at scale that 
you can produce a product of substantial value and sequester 
virtually all of the CO2 at the same time, it seems 
to me there would be a traffic jam leading right to your office 
of everybody in the world that says, ``You know what? You found 
the silver bullet. We need to do that.''
    Dr. Constantz. In fact, the materials I am pointing out to 
you are highly sought after by the entire construction 
industry, and they are beating a path to our door. I mean, we 
are talking to every major producer of portland cement and 
aggregate in the world.
    And we are talking about the whole fabric of the 
infrastructure here. It is not just a power problem. If you are 
a hammer, everything looks like a nail. And just what you said, 
the goal is not to purify CO2 so you can inject into 
the ground. The goal is to lower the amount of carbon in the 
atmosphere.
    And you need to understand the whole construction industry 
has a huge problem, too. The cement industry, for every ton of 
cement produced, produces a ton of CO2. They are 
under the same problem that the power guys are under. And so, 
they are looking for ways to mitigate their CO2, and 
they see the opportunity to turn this liability into a profit.
    Sixty percent of the aggregate used in northern California 
is imported from British Columbia on barges, and it is all 
limestone. It looks just like this. We can produce it locally 
with the carbon. We are producing in a profitable way.
    And it links in with the water. At our plant in Monterey, 
we have a contract with the local water district because they 
have big problems, and we can lower the energy intensivity of 
their reverse osmosis by 50 percent. So we are actually doing 
it.
    Senator Dorgan. Ms. Tatro, what do you think? I mean, you 
are looking at a lot of different things. Give me your 
assessment of Dr. Constantz's presentation.
    Ms. Tatro. Sir, I think there is tremendous merit to taking 
CO2 and permanently sequestering it in these 
construction materials. I think that is a fabulous idea. I 
think it can be complemented nicely by using CO2 to 
create liquid transportation fuels.
    This is my point in my testimony. I think there are a lot 
of good ideas out there that have not come to the forefront 
because there has not been an organized effort to call for 
these ideas. I think it is a fabulous idea. It would complement 
making transportation fuels very nicely.
    Senator Dorgan. Now you have worked since 1985 for Sandia, 
and you have got a couple hundred people working with you. You 
lead a couple hundred people working on these issues. So you 
have spent a lot of time and a lot of public funding working on 
these issues. Let us fast forward 5 and 10 years.
    Ms. Tatro. Okay.
    Senator Dorgan. And let us say that we really begin to 
focus on all the aspects of carbon capture and also start to 
emphasize beneficial use. Do you think in 5 to 10 years we 
would make significant progress on the beneficial use side?
    Ms. Tatro. I believe we can. I think the 10-year 
timeframe--to answer your question earlier about when the 
maturity of these technologies is going to vary. But a 10-year 
timeframe is a very reasonable timeframe for a target of doing 
some of these concepts in a way that is both affordable and 
technologically feasible.
    I will offer this one caution. Those who are expert in this 
area of policy, such as yourselves ought to be looking at the 
current policies that are being discussed to make sure they do 
not disincentivize the recycling of carbon dioxide as an 
option. That will significantly affect the timeframe in which 
these technologies can be viable.
    Senator Dorgan. Well, this subcommittee is going to try to 
have an impact on that, and we tried to have an impact on that 
in the stimulus bill as well to make sure that most of these 
things tend to move toward the geologic side of things because 
of CCS. So we intend to try to have a significant impact on 
that.
    Senator Bennett?
    Senator Bennett. Thank you very much, Mr. Chairman. And 
thank you for the hearing.
    Thank you to all the witnesses, and a special welcome to my 
fellow alumnus from Utah State University. I became a graduate 
as of last Saturday. They gave me an honorary degree.
    Senator Dorgan. How were your grades?
    Senator Bennett. I, what is the--you pencil-whipped them 
through.
    I would ask that the algae report be part of the record, if 
that has not been done already.
    Senator Dorgan. Without objection.
    [The information follows:]
   Algae Biofuels and Carbon Recycling--A Summary of Opportunities, 
                     Challenges, and Research Needs

                       SUMMARY OF RECOMMENDATIONS

    Congress should support and strengthen policies inclusive of algae 
energy system development in future energy and climate change 
legislation and loan guarantees for commercial demonstrations (EPACT 
2005; title 17).
    Congress should authorize and appropriate funds for a comprehensive 
research, development, and demonstration program administered by the 
U.S. Department of Energy specifically focused on algae energy systems.
  --The program should include a balanced and distributed portfolio of 
        foundational, translational, and transformational research, 
        development, and scalable demonstrations.
  --Fundamental research should provide new knowledge discovery in 
        several areas.
  --Applied R&D should involve laboratory and pilot-scale R&D on all 
        three sub-systems (upstream, cultivation and downstream 
        systems) and interdisciplinary activities that bridge between 
        them.
  --Crosscutting R&D should be included on topics such as advanced 
        materials, instrumentation and controls, systems engineering, 
        and economic modeling.
  --Demonstration and deployment elements of the program should be 
        designed to demonstrate the viability of algae energy system 
        technologies at a scale large enough to overcome real and 
        perceived infrastructure challenges.
  --The largest component of the demonstration and deployment program 
        should be regional partnerships similar to the Department's 
        Fossil Energy ongoing regional programs for geologic 
        sequestration.
  --The program should include initial supporting research on lifecycle 
        analyses.
  --The program should leverage strengths from existing Department 
        programs, establish programmatic roles, and coordinate from a 
        Department-wide perspective.
  --The program should include development of education programs.
Contributors:
Jeff Muhs, Utah State University
Sridhar Viamajala, Utah State University
Barbara Heydorn, SRI International
Mark Edwards, Arizona State University
Quiang Hu, Arizona State University
Ray Hobbs, Arizona Public Service
Mark Allen, Algal Biomass Organization
D. Barton Smith, Oak Ridge National Laboratory
Tim Zink, Sapphire Energy
Dave Bayless, Ohio University
Keith Cooksey, Montana State University
Tanya Kuritz, Oak Ridge National Laboratory
Mark Crocker, University of Kentucky
Sam Morton, University of Kentucky
Jim Sears, A2BE Carbon Capture
Dave Daggett, Boeing
Dave Hazlebeck, General Atomics
Jeff Hassenia, Diversified Energy Corporation

    Disclaimer: The views and opinions expressed in this concept paper 
do not necessarily state or reflect those of the contributing 
organizations and may not be used for advertising, endorsement, or 
other purposes.

                           EXECUTIVE SUMMARY

    The United States of America faces five interdependent challenges 
(described below) that threaten the prosperity and quality of life of 
its citizens. Central to these challenges is the need for domestically-
produced renewable transportation fuels and carbon mitigation 
strategies that are affordable, environmentally-sustainable, and avoid 
interfering with food supplies. This report summarizes opportunities, 
challenges, and research needs for sustainable algae-based biofuel 
production with an emphasis on systems designed for carbon recycling 
from point-source CO2 emitters. It reviews the limitations 
of other biofuel and carbon mitigation options and summarizes how algae 
energy systems can fill a unique niche in both cases. Recommendations 
for a national-scale RD&D program and critical steps leading to robust 
pilot demonstrations by 2015 and integrated systems demonstrations by 
2020 are also provided.




                              INTRODUCTION

    In response to increasing pressure to reduce carbon emissions, 
fossil-fired utilities are pursuing deep geological sequestration as 
the preferred option for handling the enormous quantities of 
CO2 being introduced to the atmosphere (Figure 1). Recent 
analyses indicate that additional options for risk mitigation may be 
necessary, as liability issues for deep sequestration are unknown and 
potentially significant. Industries and utilities face increasing 
difficulty in financing new fossil-fired boilers and electric power 
generators because of uncertainty over CO2 abatement.




Figure 1.--World CO2 Emission by Region as Published in the 
   DOE Carbon Sequestration Technology Roadmap and Program Plan 2007

    Industrial operations, in particular, face serious risk with 
respect to CO2 control. Flue gas separation is expensive and 
access to geological sequestration for smaller emitters is limited and 
costly. Given EPA's new rules for assuring ground water quality, the 
long-term risk to small operations is even more stifling. The lack of 
other options has driven these operations toward natural gas, with 
little possibility of future CO2 control. Natural gas 
boilers emit less CO2 than coal per Btu, but without 
control, long-term CO2 release will continue unabated. 
Natural gas, which has higher value uses in the production of 
fertilizer and in home heating, will continue to rise in price as 
demands increase, resulting in higher food, home heating and 
electricity prices. Without options to mitigate CO2 
emissions, the ultimate loser will be the consumer.
    Compounding the climate change challenge is the worldwide 
dependence on fossil fuels for transportation and home heating. Unlike 
concentrated CO2 sources, homes and vehicles are highly 
dispersed, and it is difficult to visualize viable ways to collect, 
separate, and sequester carbon dioxide from such locations. Instead, 
options that are more viable are sought including replacement of fossil 
fuels with biofuels.
    The U.S. biofuel producers, however, are in the process of shifting 
to new feedstocks because of increasing concerns over the environmental 
and economical impacts of 1st-generation biofuels. Corn and soy-based 
biofuel industries experienced rapid growth from 2002 to 2007, but 
rising corn and soybean prices, volatile petroleum markets, and new 
studies on their carbon footprints have slowed investments. The 
cultivation and harvesting of traditional biofuel crops, long viewed as 
part of the solution to climate change, may actually increase 
greenhouse gas emissions.\1\ Further, the energy density of both corn- 
and cellulosic-based ethanol is considerably lower than gasoline and 
diesel making their widespread use in ground freight and air-
transportation markets highly unlikely.
---------------------------------------------------------------------------
    \1\ Searchinger T, Heimlich R, Houghton RA, Dong F, Elobeid A, 
Fabiosa J, Tokgoz S, Hayes D, Yu T. Use of U.S. Croplands for Biofuels 
Increases Greenhouse Gases Through Emissions from Land-Use Change. 
Science AAAS [Internet]. 2008 [cited April 2009]. Available from: 
http://www.sciencemag.org/cgi/content/abstract/1151861. 
2008;319(5867):1238-1240.
---------------------------------------------------------------------------
    Thus, we are entering an era where several factors are aligning to 
promote the use of algae for photosynthetic mitigation of greenhouse 
gas emissions and production of next-generation biofuels. Algae and 
cyanobacteria offer an alternative and sustainable solution via two 
fundamental routes: (1) value-added sequestration of CO2 
through conversion to stable biopolymers; and (2) displacement of 
fossil fuel use by producing renewable fuels (biodiesel and/or biogas) 
in areas with little plant life. Reported values of algal growth-rates 
and yields indicate a near-term potential for using algal energy 
systems for biodiesel production and carbon recycling from smaller 
CO2 generators such as industrial boilers or fuel-ethanol 
plants.
    Algae energy systems will likely be part of a national/global 
energy security portfolio, resulting in distributed energy systems not 
disadvantaged by CO2 transportation costs to distant 
geological locations, an option not likely viable for smaller-scale 
producers.
    Fundamentally, algae and cyanobacteria use solar energy to 
transform atmospheric CO2 to organic cellular material via 
photosynthesis. Due to their simple biological structure, they convert 
and capture carbon more rapidly than terrestrial plants and store a 
significant amount of carbon as material that can be converted into 
biodiesel, bioplastics, feedstock for gasification, or numerous other 
products. Some algal strains are capable of doubling their mass several 
times a day. Algae can be cultivated on marginal land (and on ocean 
surfaces) using low-quality and or saline waters. In contrast, 
terrestrial sequestration and biofuel production requires fresh water, 
is slower and restricted by the availability of fertile land; 
eventually reaching steady state, with no additional sequestration or 
biofuel production possible.
    While algal products offer the potential to provide sustainable 
solutions for both liquid transportation fuels and CO2 
mitigation, important challenges must be overcome to make them cost-
effective. Unlike terrestrial crops that have been cultivated and 
harvested for centuries, the infrastructure and knowledge needed to 
cultivate and harvest algae using industrial processes is in a pre-
commercial stage of development. For example, within the field of plant 
biotechnology, algal research is one of the least explored fields and 
industrial-scale algal energy systems will benefit greatly from intense 
R&D efforts.
    For these reasons, clearly-defined goals and significant, well-
managed and coordinated Federal investments are needed in areas such as 
CO2 delivery and conditioning; integration and systems 
engineering; energy and water use; algal areal and volumetric 
productivity; cultivation system design; strain optimization; synthetic 
biology; downstream processing; value-added co-product development; and 
carbon life-cycle analysis.

           LIMITATIONS OF OTHER CARBON SEQUESTRATION PATHWAYS

    Figure 2 illustrates the three primary pathways to carbon 
sequestration. Though significant investments and progress in 
developing geologic and chemical carbon mitigation pathways has been 
made, significant hurdles remain.




          Figure 2.--Primary Pathways to Carbon Sequestration

Challenges of Underground Geologic Sequestration
    The problems associated with geological sequestration of 
supercritical CO2 are well documented and reasonably well 
understood; however, there is a significant difference between 
sequestration of CO2 as a gas phase compared a supercritical 
fluid. Gas phase CO2 can be stored in geological formations. 
Large natural CO2 deposits can be found worldwide, much like 
there are large natural gas formations. Gaseous CO2 has been 
successfully used over decades for enhanced oil and gas recovery by 
injection into gas and oil reservoirs, and there is strong evidence 
supporting the ability to store gas phase CO2 for 
significant lengths of time.\2\-\9\&
---------------------------------------------------------------------------
    \2\ Marchetti C. On Geoengineering and the CO2 Problem. 
Climatic Change, 1977;1: 59-68.
    \3\ Baes CF, Beall SE, Lee DW, Marland G. The collection, disposal 
and storage of carbon dioxide. In Bach W, Pankrath J, William J, 
editors. Interaction of Energy and Climate: D. Reidel Publishing, CO; 
1980. p. 495-519.
    \4\ Kaarstad O. Emission-free fossil energy from Norway. Energy 
Conversion and Management. 1992;33(5-8):619-626.
    \5\ Koide HG, Tazaki Y, Noguchi Y, Nakayama S, Iijima M, Ito K, 
Shindo Y. Subterranean containment and long-term storage of carbon 
dioxide in unused aquifers and in depleted natural gas reservoirs. 
Energy Conversion and Management. 1992;33(5-8:, 619-626.
    \6\ Van der meer LGH. Investigation regarding the storage of carbon 
dioxide in aquifers in the Netherlands. Energy Conversion and 
Management, 1992;33(5-8): 611-618.
    \7\ Holloway S, Savage D. The potential for aquifer disposal of 
carbon dioxide in the UK. In: P.W.F. pierce (Ed.), Proceedings of the 
International Energy Agency carbon dioxide symposium, Oxford March 
1993. Energy Conversion and Management. 1993;34(9-11):925-932.
    \8\ Bachu S, Gunter WD, Perkins EH. Aquifer disposal of 
CO2: hydrodynamic and mineral trapping, Energy Conversion 
and Management. 1994;35(4):269-279.
    \9\ Korbol R, Kaddour A. Sleipner West CO2 
disposal:injection of removed CO2 into the Utsira formation. 
Energy Conversion and Management. 1994;36(6-9):509-512.
---------------------------------------------------------------------------
    There are two concerns with gas phase storage of CO2: 
First, at low gas pressures, the capacity of all geologic storage is 
estimated to be only decades of fossil fuel use; Second, CO2 
will remain in the gas phase and ready for release should an accidental 
penetration occur in the formation or a cap rock be compromised. While 
intense management of geological formations should limit this, 
accidental release is a non-trivial possibility.\10\ \11\
---------------------------------------------------------------------------
    \10\ Gunter WD, Bachu S, Benson S. The role of hydrogeological and 
geochemical trapping in sedimentary basins for secure geological 
storage for carbon dioxide. In: S. Baines and R.H. Worden editors. 
Geological Storage of Carbon Dioxide. Technology. Special Publication 
of Geological Society, London, UK. Special Publication; 2004. 233: p. 
129-145.
    \11\ Kaarstad O. Geological storage including costs and risks, in 
saline aquifers, Proceedings of workshop on Carbon Dioxide Capture and 
Storage: Regina Canada; 2002.
---------------------------------------------------------------------------
    Supercritical CO2, or storage of CO2 at 
pressures exceeding the critical point (7.38 MPa), is highly favored 
over gas phase storage because the higher pressure significantly 
increases the holding capacity of the geological formation. Gas 
pressures as high as 80 MPa are being considered for sequestration.\12\ 
Further, supercritical CO2 is more reactive than gas phase 
CO2 and has the ability to chemically join with metals in 
the aquifer (e.g., calcium and magnesium) to form solid carbonates, 
which would be permanently sequestered within the Earth with no chance 
of accidental release.\13\ \14\
---------------------------------------------------------------------------
    \12\ Benson S, Cook P. Underground Geological Storage. In: Metz B, 
Davidson O, de Coninck, Loos HM, Meyer L, editors. Carbon Dioxide 
Capture and Storage (Intergovernmental Panel on Climate Change): 
Washington, DC; 2005. p. 197-278.
    \13\ Perkins E, Czernichowski-Lauriol I, Azaroual M, Durst P. Long 
term predictions of CO2 storage by mineral and solubility 
trapping in the Weyburn Midale Reservoir. Proceedings of the 7th 
International Conference on Greenhouse Gas Control Technologies (GHGT-
7), September 5-9, 2004, Vancouver, Canada. 2005;II:2093-2096.
    \14\ Van der meer LGH. Computer modeling of underground 
CO2 storage. Energy Conversion and Management. 1996;37:6-
8(1155-1160). 14.
---------------------------------------------------------------------------
    Unfortunately, supercritical CO2 is far more problematic 
for storage than gas-phase CO2. Supercritical CO2 
is an extreme solvent and attacks concrete, which is the material of 
choice for capping wells: And, while the time-scales for dissolution of 
the concrete seals may be decades, the supercritical CO2 
will be present for time-scales of centuries to millennia because 
geochemical reactions that form carbonates are very slow. As a result, 
the possibility of leakage through capped wells is potentially high, 
and given the hundreds of thousands of wells that must be drilled, it 
is very likely that leaks will occur.\11\ \15\
---------------------------------------------------------------------------
    \15\ Duguid A, Radonjic M, Bruant R, Mandecki T, Scherer G, Celia 
M. The effect of CO2 Sequestration on oil well cements. 
Presented at 7th international conference on greenhouse gas control 
technologies, Vancouver, Canada, 5-9 September 2004; Paper 123.
---------------------------------------------------------------------------
    Whether the leaks are slow and manageable or rapid and catastrophic 
are key questions. A scenario where a sudden and major leak occurs in 
an area of high population could be catastrophic because CO2 
has a higher molecular weight than air and presents a significant risk 
of asphyxia at very high release rates. Therefore, deep geological 
sequestration will require widespread monitoring over entire 
formations, leading to significant cost.\12\ Further, liability issues 
(should a significant leak occur) must be resolved by legislation, 
because few companies will risk exposure to expensive lawsuits in the 
event of a catastrophe.
    Aquifer poisoning is another significant concern. Supercritical 
CO2 is mobile, and should an underground fissure lead to 
migration of the CO2 from its proposed storage formation to 
a potable aquifer, the potential exists for formation of significant 
quantities of carbonic acid in potable water sources.\12\ \16\ This 
could make the contaminated aquifer unusable until suitable treatment 
technology was applied to neutralize the acid. Neutralizing technology 
is non-trivial, would be very costly, and would take months to 
implement. Populations dependent on that aquifer could be without 
drinkable water for the duration; businesses and organizations that are 
equally dependent on the aquifer for their operation and livelihood 
could be faced with significant revenue losses.
---------------------------------------------------------------------------
    \16\ Strutt, MH, Beaubien SE, Beabron JC, Brach M, Cardellini C, 
Granieri R, Jones DG, Lombardi S, Penner L, Quattrocchi F, Voltatorni 
N. 2003: Soil gas as a monitoring tool of deep geological sequestration 
of carbon dioxide: preliminary results from the EnCana EOR project in 
Weyburn, Saskatchewan (Canada). Proceedings of the 6th International 
Conference on Greenhouse Gas Control Technologies (GHGT-6). Gale J, 
Kaya Y (editors), 1-4 October 2002, Kyoto, Japan, Pergamon, Amsterdam. 
2003;I: 391-396.
---------------------------------------------------------------------------
    Another significant issue for supercritical CO2 storage 
in deep geological formations is corrosion. By injecting supercritical 
CO2 in a saline aquifer, a mixture of corrosive carbonic 
acid and salts would be present in the region of down-hole well 
pipes.\12\ When the supply of injected CO2 is stopped, high 
pressures in the region of the aquifer near the pipe could force that 
corrosive mixture back, which would create the possibility of rapid 
pipe failure. What exactly would happen when a down-hole well pipe 
fails is unknown, but it could range from having to replace more than a 
mile of down-hole well piping to a catastrophic failure of the entire 
injection system.\17\
---------------------------------------------------------------------------
    \17\ Nesic S, Choi Y, Bayless D. Determining the Corrosive 
Potential of Transporting CO2 with Impurities and 
Development of Mitigation Strategies. OCRC-AY07-08;B2-Q3:2008.
---------------------------------------------------------------------------
    Unfortunately, today's carbon capture and sequestration methods are 
also expensive. The Intergovernmental Panel on Climate Change's report, 
Carbon Dioxide Capture and Storage, reports that CO2 capture 
is expected to increase the cost of electricity production by 35-70 
percent for a Natural Gas Combined Cycle (NGCC) plant, 40-80 percent 
for a supercritical PC plant, and 20-55 percent for an NGCC plant. The 
costs of retrofitting existing power plants may be even more expensive 
and carbon dioxide transportation and storage further add to costs.\18\ 
\19\
---------------------------------------------------------------------------
    \18\ iEA GHG, Leading options for the capture of CO2 
emissions at power stations, report PH3/14, IEA Greenhouse Gas R&D 
Programme. Available From: Cheltenham, UK, Feb. 2000.
    \19\ Thambimuthu K, Soltanieh M, Abanades J, Capture of 
CO2. In: Metz B, Davidson O, de Coninck, Loos HM, Meyer L, 
editors. Carbon Dioxide Capture and Storage (Intergovernmental Panel on 
Climate Change). Washington, DC. 107-p. 178.
---------------------------------------------------------------------------
    As much as we must make deep geological sequestration work, the 
potential problems, liabilities, and costs are not minor and it is 
clear that other alternatives must be pursued to mitigate risk.
Challenges of CO2 Transport & Sequestration in Oceans
    Several concepts have also been proposed for CO2 storage 
in oceans. One option considered is injecting CO2 by ship or 
pipeline into the water column at depths of 1,000 meters or more so 
that the CO2 subsequently dissolves. Another option is to 
create underwater lakes where CO2 is piped directly onto the 
sea floor at depths greater than 3,000 meters where CO2 is 
denser than water (and forms a natural lake). In both cases, no one is 
quite sure how to cost-effectively collect, transport, or inject 
CO2, or if the injected CO2 will actually remain 
sequestered. Deep saline aquifer storage depends on supercritical 
CO2 staying in the aquifer for enough time to form stable 
mineral species. Unfortunately, the timescale for that transformation 
is hundreds or thousands of years, and the chance that supercritical 
CO2 will not find a way out without converting to carbonates 
is probably less than is optimistically predicted.
    Other environmental effects of oceanic storage are generally 
negative and poorly understood. Concentrated CO2 kills ocean 
organisms. As CO2 reacts with the water to form carbonic 
acid, H2CO3, the acidity of the ocean water 
increases, which will dissolve the shells of shellfish and corals and 
cause reproductive problems for sea creatures. Consequently, ocean 
storage of CO2 is likely to have several unintended 
consequences.
Challenges of Chemical CO2 Separation and Sequestrations
    Before CO2 can be sequestered in geological or other 
storage sites, it must be purified or enriched beyond the 5-15 percent 
concentration typically found in the products of combustion. The 
concentration of CO2 in combustion gases is relatively low 
because the high concentration of nitrogen in the air used to burn the 
fuel (typically coal or natural gas) remains relatively unchanged 
during the combustion process. Because there is limited space for 
CO2 sequestration and the cost of compression and storage is 
significant, it is not desirable to sequester large volumes of other 
gases with CO2.\12\
    The two primary approaches to purify CO2 for 
sequestration are absorption-desorption separation and oxygen-based 
combustion. Absorption-desorption separation removes CO2 
from the nitrogen and water (the other major constituents in the 
combustion gases). Oxygen-based combustion removes the nitrogen from 
the combustion air before reacting with the coal or natural gas, 
leaving mostly CO2 and water in the combustion products and 
eliminating the need to remove nitrogen, which is not reactive and 
difficult to separate from CO2.\20\
---------------------------------------------------------------------------
    \20\ Kohl, A.O, Nielsen RB. Gas purification, Gulf. Houston: TX; 
1997.
---------------------------------------------------------------------------
    Absorption-desorption based separation of CO2 is a well-
known process. The most commonly employed method in industry uses 
monoethylamine (MEA or amine) to absorb the CO2 from 
combustion gases and, in a separated and heated chamber, strip 
CO2 from the amine as a relatively pure gas. While numerous 
amines have been developed, the energy requirement (primarily for 
stripping) is enormous: DOE has estimated that about one-third of the 
output of a power plant would be necessary to run an amine scrubbing 
system for CO2 separation. This would not only lead to 
significant increase in the cost of electricity, but also of the amount 
of coal needed to produce an equivalent amount of electrical power.\21\
---------------------------------------------------------------------------
    \21\ Alstom Power Inc., ABB Lummus Global Inc. Alstom Power 
Environmental Systems and American Electric Power. Engineering 
feasibility and economics of CO2 capture on an existing 
coal-fired power plant. Report no. PPL-01-CT-09 to Ohio Department of 
Development, Columbus, OH and U.S. Department of Energy/NETL, 
Pittsburgh, PA. 2001.
---------------------------------------------------------------------------
    Oxygen-based combustion is also being considered for implementation 
to produce a sequestration ready CO2 stream.\22\ 
Theoretically, it is much easier to remove water vapor (the other major 
constituent found in combustion gases) than nitrogen. However, even in 
the most optimistic evaluations of implementing oxy-fuel combustion, 
there will be significant amounts of nitrogen found in the combustion 
gases. Unfortunately, power plants are difficult to seal completely 
from air infiltration (need for oxy-fuel combustion) and the retrofit 
costs of such a system, especially the air separation unit required to 
remove the nitrogen from the air, will be non-trivial.\23\
---------------------------------------------------------------------------
    \22\ Babcock Energy Ltd, Air Products Ltd, University of Naples and 
University of Ulster. Pulverized coal combustion system for 
CO2 capture. Final report 2.1.1. Available from: European 
Commission JOULE II Clean Coal Technology Programme--Powdered Coal 
Combustion Project. 1995.
    \23\ Wilkinson MB, Simmonds M, Allam RJ, and White V. 2003a: Oxy-
fuel conversion of heaters and boilers for CO2 capture, 2nd 
Annual Conf on Carbon Sequestration, Virginia (USA), May 2003.
---------------------------------------------------------------------------
Challenges of Other Biological Sequestration Pathways
    Figure 3 illustrates the three primary pathways for biological 
sequestration. Though there has been much discussion and limited 
research on terrestrial and ocean algal carbon sequestration, 
significant hurdles remain.




     Figure 3.--Primary Pathways to Biological Carbon Sequestration

            Carbon Capture by Forests
    Forests are natural carbon dioxide sinks and sequester carbon in 
the cellulosic structure of trees and humus soil. In 2004, forests 
sequestered 10.6 percent (637 teragrams or 637 megatons) of the carbon 
dioxide released in the United States by the combustion of fossil fuels 
(coal, oil and natural gas; 5,657 teragrams or 5.6 gigatons) while 
urban trees sequestered another 1.5 percent (88 teragrams) EPA 
2008.\24\
---------------------------------------------------------------------------
    \24\ Malhi Y, Meir P, Brown S, Forests, carbon and global climate. 
Philos Transact A Math Phys Eng Sci. 2002 Aug 15;360(1797):156.
---------------------------------------------------------------------------
    An average coal-fired power plant produces about 4 million tons of 
CO2 annually (there are about 600 plants in the United 
States): It would require planting 161 million trees to offset each 
plant.\25\ The land, cost and energy required to plant trees to 
sequester significant amounts of CO2 make the approach 
infeasible.
---------------------------------------------------------------------------
    \25\ Union of Concerned Scientists, Clean energy [Internet]. 2008 
[cited April 2009]. Available from: http://www.ucsusa.org/clean_energy/
coalvswind/c01.html.
---------------------------------------------------------------------------
    Typically, carbon stored in soils oxidizes rapidly and reenters the 
atmosphere or water. Carbon captured by forests is typically temporary 
(decades in duration) because many forests burn or are harvested and 
release their stored carbon. Other forests are uprooted by fierce 
storms and the carbon oxidizes. In 2004, Hurricane Katrina killed or 
severely damaged 320 million large trees in Gulf Coast forests.\26\ 
Tropical forests are also poor at retaining carbon long term because 
they tend to have very thin organic mulch on the forest floor; heavy 
rains leach out the carbon and carry it to waterways. Conversely, 
carbon stored in soils as humic acids can sequester carbon for long 
periods and increase the carbon uptake vitality of all types of 
vascular plants.\27\
---------------------------------------------------------------------------
    \26\ NASA, Forests Damaged by Hurricane Katrina Become Major Carbon 
Source [Internet]. 15 Nov 07 [cited April 2009]. Available from: http:/
/www.nasa.gov/mission_pages/hurricanes/archives/2007/
katrina_carbon.html.
    \27\ Wigley TML, Schimel DS. The Carbon Cycle. Cambridge University 
Press: Cambridge; 2000.
---------------------------------------------------------------------------
            Regenerative Agriculture Carbon Capture
    The Rodale Institute reported that regenerative (organic) 
agriculture may sequester up to 40 percent of current CO2 
emissions by plowing organic carbon in green manure (plant biomass) 
back into the soil.\28\ The authors believe that agricultural carbon 
sequestration has the potential to mitigate climate change. They 
believe that organic farming practices can be accomplished with no 
decrease in yields or farmer profits and that organically managed soils 
can convert carbon dioxide from a greenhouse gas into a food-producing 
asset.
---------------------------------------------------------------------------
    \28\ LaSalle T, Hepperly P. Regenerative 21st Century Farming: 
solution to global warming. Rodale Institute, 2008.
---------------------------------------------------------------------------
    Some midwestern soils that, in the 1950s, were composed of up to 20 
percent carbon are now between 1 and 2 percent carbon. This carbon loss 
contributes to soil erosion by degrading soil structure, increasing 
vulnerability to drought, by greatly reducing the level of water-
holding carbon in the soil, and by the loss of soil's native nutrient 
value. Organic farming builds carbon back into the soil, which improves 
the soil as it sequesters the carbon.
    In 2006, U.S. carbon dioxide emissions from fossil fuel combustion 
were estimated at nearly 6.5 billion tons. If a 2,000 lb/ac/year 
sequestration rate was achieved on all 434 million acres of cropland in 
the United States, nearly 1.6 billion tons of carbon dioxide would be 
sequestered per year. This would mitigate about one-quarter of U.S. 
fossil fuel emissions.
    Critics note that the cropland required to grow enough green manure 
for organic fertilizer would take 10 times more cropland than is 
available in North America; which makes large-scale organic farming 
impractical unless an organic fertilizer source can be found that 
requires no cropland and minimal fresh water and fossil fuels. Farmers 
would have to use no-till farming, which is currently used by less than 
5 percent of farmers, in order to ensure the soil is not disturbed and 
the carbon is not oxidized and released as CO2.
            Marine Algae Sequestration
    Even though algae represent only 0.5 percent of total global 
biomass by weight, algae produce about 60 percent of the net global 
production of oxygen, which is more than all the forests and fields 
combined.\29\ Algae's ability to sequester CO2 and produce 
massive amounts of O2 has prompted scientists to theorize 
that propagating algae in large ocean dead zones may be a way of 
sequestering millions of tons of CO2 and adding to 
atmospheric oxygen.
---------------------------------------------------------------------------
    \29\ Hall J. Earthworks & Systems: the most important organism?. 
Ecology Global Network [Internet]. 2008 [cited April 2009]. Available 
from: http://www.ecology.com/dr-jacks-natural-world/most-important-
organism/index.html.
---------------------------------------------------------------------------
    English biologist Joseph Hart theorized in the 1930s that the 
ocean's great desolate zones were rich in nutrients but lacking in 
plankton activity or other sea life because they were iron 
deficient.\30\ Decades later, a series of studies proved the iron 
thesis.
---------------------------------------------------------------------------
    \30\ Jones ISF, Young HE. Engineering a large sustainable world, 
fishery. Environmental Conservation 1997;24: 99-104.
---------------------------------------------------------------------------
    Ocean iron fertilization (OIF) seeds iron in open oceans with 
micrometer-sized iron particles in the form of either hematite (iron 
oxide) or melanterite (iron sulfate). The iron feeds phytoplanktons 
that are in iron deficient blue ocean water. Phytoplanktons grow 
quickly in algae blooms and consume massive amounts of CO2 
that they convert into plant biomass that sinks to the ocean floor.
    Since 1993, 10 international research teams have completed small-
scale ocean trials demonstrating the capability of ocean iron 
fertilization. Ken Buesseler, a scientist of marine geochemistry at 
Woods Hole Oceanographic Institution in Massachusetts, along with other 
scientists, is trying to get approvals and funding for more 
research.\31\
---------------------------------------------------------------------------
    \31\ Buesseler, Ken. et. al. Ocean Iron Fertilization--Moving 
Forward in a Sea of Uncertainty, Science. 2008;319(5860):162.
---------------------------------------------------------------------------
    The Southern Ocean test in 2002 near Antarctica reported that 
between 10,000 and 100,000 carbon atoms are sequestered for each iron 
atom added to the water. Recent work suggests that biomass carbon in 
the oceans, whether exported to depth or recycled in the euphotic zone 
(depth with sufficient sunlight for photosynthesis), results in long-
term carbon storage. Therefore, the application of iron nutrients in 
select parts of the oceans, at appropriate scales, could have the 
combined effect of restoring ocean productivity while concurrently 
mitigating the effects of human caused emissions of CO2 to 
the atmosphere.
    Support for the iron deficiency theory occurred with the 1991 
eruption of Mount Pinatubo in the Philippines. Andrew Watson analyzed 
global data from that eruption and calculated that the eruption 
deposited approximately 40,000 tons of iron dust in the oceans. This 
ocean fertilization event generated a significant global decline in 
atmospheric CO2 and a parallel increase in oxygen 
levels.\32\
---------------------------------------------------------------------------
    \32\ Watson AJ. Volcanic iron, CO2, ocean productivity 
and climate. Nature. 1997;385: 587-588.
---------------------------------------------------------------------------
    Critics worry that seeding the ocean with large volumes of iron 
might have unintended consequences. In a special report, the 
Intergovernmental Panel on Climate Change called ocean iron 
fertilization ``speculative and unproven and with the risk of unknown 
side effects''.

                LIMITATIONS OF OTHER BIOFUEL FEEDSTOCKS

    Biofuels have been identified as one of the key pathways for 
transforming our energy supply away from fossil fuels. The recent 
cultivation of large quantities of biomass for biofuels has led to a 
growing debate over the feasibility and sustainability of biofuels as a 
renewable energy source. Figure 4 shows three primary feedstock options 
for producing renewable liquid transportation fuels. Significant 
investment and technological progress in both food/feed and cellulosic-
based bio-feedstocks have occurred in recent years; however, 
substantial hurdles in certain niche markets remain.




  Figure 4.--Primary Feedstock Options for Producing Renewable Liquid 
                          Transportation Fuels

    Traditional sources of biomass are abundant and include field crops 
such as soybeans and corn; perennial grasses such as switchgrass; woody 
crops such as trees; and other agricultural and forestry residuals. 
Corn and soybeans are examples of so-called first-generation 
terrestrial biofuels because of their use in both food and fuel 
production. Clean-burning ethanol is derived from corn and most 
biodiesel from soybeans. In 2006, close to 5 billion gallons of ethanol 
were produced in the United States, which is 3.6 percent of our annual 
gasoline demand (per volume) and 2.4 percent (per energy).\33\
---------------------------------------------------------------------------
    \33\ Yacobucci BD, Ethanol Imports and the Caribbean Basin 
Initiative. Available from: United States CRS Report for Congress 
(Order Code RS21930); 2007. Available from: http://www.docstoc.com/
docs/779532/CRS-Report-on-Ethanol-Imports.
---------------------------------------------------------------------------
    Limitations of corn ethanol include a considerably lower energy 
density compared to petroleum both on a per volume and per weight 
basis. Thus, ethanol requires more fuel to propel vehicles comparable 
distances. Further, though the growth of corn and soybeans for biofuels 
absorbs as much carbon as biofuel-powered vehicles emit, it does not 
absorb the significant carbon emissions associated with planting, 
fertilizing, harvesting, transporting, processing, and converting 
biomass into fuel. One analysis concluded that it would take over 150 
years for such crops to achieve carbon neutrality.\1\
    These challenges are compounded by our need to both feed and fuel a 
growing global population (projected to be 9 billion by 2050). In 
comparison to less-complex organisms, food crops like corn and soybeans 
grow much slower, and thus, require large quantities of fertile land 
and water, which, in turn, increases food, and water prices. For 
example, the food price index of the Food and Agriculture organization 
of the United Nations rose 36 percent in 2007 after a 14 percent 
increase in 2006 because of--among other things--biofuel production.
    Because of these and other concerns, interest in producing 
cellulosic ethanol from fibrous residue from plants (forestation 
byproducts, corn stalks, wheat straw, and grasses) has grown in recent 
years. The production of cellulosic ethanol, considered a second-
generation terrestrial biofuel because it uses only nonfood feedstocks, 
is still a maturing industry. Though technologies for breaking down 
fibrous material into fuel are still under development, the United 
States could produce 60 billion gallons of ethanol per year by 2030 
through a combination of grain and cellulosic feedstocks, which is 
enough to replace 30 percent of projected U.S. gasoline demand.\34\ 
Further, perennial crops such as switchgrass would hold soil and 
nutrients in place and require lower fertilizer and pesticide inputs, 
thus reducing water quality impacts compared to first-generation 
biofuels.
---------------------------------------------------------------------------
    \34\ Sheehan J. A look back at the U.S. Department of Energy's 
Aquatic Species Program: Biodiesel from Algae. National Renewable 
Energy Laboratory, 1998, Golden, CO.
---------------------------------------------------------------------------
    There are, however, limitations and uncertainties that accompany 
the production of cellulosic ethanol. Anticipated cellulosic crops also 
grow relatively slow in comparison to less complex plants (such as 
algae) and have little history of use in large-scale cultivation. Like 
first-generation biofuels, considerable land, water, and energy is 
required to plant, harvest, transport, process, and convert cellulosic 
biomass into usable fuels. Data on water, nitrogen and other nutrient 
needs, herbicide use, soil erosion, and overall yields are still being 
collected and synthesized. As second-generation biofuels expand into 
regions that do not support high agriculture yields, they could 
dramatically affect water use and damage irrigation introductions.
    Many believe ethanol will become the bridge from petroleum to 
electric-based commuter surface transportation in the coming decades. 
However, because of its relatively low-energy density (compared to 
diesel and jet fuel), ethanol is not likely to emerge as the preferred 
energy carrier in air transportation, ocean shipping or long-haul 
freight movement. For these markets, biofuels derived from oilseeds 
such as soybeans are the preferred alternative because their energy 
densities are comparable to petroleum fuels. Unfortunately, even if all 
of the U.S.'s soybean crop were diverted to the production of 
biodiesel, less than 10 percent of the U.S. diesel fuel needs would be 
met. Clearly, new feedstocks that efficiently produce biofuels that 
have energy densities rivaling petroleum-based products are needed and 
current pathways are falling short.

                  THE PROMISE OF ALGAE ENERGY SYSTEMS

    Aquatic (algae) energy systems have the unique potential to address 
all five of the interdependent challenges facing the United States 
today. They can domestically-produce renewable transportation fuels and 
recycle carbon and do so in a way that is potentially affordable, 
environmentally-sustainable, and does not interfere with food supplies.
    Although there is no single answer to reduce atmospheric carbon 
levels or end our dependence on foreign oil, aquatic-based algal energy 
systems represent a possible partial solution to both challenges. 
Growing algae, the most productive of all photosynthetic life, and 
converting it into plastics, fuels and or secondary feedstocks, could 
significantly help mitigate greenhouse gas emissions, reduce energy 
price shocks, reclaim wastewater, conserve fresh water (in some 
scenarios), lower food prices, reduce the transfer of U.S. wealth to 
other nations, and spur regional economic development (Figure 5).




   Figure 5.--Algae: A Partial Solution to Interdependent Challenges

    Because of its high lipid (i.e., oil) content, affinity for and 
tolerance of high concentrations of CO2, and photosynthetic 
efficiency, algae cultivation results in higher areal yields and liquid 
fuels with a higher energy density than alternatives, see Table 1 and 
Figure 6, respectively.

       TABLE 1.--COMPARISON OF OIL YIELDS FROM VARIOUS FEEDSTOCKS
------------------------------------------------------------------------
                                                             Oil yield
                          Crop                             Gallons/Acre
------------------------------------------------------------------------
Corn....................................................              18
Cotton..................................................              35
Soybean.................................................              48
Mustard Seed............................................              61
Sunflower...............................................             102
Rapeseed/Canola.........................................             127
Jatropha................................................             202
Oil Palm................................................             635
Algae (10g/m \2\/day at 15 percent TAG).................           1,200
Algae (50g/m \2\/day at 50 percent TAG).................          10,000
------------------------------------------------------------------------


                                                          
                                                          

  Figure 6.--Energy Density of Current and Future Transportation Fuels

    For example, Figure 7 shows the extent to which soybeans are 
planted each year across the United States. If all the soybeans grown 
and harvested in the United States each year were converted into 
biodiesel, the resultant fuel supply would accommodate less than 10 
percent of our annual diesel fuel consumption. Conversely, if an area 
roughly equating to one-tenth the land area of Utah were developed into 
algal energy systems, algae could supply all of America's diesel fuel 
needs. Thus, algae are an ideal feedstock for replacing petroleum-based 
diesel and jet-fuel, which have a combined U.S. market approaching 100 
billion gallons per year.




    Likewise, because algal cultivation systems do not need fertile 
soil or rainfall, they can be sited virtually anywhere that five 
fundamental inputs (Figure 8) are present or can be transported. Since 
some algae and cyanobacteria species have a high affinity for 
CO2, siting algal energy systems near centralized 
CO2 emitters is a very attractive option. Research has 
demonstrated that algal yields can be improved dramatically using 
enhanced concentrations of CO2.




                 Figure 8.--Algae Energy System Inputs

Prior Research
    Algal energy systems is not a new research topic. In the 1940s and 
1950s, SRI International and MIT conducted some of the first research 
on algae mass culture, cultivation, and biofuel production. Soon after, 
research at U.C. Berkeley targeted the use of algae for wastewater 
treatment and methane production. In the 1980s, researchers in the 
Soviet Union developed large photobioreactors to grow algae for animal 
feed.
    From 1991-1998, the U.S. Department of Energy supported a 
comprehensive study of algae as a potential biodiesel feedstock through 
its Aquatic Species Program (ASP).\34\ Though the chemistry of algal 
oils was adequate for biodiesel production at the time \34\ \35\ \36\ 
major problems remained with growing and harvesting algal biomass.\34\ 
ASP feasibility studies of large-scale algae production proved the 
concept of long-term, sustainable production of algae, together with 
the twin environmental benefits of (1) extremely efficient utilization 
of CO2 \34\ \36\ and (2) efficient wastewater treatment.\36\
---------------------------------------------------------------------------
    \35\ Chisti Y. Biodiesel from microalgae. Biotechnol Adv 
2007;25:294-306.
    \36\ Benemann JR. Biofixation of CO2 and greenhouse gas 
abatement with microalgae--technology roadmap. NREL Subcontract report 
701000426. 2003.
---------------------------------------------------------------------------
    The ASP studied a specific aspect of algae: their ability to 
produce natural oils or triglycerides. Researchers not only concerned 
themselves with finding algae that produced a lot of oil, but also 
species that could grow under severe conditions (i.e., extremes of 
temperature, pH and salinity). At the outset of the program, no 
collections existed that either emphasized or characterized algae in 
terms of these constraints. ASP researchers set out to build such a 
collection. Algae were collected from sites in the west, the northwest 
and the southeastern regions of the continental United States, as well 
as Hawaii. At its peak, the collection contained over 3,000 strains of 
organisms that were screened using the Nile Red method.\37\
---------------------------------------------------------------------------
    \37\ Cooksey KE, Guckert JB, Williams SA, Callis PR. Fluorometric 
determination of the neutral lipid content of microalgal cells using 
Nile Red. J.Microbiological Methods. 1987; 6:333-345.
---------------------------------------------------------------------------
    After screening, isolation and characterization, the collection was 
reduced to approximately 300 species (mostly green algae and diatoms) 
based on algal yield and Nile Red response. The collection, housed at 
the University of Hawaii, is still available to researchers and remains 
an untapped resource, both in terms of the unique organisms available 
and the genetic resources they represent.
    Prior to the ASP, minimal research had been performed to improve 
oil production in algal organisms. Much of the program's research 
focused on finding the elusive ``lipid trigger''. This trigger refers 
to the observation that, under environmental stress, many microalgae 
appeared to ``flip a switch'' to turn on production of triacylglycerol 
compounds (algal oil or TAG). Nutrient deficiency was the major factor 
studied (along with studies of silicon deficiency in diatoms) but the 
work did not expose overwhelming evidence in support of this trigger 
theory. In fact, some of the ASP research suggested that the trigger 
did not exist.
    The common thread among ASP studies was a trend showing increased 
oil production under stress concurrent with the cessation or slowing of 
cell division. One study reported that preventing cell division by 
inhibiting the tricarboxylic acid cycle increased TAG yield ten-
fold.\38\ \39\ \40\ This led to the hypothesis that TAG accumulation 
was the result of synthesis minus utilization. Algae with a nutrient 
starvation controlled cell-cycle did not show an increase in overall 
production of oil. In fact, overall rates of oil production were shown 
to be lower during periods of nutrient deficiency.
---------------------------------------------------------------------------
    \38\ Thomas RM, Triglyceride accumulation and the cell cycle in 
Chlorella [Thesis]. Montana State University; 1990.
    \39\ Guckert JB, Cooksey KE, Jackson LL. Lipid solvent Systems are 
not equivalent for analysis of lipid classes in the microeukaryotic 
green alga, Chlorella. J. of Microbiological Methods. 1989;8:139-149.
    \40\ Cooksey, KE. Acetae metabolism by whole cells of Phaeodactylum 
tricornutum Bohlin. J. Phucol. 1974;10:253-257.
---------------------------------------------------------------------------
    Another focus of the ASP included initial breakthroughs in 
molecular biology and genetics engineering.\34\
    The program was the first to isolate the enzyme Acetyl CoA 
Carboxylase (ACCase) from a diatom. This enzyme catalyzes a key 
metabolic step in the synthesis of oils in algae. The gene that encodes 
for the production of ACCase was eventually isolated and cloned. This 
was the first report of the cloning of the full sequence of the ACCase 
gene in any photosynthetic organism. Researchers went on to develop and 
patent the first successful transformation system for diatoms--the 
tools and genetic components for expressing a foreign gene.\34\
    In later years, ASP researchers initiated the first experiments in 
metabolic engineering as a means of increasing oil production. They 
demonstrated an ability to make algae over-express the ACCase gene with 
the hope that increasing the level of ACCase activity in the cells 
would lead to higher oil production. These early experiments, however, 
did not demonstrate increased oil production.\34\
    Efforts were also made to demonstrate feasibility of large-scale 
algae production in open ponds. In studies conducted in California, 
Hawaii and New Mexico, the ASP demonstrated the long term, reliable 
production of algae.\33\ Based on results from 6 years of tests run in 
parallel in California and Hawaii, 1,000-m \2\ pond systems were built 
and tested in Roswell, New Mexico. The Roswell tests proved that 
outdoor ponds could operate with extremely high efficacy of 
CO2 utilization. Careful control of pH and other physical 
conditions for introducing CO2 into the ponds allowed 
greater than 90 percent utilization of injected CO2. The 
Roswell test site successfully completed a full year of operation with 
reasonable control of the algae species grown. Single day 
productivities reported over the course of 1 year were as high as 50 g/
m \2\/day. Attempts to achieve consistently high productivities were 
hampered by low temperatures encountered at the site. Desert conditions 
of New Mexico provided ample sunlight, but temperatures regularly 
reached low levels at night. If such locations will be considered, some 
form of temperature control with enclosure of the ponds may be 
required.
    In Japan, a nation-wide algae-based carbon sequestration R&D effort 
was also launched during the 1990s. The program was organized by 
Research for Innovative Technologies of the Earth (RITE) under the 
Ministry of Economy, Trade and Industry (METI). It involved more than 
30 major industrial partners and several major public universities with 
a total funding of over $250 million. The RITE program partially 
addressed a number of R&D challenges including: (1) algae strain 
selection and characterization, (2) photobioreactor design and 
optimization, (3) mass cultivation of algae supplied with 
CO2-rich synthetic or real flue gases from power plants, and 
(4) the development of value-added co-by-products from the algal carbon 
recycling processes. Unfortunately, the research focused heavily on one 
particular photobioreactor design that ultimately proved infeasible.
Recent Research
    In the United States, algae-based research related to carbon 
recycling restarted in 2000 when Ohio University researchers developed 
a technique to control the emissions of CO2 from fossil-
fired power plants by growing organisms on reactor-enclosed biofilms: A 
thermophilic mesophilic organism was examined with respect to its 
ability to recycle CO2 from scrubbed stack gases and 
cyanobacteria was grown on fixed surfaces to facilitate algal stability 
and improve light distribution.\41\ Growth-rates of 50 g/m \2\/day were 
reported, but the lipid content was lower than the rates reported by 
eukaryote algae grown in aqueous solutions.
---------------------------------------------------------------------------
    \41\ Bayless DJ, Kremer G, Vis M, Stuart B, Prudich M, Cooksey K, 
Muhs J. Enhanced Practical Photosynthetic CO2 Mitigation. 
Third Annual Conf on Carbon Capture & Sequestration. 2004:173. 
Available from: http://www.netl.doe.gov/publications/proceedings/04/
carbon-seq/173.pdf.
---------------------------------------------------------------------------
    In 2003, a roadmap outlining short- and mid-term R&D needs for 
carbon dioxide abatement using microalgae was prepared and issued by 
John Benemann on behalf of the International Network for Biofixation of 
CO2 and Greenhouse Gas Abatement with Microalgae, a group 
formed under the auspices of the International Energy Agency (IEA).\42\
---------------------------------------------------------------------------
    \42\ Benemann J, Pedroni PM, Davison J, Beckert H, Bergman P. 
Technology Roadmap for Biofixation of CO2 and Greenhouse Gas 
Abatement with Microalgae. Second Annual Conf on Carbon Capture & 
Sequestration. 2003. Available from: http://www.netl.doe.gov/
publications/proceedings/03/carbon-seq/PDFs/017.pdf.
---------------------------------------------------------------------------
    The roadmap emphasized the use of open pond algae production in 
combination with municipal- and agricultural-waste treatment 
facilities. In such combined systems, algae would be used to accomplish 
wastewater treatment to help subsidize the cost of carbon utilization 
and algae growth. It also emphasized the need for generation of co-
products including fuel, fertilizer and animal feed to add value to 
algal energy systems and provide outlets that could partially displace 
use of fossil sources for these commodities. The use of enclosed 
photobioreactors was considered as a viable option only for small-scale 
growth (e.g., for the production of inoculum for larger-scale open 
systems).
    More recently, research and development has begun at several dozen 
universities and private companies with total Federal, State, and 
private investments in excess of $300 million in 2008-2009. In 
industry, for example, Arizona Public Service began a DOE/NETL-funded 
project to demonstrate CO2 capture by algae using a scalable 
bioreactor integrated with a power plant.
    APS's planned an algal biofuel production system that will use 
modular photobioreactors, algae harvesting systems for dewatering and 
oil extraction, inoculation systems, water/nutrient management, flue 
gas/CO2 management, and instrumentation and controls.
    In academia, for example, the State of Utah is investing over $6.5 
million over 5 years in research at Utah State University on algal 
energy systems.
    Likewise, the Department of Defense has accelerated investment in 
algal RD&D. The Defense Advanced Research Projects Agency (DARPA) 
recently awarded two large contracts aimed at developing and fielding 
large-scale production facilities with aggressive biofuel production 
price targets by 2011. The Defense Energy Support Center recently 
certified an algal oil-based biodiesel and demonstrated a Ford F450 
driven solely from algal feedstock. Boeing Corporation has teamed with 
multiple engine suppliers on similar lab and flight tests using algae-
derived jet fuel.
    Clearly, the promise of algal energy systems is becoming evident 
with growing energy, land, water, and carbon concerns over first- and 
second-generation biofuels; aggressive renewable fuel standards; 
growing acceptance of peak oil; and the oil price shocks of 2008. These 
factors have moved algae energy systems to the forefront of energy 
research.
    Nevertheless, as noted by National Geographic: ``[T]here is no 
magic bullet fuel crop that can solve our energy woes without harming 
the environment, says virtually every scientist studying the issue. But 
most say that algae . . . comes closer than any other plant . . 
.''.\43\
---------------------------------------------------------------------------
    \43\ Feature Article: Biofuels. National Geographic. April 2009. 
Available from: http://ngm.nationalgeographic.com/2007/10/biofuels/
biofuels-text/6.
---------------------------------------------------------------------------
             ALGAE ENERGY SYSTEMS--CHALLENGES AND R&D NEEDS

    Though intermittent investments and progress has been made in 
recent decades, the potential of algal energy systems has yet to be 
fully realized. Unlike terrestrial crops cultivated and harvested for 
centuries, recycling carbon through industrial or agricultural algal 
energy systems that simultaneously produce biofuels is a relatively new 
concept.
    In open algal cultivation systems, a large quantity of land and a 
large volume of water (that must be replenished) are required. Energy 
from outside sources is needed to keep algae cultures stable, healthy 
and suspended in their solution and invasive species, which often 
infiltrate cultivation raceways and lower or destroy the desired 
cultures, must be controlled.
    In most enclosed cultivation topologies, capital costs for 
materials and equipment associated with containing, mixing, 
controlling, and maintaining cultures are prohibitive. In both open and 
closed systems, nutrients and CO2 must be delivered and 
introduced into the growth environment. Likewise, photosynthetic 
saturation and surface shading limit the amount of sunlight that can be 
used constructively to produce biomass.
    After cultivation, the algae must be dewatered and dried prior to 
oil extraction and fuel production. In each step along the way, 
significant energy is required for processing. There are also remaining 
questions regarding the emission of certain criteria pollutants and the 
compatibility of resultant fuels with existing energy distribution/
storage infrastructure, engine systems, and extreme operating 
environments. Generally, the challenges and R&D pathways associated 
with algal energy systems can be divided into three subsystems each 
having a number of issues that must be addressed before commercial-
viability is realized (Figure 9).




          Figure 9.--Three Rationales for Algae Energy Systems

Upstream Challenges & R&D Needs
    To overcome upstream challenges, there are a number of 
CO2 and nutrient-related issues that must be addressed.
            CO2 Quality and Delivery
    For microalgal processes to be considered as practical methods for 
CO2 mitigation, the costs of separating, compressing, 
treating and delivering the CO2 must be reduced. Ideally, 
CO2 could be used directly from an emissions source. 
Unfortunately, that may be impractical. CO2 from a 
combustion source is usually delivered at extremely low pressures and 
cannot be sparged through any depth of water without compression. 
Further, combustion flue gas contains numerous pollutants that would 
not be permitted for wide-spread direct contact and dispersion at 
ground level, including but not limited to mercury, particulate, sulfur 
dioxide, nitrogen-oxides, and heavy metals (notably arsenic and 
selenium).
    The vast majority of CO2 in enhanced gas streams 
(typically >4 percent by volume) is found in combustion sources. It is 
also potentially the lowest cost source of CO2, even lower 
than air, as future carbon restrictions may give non-trivial value to 
removing CO2 from combustion gases. However, unless low-
pressure drop bioreactors are used that can return the remaining flue 
gas and products of photosynthesis to the stack for atmospheric 
dispersion; the options for using direct flue gas become limited. Such 
options include using separated enhanced mass transfer reactors in the 
flue gas train to put carbon species in the aqueous phase for transport 
to a microalgal growth facility.
    Separated and pressurized CO2 from combustion sources 
may or may not be available at low-cost in the distant future, as plans 
are being considered for a supercritical CO2 pipeline 
network. This pipeline is being proposed to facilitate large-scale 
geological sequestration of CO2 though such a network would 
not be ready for operation until 2020. We envision the same 
CO2 piping and distribution schemes could assist the 
deployment of distributed rural algae farms far from urban sources of 
CO2.
    Further, the current cost of CO2 liquefaction would make 
its use cost prohibitive under almost any circumstance. Making such 
sources viable for interfacing with microalgal growth facilities will 
require new research focused on gas cleanup, enhanced aqueous phase 
mass transfer, and/or development of low-pressure drop growth chambers 
where CO2 gases could be easily recovered and dispersed from 
stacks.
            CO2 Sources
    Since CO2 is a major contributor to the cost of algal 
mass cultivation, the CO2 from flue gas is being explored as 
a viable option to reduce cost and achieve economic-viability. In 
addition to CO2 utilization, algae can utilize 
NOX and SOX, reducing overall plant costs by 
bypassing scrubber requirements. A syngas-fed open pond can result in a 
4- to 10-fold increase of algal biomass yields.
    Though commercially-viable biofuels can be produced while recycling 
CO2, NOX and SOX from flue gas, 
several research challenges remain. For example, pipelines have been 
negatively influenced by the interaction of SOX with 
industrial-grade steel joints and pipes. Further, a mismatch of volumes 
and rates of CO2 exhaust exists between large industrial 
coal-powered operations and gas fixation through slower, lower 
throughput processes involving algae. To address flue gas integration 
issues, R&D is needed to address mass transfer limitations (balancing 
CO2 supply with algae growth at minimum system pH 
disruption), CO2 purity requirements for algae growth, and 
analysis of the viability (technical and regulatory) of ground-level 
sparging of CO2 or flue gas into the algal growth media 
(whether for pond-raceway or bioreactor application).
    Another source of CO2 is biorefineries used to convert 
sugars into ethanol and other commodity products: A process made less 
cost-effective because of the release of fixed carbon in form of 
CO2 (e.g., for C6 sugar, carbon losses are 30 percent). 
Thus, recycling and utilizing carbon released via CO2 will 
increase process efficacy. Capturing and recycling of the 
CO2 off-gas has been discussed in scientific literature, but 
practical solutions are still applied on a limited scale and often 
involve collection of CO2 by chemical absorption for pulp 
and paper, and food and beverage manufacturing (e.g., low-value 
product).
    Fortunately, the volumes and rates of CO2 production by 
the biological process of fermentation at biorefineries are more 
closely matched to the rates of biomass production by algae. But 
integrating algae energy systems with biorefineries is limited by site-
specific spatial and climate constraints. For example, past use of 
circular ponds resulted in adequate biomass productivity and captured 
up to 90 percent of the CO2, but required more space and was 
susceptible to contamination and loss of productivity due to overgrowth 
and harvesting problems. Closed bioreactors required less space, were 
well suited for the growth of uncontaminated cultures, and allowed 
easier harvesting; however, light limitations and temperature 
fluctuations effected their productivity.
    Analysis of these data and application of conventional agricultural 
practices to biotechnological processes led the ASP to believe that 
cultivation productivity could be optimized regionally through rotation 
of cultures because algae differ in their illumination and temperature 
requirements. For example, cyanobacterial productivity is higher at 
2000-3000 lux and 30 C, whereas productivity of green algae are 
optimal at 200-300 lux and 26 C. Therefore, R&D on proper selection of 
cultivation system design and optimal crop rotation schemes are needed 
to optimize the productivity of each system.
            Nutrient Sources
    Algae, like any other living organism, require nutrients to 
sustain, grow and thrive. They require the same nutrients as 
terrestrial plants (e.g., nitrogen, phosphorus, potassium and trace 
amounts of iron and other metals, and other fertilizers). In nature, 
these nutrients are readily available via biomass decomposition and are 
stored in aqueous form in bodies of water. However, large-scale, land- 
or ocean-surface based algal production facilities will likely need to 
replenish these nutrients at rates exceeding the naturally occurring 
levels. As man-made fertilizers are increasingly used for large-scale 
algal production, the need for low-cost nutrient supplies will drive 
further research.
    Agricultural wastes provide a readily available source for low-cost 
nutrients. By processing nutrient-rich retention ponds and waste 
lagoons at concentrated animal feed operations, algae can be grown at 
rates needed to achieve economic viability with the benefit of 
significantly reducing water contamination from animal waste. 
Similarly, other agricultural and lawn-based fertilizer runoff into 
wetlands and streams also provides a source for algal nutrients, which, 
if used, could minimize the uncontrolled algal blooms that have damaged 
ecosystems in such places as the Gulf of Mexico and the Chesapeake Bay. 
Therefore, significant research must be conducted to provide stable, 
conditioned, and low-cost nutrient supplies to future algal production 
facilities. Site-specific controls must be developed and implemented to 
monitor and control key inputs to cultivation systems. Establishing 
reliable nutrient sources for mass-algae production will require R&D 
for the development and production of other lower-value phototrophs as 
a feed source, which supports wastewater treatment, and the cultivation 
of strains requiring lower nutrient input.
Cultivation Challenges & R&D Needs
    In addition to overcoming upstream subsystem challenges, there are 
a number of biological, geographical, environmental, and site-specific 
issues that influence algae cultivation.
            Organism Selection
    With over 40,000 species, algae and cyanobacteria exist in many 
forms that can be optimized to grow under specific conditions to yield 
desired products. These organisms evolve naturally and can be 
engineered to meet specific goals. Harnessing the power of these 
organisms to convert CO2 into useful products is 
commercially practiced for the production of neutraceuticals and other 
valuable goods. The production of transportation fuel, which is a 
relatively high-volume, low-value product, will require additional 
research and development to identify or create robust organisms that 
grow and accumulate lipids rapidly under diverse environmental 
conditions. It is unlikely that the ideal production organism has been 
identitified, thus bio-prospecting is still a valuable approach.
    The creation of modified microorganisms that produce valuable 
commercial products previously derived from petroleum is well 
established. For example, Genencor and DuPont received the U.S. 
Environmental Protection Agency's 2003 Presidential Green Chemistry 
Award for the development of a process to make 1,3 propanediol (PDO) 
from renewable resources instead of petrochemicals. The process uses a 
strain of Escherichia coli that was engineered to produce (PDO) from 
glucose.
    Despite some commercial successes, basic research is still needed 
to improve the process of creating synthetic microorganisms. Genetic 
modifications are inherently unstable due to the metabolic costs and 
toxicities associated with the products produced as a result of the 
modifications. Many engineered microbes lose their ability to generate 
product within 1 day of growth unless the modifications are maintained 
with expensive antibiotics. Research to develop general methods and 
principles for stabilizing genetic modifications is critical to 
advancing the practice of metabolic engineering and using this tool to 
capture carbon more effectively. Further, the production of materials 
by microbial biotechnology requires a deeper understanding of the 
biochemistry involved at both the physiological and/or genetic levels. 
It is most important to understand the associated regulatory 
constraints.
    The production of triacylglycerides (TAG) as a precursor of 
biodiesel or biojet fuel will be no different. There is a paucity of 
information on algae in general and almost none on algae poised to be 
considered as production organisms. Thus, further research is needed to 
strengthen our understanding of algae.
            Growth Systems
    Although a discussion of all algae cultivation techniques is beyond 
the scope of this document, two primary architectures for cultivating 
algae exist: open ponds and enclosed reactors.
    Open ponds most closely resemble microalgae's natural environment 
and are relatively inexpensive to build and operate (Figure 10). These 
ponds, however, possess significant drawbacks, including low algae 
production on surface areas, inability to strictly control the algae 
environment, water evaporation, low volumetric cell densities, and the 
risk of contamination by predator strains.




               Figure 10.--Open Algal Cultivation System

    In open raceways, algae are typically suspended at cell densities 
of less than 2 grams per liter of aqueous solution. Unfortunately, low-
cell density cultures require extensive energy to keep algae properly 
suspended, healthy, and well-mixed. Some estimates report that over 
one-half of the energy needed during the cultivation process in open 
ponds can be attributed to mixing and maintaining algae in 
suspension.\37\
    For these reasons, considerable research is now aimed at devising 
low-cost enclosed systems (Figure 11). Relative to open ponds, 
photobioreactors possess a lower risk of contamination, the ability to 
better control and regulate nearly all of the important process 
parameters, a reduced risk of losing CO2 or water to 
evaporation, higher reproducibility, greater productivity (which 
reduces land requirement), and reduced harvesting costs (due to the 
higher cell densities achieved).




              Figure 11.--Closed Algal Cultivation System

    Conversely, the capital and operating costs associated with 
photobioreactor-based cultivation systems are significantly greater 
than those for open ponds. When operating at higher cell densities, 
costs associated with the following become issues: thermal management 
requirements, oxygen accumulation, mixing, and CO2 
management. Biofouling and deterioration of optical materials occur 
over time. Moreover, cell damage due to shear stress from rigorous 
mixing remains a concern.
    Regardless of the cultivation system approach, there are 10 
published essential operational imperatives for successful deployment 
of algae energy systems (Table 2).

    ----------------------------------------------------------------

  Table 2.--The Ten Essentials for Algae Energy Systems--A2BC Carbon 
                                Capture
 ALGAE ENERGY SYSTEMS HAVE THE POTENTIAL TO BECOME ONE OF THE PLANET'S 
     LARGEST INDUSTRIES. FOR THIS INDUSTRY TO BE SUCCESSFUL, CORE 
          TECHNOLOGIES MUST FULFILL 10 ESSENTIAL REQUIREMENTS

    Flexibility in Cultivation and Harvesting.--High algal product 
value requires precise control of cultivation parameters to support 
diverse crop species and varying harvesting protocols. Advanced algae 
variety development will be paralleled by the evolution of process 
pathogens and consumptive invaders. Control and flexibility in the 
growth environment and harvesting is critical.
    Long Term Biologic Stability.--High productivity, profitability, 
and industrial relevance require uninterrupted PBR operation over 
periods of 1 year or more. Threats of bacteriological infection, virus 
infection, weed algae invasion, and rotifer population explosions must 
be sustainably managed in order to provide industrial reliability 
energy and food source technology.
    Efficient Temperature Control.--Broad global deployment requires 
high efficiency utilization of water and energy to control algae farm 
temperatures. Algal photosynthesis captures at most only 5 percent to 
10 percent of the solar energy spectrum. Accordingly, all energy and 
water expended in heating or cooling PBRs will greatly impact the 
overall energy and water balance.
    Functionally Unlimited Scalability.--Algae industry infrastructure 
construction and operations must be viable at any scale using only 
sustainable and abundant global resources. Once the algae industry is 
set in motion via the engine of commerce it will be difficult to stop, 
making it essential that this growth expansion occurs in a planet-
healthy and sustainable fashion.
    High Areal Light Productivity.--High algal biomass productivity per 
square meter of sunlight is required to minimize land area thereby 
controlling high technology infrastructure costs. High technology 
infrastructure elements are required to maximize the productive growing 
season, crop value, and industrial reliability that will be required 
for algae farms to propagate.
    Frequent Cellular Re-Suspension.--During cultivation the entire 
algal cell population must be kept in fluid suspension to provide each 
cell sufficient access to nutrients and light so that a state of 
generalized maximum productive health is maintained. Periodic re-
suspension of settled pockets of stranded cells is required to prevent 
cell death, bacterial growth and PBR crashes.
    Frequent Biofilm Management.--Biofilms are readily deposited on the 
light transmission and containment surfaces of all PBRs. Sustainable 
management of biofilms is required to maximize light transmission 
efficiency and minimize deleterious bacteriological infections. 
Biofilms can provide synergistic benefits and extra biomass 
productivity when well managed.
    Efficient Gas and Nutrient Management.--Every kg of algal biomass 
produced will require more than two kg of CO2 and plant 
nutrients to be fed into the algae PBRs. Energy consumption must be 
minimized in handling these quantities of CO2; and 
especially using flue gas. Sustainable sources and process recycling 
strategies for the vast quantities of nutrients are mandatory.
    Industrial Reliability.--The algae industry must work in tandem 
with upstream and downstream industry partners to convert constant 
process flows of CO2 into feedstocks, refine them into 
products and distribute them to waiting markets. There is no room for 
unreliability or disruption due to weather, infection, regulation, 
terrorism, or scalability challenges.
    Politically Deployable.--There is no more fundamental requirement 
for an algae technology than to be politically deployable on a massive 
industrial scale providing broad local benefits. Deployment and 
operational plans must withstand the muster of planning boards, 
regulatory agencies, funding agencies, lending banks, and environmental 
interests.

    ----------------------------------------------------------------

            Water Use Issues During Cultivation
    Of all the issues facing aquatic algae cultivation, adequately 
addressing water issues may represent the biggest challenge of all in 
open cultivation systems. Simply put, aquatic species need water to 
grow. While the consumption of water by phototropic organisms is 
essential for growth, it is usually less than the amount of water lost 
through evaporation in open raceway cultivation systems.
    This problem is exacerbated by the fact that phototrophic organisms 
need sunlight for photosynthesis. Generally speaking, the more sunlight 
available, the more algae produced. However, as the average solar 
insolation increases, so does evaporative losses in open systems. 
Unfortunately, areas with high solar insolation (e.g., southwestern 
United States) are typically plagued by a shortage of fresh water.
    The lack of fresh water can be overcome by growing algae which is 
native to salt water, brackish, or wastewater. For example, transported 
ocean water could provide the basis for large-scale algal ponds in the 
American West. However, because the rates of water evaporation are 
significant, a supply of fresh (or very low salinity) water remains 
critical. Because salt remains in the ponds as water evaporates, 
addition of more saline water would lead to an increase in salinity 
levels, endangering algae, or reducing their productivity. Further, 
salt-water intrusion could lead to adverse effects on the quality of 
surface and ground water. While these problems are surmountable, they 
represent an engineering and biological challenge for future large-
scale algal production. Solutions could come from development of algae 
strains capable of living in hyper saline waters (note, research has 
already begun) or through the development of low-cost partial 
desalination processes (e.g., membrane filtration).
    Most experts also believe that early algal production facilities 
will depend heavily on wastewater reuse both for nutrients and to 
conserve/reclaim fresh water (discussed earlier). Regions with less 
solar insolation and more fresh water could find economically 
competitive niches in algae production alongside regions with abundant 
sunlight and limited fresh water. Ultimately, the issue of water will 
force developers to evaluate trade-offs between:
  --The cost of supplying of suitable water vs. the availability of 
        other cultivation inputs (e.g., nutrients, CO2, and 
        sunlight); and
  --Low-cost open cultivation systems that rely on passive thermal 
        management through evaporative cooling vs. more expensive 
        closed bioreactors that conserve water but require, for 
        example, active thermal management.
    While no one knows how these issues will be resolved, the 
development of regional strategies leading to a national network of 
distributed algal production facilities seems likely. To reduce water 
consumption, it is also imperative that research continue on pathways 
to improve volumetric yield (i.e., grams of algae harvested per liter 
of aqueous solution). As volumetric yield increases, the amount of 
water needed to produce the same amount of biomass decreases. 
Unfortunately, surface-shading increases as cell density increases so 
inexpensive methods to dilute sunlight spatially over a larger surface 
area also must be developed.






  Figure 12.--Technical Challenges on R&D Pathways for Cost-effective 
                          Algae Energy Systems

            Land Use Issues
    The amount of land available for siting algae energy system 
projects represents a significant challenge. Though algae grow 
extremely fast in comparison to higher plants and, therefore, require 
far less area to grow an equivalent amount of biomass, to overall 
conversion efficiency of sunlight to biomass remains relatively low 
(typically less than 4 percent).
    Table 3 provides a first-order estimate of the amount of surface 
area required to recycle carbon from various point source and 
distributed carbon emitters. The data does not take into consideration 
externalities such as the area needed for roads and processing 
equipment and assumes optimistic algae yields of 40 g/m2/day (dry 
weight) and 50 percent of the biomass as carbon.

    TABLE 3.--SURFACE AREA EQUIVALENT REQUIRED TO RECYCLE CARBON FROM
          VARIOUS POINT SOURCE AND DESTRIBUTED CARBON EMITTERS
------------------------------------------------------------------------
                                   Approximate Area       Rough Area
         Carbon Emitter                Required           Equivalent
------------------------------------------------------------------------
Ethanol plant (50 million gal/    100 acres.........  \1/3\ of the
 yr).                                                  National Mall
Typical industry boiler.........  800 acres.........  2 National Malls
Power plant (500 MWe)...........  35,000 acres......  Washington, DC
U.S. diesel vehicle fleet.......  5,000,000 acres...  \1/10\ of North
                                                       Dakota or Utah
U.S. coal power plants..........  22,000,000 acres..  Indiana or Maine
                                                       (\1/100\ of the
                                                       U.S.)
------------------------------------------------------------------------

    From these estimates, it is clear that large-scale algal energy 
systems, though dramatically less area-intensive than oilseed crops 
such as soybeans (Figure 7), will require significant amounts of land. 
When sited near point source emitters (e.g., ethanol plants or 
industrial boilers), nearby land must be relatively flat (less than a 2 
percent slope) to avoid cost-prohibitive site preparation. Large areas 
covered with open ponds or enclosed photobioreactors will inevitably 
disrupt the natural habitat of native wildlife (discussed in section 
V.B.5). For these reasons, significant research is needed to develop 
both biological and engineering pathways to improve area yield.
    In coastal regions of the United States and Europe, land use issues 
have driven some of the research community to contemplate ocean-
deployed enclosed cultivation systems where unused areas of ocean are 
readily available, seawater is both abundant and provides thermal 
stability, and natural wave action that can be used to aid in mixing. 
Though the challenges differ from land-based architectures, ocean-based 
systems have a host of biological, engineering and environmental 
challenges that must be addressed (e.g., new problems related to ocean 
wildlife impacts, cultivation, harvesting, and processing 
infrastructure, access, shipping, durability, and control).
                Wildlife Impact Issues
    In recent years, there has been increasing interest in siting 
large, industrial-scale renewable electric generation facilities 
similar in size and scope to those envisioned in the western United 
States for algal energy systems. As a result, the Western Governors' 
Association (WGA) and U.S. Department of Energy initiated the Western 
Renewable Energy Zones (WREZ) initiative in 2008. The WREZ initiative 
is designed to identify areas in the West with significant renewable 
resources to accelerate the development of renewable energy. One of the 
renewable technologies included in the study is large-scale solar 
thermal electric generation systems. Though there are several 
differences, this technology has many of the same needs as algal energy 
systems requiring large-tracts of accessible flat land with significant 
solar insolation.
    In parallel to the WREZ process, WGA also established the Western 
Governors' Wildlife Council (WGWC) to manage the implementation of the 
WGA Wildlife Corridors report. The mission of the WGWC is to ``identify 
key wildlife corridors and crucial habitats in the West and coordinate 
implementation of needed policy options and tools to conserve those 
landscapes.''
    As the WREZ process unfolds, resolving inherent conflicts between 
wildlife corridors and renewable energy zones has emerged as arguably 
the biggest hurdle to Western U.S. renewable energy development. The 
same series of issues will need to be addressed in early deployment of 
algal energy systems.
            Other Permitting, Policy and Acceptance Issues
    Another major obstacle for algal growth systems, especially at 
large-scales, will be permitting issues. In addition to the 
environmental impact of the footprint needed for significant 
CO2 mitigation and biofuel development, the issues of water 
quality, gaseous discharge, contamination of regional waterways by salt 
water, and invasive or genetically altered species, are all non-trivial 
considerations.
    Efforts must be made to work with local, State and Federal 
officials to develop streamlined environmental impact assessments and 
permitting reviews. Action will be needed sooner, rather than later, 
because this is essentially uncharted territory for environmental 
protection boards and agencies. This suggests the need for aggressive 
actions to develop new regulatory and policy guidelines.
    Efforts are already underway to incentivize development and 
integrate algae into the U.S. renewable fuels portfolio. For example, 
the Energy Independence and Security Act of 2007 added algae to the 
list of feedstocks qualifying as renewable biomass, which qualifies it 
to help meet Federal Renewable Fuel Standards. In the near future, 
standards organizations must begin developing certification and 
qualification processes so end-users can justify switching to algae-
based fuels and co-products.
Downstream Challenges and R&D Needs
    In addition to overcoming issues related to upstream and 
cultivation subsystems, there are a number of engineering challenges 
related to cost-effective downstream processing.
            Harvesting/Drying
    The isolation of algae from their culture medium is challenging for 
two main reasons: (1) their small size (typically 3-20 microns); and 
(2) the low concentrations in which they can be grown (typically less 
than 2 g algae/L water). A compounding problem is the sensitivity of 
the cell walls in many species to damage in high shear processes (e.g., 
centrifuging), which can result in leaching of the cell contents. To 
date, three main methods have been developed for algal isolation: 
filtration, centrifuging and flotation. Filtration is normally 
performed using a cellulose membrane and a vacuum being applied in 
order to draw the liquid through the filter.\44\ Although this method 
is simple, the membrane tends to become clogged, rendering the process 
extremely time consuming. Centrifuging, in a continuous or semi-
continuous process, appears to be more efficient in this regard; 
however, it is extremely energy intensive and cannot readily be scaled 
to very large applications. The third option, flotation, uses a bubble 
column. Gas is bubbled through the algae suspension, creating a froth 
of algae that can be skimmed off. Several variants of this process have 
been published.\45\ \46\ \47\
---------------------------------------------------------------------------
    \44\ Clark WJ, Sigler WF. A method of concentrating phytoplankton 
samples using membrane filters. Limnol. Oceanogr. 1963;8:127-129.
    \45\ Guelcher SA, Kanel JS. U.S. Patent 5,776,349. 1998.
    \46\ Guelcher SA, Kanel JS. U.S. Patent 5,910,254. 1999.
    \47\ Borodyanski G, Konstantinov I. U.S. Patent 6,524,486. 2003.
---------------------------------------------------------------------------
    The extent to which the water content of the resulting algae paste 
must be reduced depends largely on the method used for the subsequent 
oil extraction step. Ideally, drying to ca. 50 percent water content is 
required in order to produce a solid material that can be easily 
handled. Given the fact that algae paste, as obtained by centrifuging 
or filtering, typically consists of ca. 90 percent water, drying algae 
is an energy intensive proposition. Consequently, solar drying is the 
main approach that has been considered to date.\48\ Solar drying is 
used commercially for drying grains and timber, and is inherently 
inexpensive; however, drying large quantities of algae would 
necessitate the use of a considerable areas of land.
---------------------------------------------------------------------------
    \50\ Kadam KL. Microalgae Production from Power Plant Flue Gas: 
Environmental Implications on a Life Cycle Basis. Department of Energy, 
National Renewable Energy Laboratory. NREL/TP-510-29417, 2001, Golden, 
CO.
---------------------------------------------------------------------------
    Considering the methods available for algae harvesting, it is clear 
that more research is needed in order to improve efficiency and to 
reduce the required energy input. Flocculation appears to be a 
promising alternative to the technologies described above, providing 
that the necessary flocculants are either very inexpensive or can be 
recycled. Rather than using solar energy for subsequent dewatering/
drying of the algae, a better approach might be to develop processes 
that make use of low-grade waste heat from an existing CO2 
source (e.g., power plant).
            Oil Extraction and Product Generation
    Oil extraction from algae is a highly debated topic: Several 
methods exist and each has its advantages and drawbacks.\49\ The three 
primary methods applied to date are (1) expeller/press, (2) solvent 
extraction, and (3) supercritical fluid extraction. The expeller/press 
method, while simple, requires dried algae and typically recovers ca. 
70-75 percent of the oil. In contrast, solvent extraction is more 
complex but is able to recover nearly all the oil (>95 percent). If wet 
algae are used, then a water miscible co-solvent is necessary; this co-
solvent is usually required in order to lyse the cells (i.e., open the 
cells to expose their contents), although other methods are available 
to do this (e.g., sonication or acidification). Finally, supercritical 
fluid extraction uses supercritical CO2 as the extraction 
solvent. While this method is able to recover almost 100 percent of the 
oil, it requires high-pressure equipment.
---------------------------------------------------------------------------
    \49\ Oilgae Digest [Internet]. Copyright 2006 [cited April 2009]. 
Available from: http://www.oilgae.com/algae/oil/extract/extract.html.
---------------------------------------------------------------------------
    Thus, the recovery of algae oil is an area where there is a 
pressing need for research. Solvent extraction appears to be the 
leading approach, given that it is suitable for use with wet algae. 
However, several of the literature methods use complex solvent mixtures 
and/or environmentally unfriendly chlorinated solvents, while overall 
there is a relative paucity of published data.\50\ Complicating the 
situation is the fact that optimization of the extraction process will 
likely depend on a number of variables, such as the algal water 
content, and the ease with which the cells can be lysed (which is a 
function of the species of algae). The development of a generic set of 
principles that can assist in this optimization process is a pressing 
need.
---------------------------------------------------------------------------
    \50\ Guckert JB, Cooksey KE, Jackson LL. Lipid solvent Systems are 
not equivalent for analysis of lipid classes in the microeukaryotic 
green alga, Chlorella. J. of Microbiological Methods, 1989;8:139-149.
---------------------------------------------------------------------------
    As with vegetable oils and animal fats, options exist for the 
production of biofuels from algae oil: (1) transesterification with 
methanol to give to fatty acid methyl esters (biodiesel); and (2) 
conversion to hydrocarbon fuels (e.g., jet fuel or diesel). 
Transesterification is a well-established technology, while the 
catalytic conversion of triglycerides to hydrocarbons via hydrotreating 
has been recently commercialized.
    In most scenarios, the solid recovered from the oil extraction 
process (algae cake) will be used either as animal feed, as a feedstock 
for fermentation to ethanol, or thermo-chemical conversion into other 
fuels. The ability to use the cake as feed will depend on its 
nutritional content and whether there is contamination by heavy metals 
(e.g., Hg and As). Further, the oil extraction process can effect the 
nutritional content: If the cells are lysed in the presence of water, 
there is the risk that a significant fraction of the nutrients in the 
cell will be leached into the aqueous waste phase and lost.
    JP-8 military jet fuel (i.e., the military version of civilian-
grade Jet A-1 turbine-engine fuel) can be produced from the algae oil. 
Algae can also be cultivated to serve many other commercial products 
including: (1) Animal feed, (2) bioplastics, (3) paints, dyes and 
colorants, (4) lubricants, (5) cosmetics, (6) neutraceuticals, and (7) 
pharmaceuticals. Aside from co-products, algal carbon recycling 
processes will likely find increased use in co-located pollution 
control applications (e.g., fertilizer runoff reclamation and sewage 
treatment).
    Thus, in the area of algal oil processing to fuels, the main 
research requirements concern the production of hydrocarbon fuels. 
Research needs include the optimization of catalysts for hydrotreating 
algal oil, and the development of processes that do not require 
hydrogen (e.g., those based on cracking or hydrolysis to fatty acids 
followed by decarboxylation). These latter processes have the advantage 
of being amenable to on-site oil processing. Simultaneously, if the 
algae cake is to be used as animal feed, research will be required in 
order to ascertain the extent to which algal bio-accumulate heavy 
metals present in flue gas (e.g., from coal-fired power plants) and, if 
possible, identify species which show little or no tendency towards 
bioaccumulation. There are also challenges and research needs related 
to ensuring compatibility of resultant fuels with existing energy 
distribution/storage infrastructures, engine systems, and extreme 
operating environments.
Cross Cutting Technical Challenges & R&D Needs
            Materials
    As with any large-scale technological development effort, advanced 
coatings and materials are needed to improve various component- and 
process-level functions. In certain cultivation systems, new polymers 
that enable the creation of super-hydrophobic coatings capable of 
reducing hydrodynamic drag and cleaning requirements are needed, as are 
low-cost, spectrally selective thin films used to reject infrared and 
ultraviolet solar radiation. In some cultivating environments, new 
optical components should be considered (e.g., planar waveguides) to 
improve areal and volumetric yield through enhanced sunlight 
distribution and utilization.
    In downstream processing systems, new materials and coatings will 
be necessary to address compatibility issues with energy distribution/
storage infrastructures, engine systems, and extreme operating 
environments.
            Process Control and Monitoring
    There are a number of complex challenges related to process control 
and monitoring of subsystems and at the interfaces between each 
subsystem. Similar to other industries, this will require the 
development optimization of a wide variety of pumps, mixing apparatus, 
thermal management systems, new instrumentation, control systems, and 
process algorithms.
            Systems Engineering and Integration
    There are two primary-systems integration issues related to algal 
energy systems. The first is within the algal cultivation facility 
itself where integration of such elements as sunlight transmission 
systems, nutrient delivery systems, harvesting systems and pH 
management systems is needed. This is complicated by higher-level 
system integration issues (i.e., the cultivation system coupling with a 
CO2 source and the integration of the microalgal growth 
facility with downstream use/processing systems). For example, an 
algal-based system could be used to recycle the CO2 emitted 
from a coal-to-liquids plant that, in turn, uses the residue from the 
algae as a gasification feedstock (with the coal) to produce liquid 
transportation fuels. Another example would be to use algal energy 
systems to recycle CO2 from bio-digesters, use nutrient-rich 
digester sludge to fertilize algae, and use the waste matter, after 
processing high-value products from the algae, as an input to the bio-
digester to make additional biogas. These examples point to integration 
issues of significant scale.
            Economic Challenges
    Cost estimates for large-scale microalgae production and carbon 
recycling has evolved considerably since the 1970s and 1980s. A 
powerful conclusion from these early analyses was that there was little 
prospect for any alternatives to the open pond designs, given the low 
cost requirements associated with fuel production and limited knowledge 
of externalities related to extensive water use and wildlife impacts. 
At that time, the driving cost factors were considered to be 
biological, and not engineering- or environmentally-related. The 
analyses pointed to the need for highly productive organisms capable of 
near-theoretical levels of conversion of sunlight to biomass. Even with 
aggressive assumptions about biological productivity, the studies 
reported that projected costs for biodiesel were much higher than 
petroleum diesel fuel costs.
    Today, the economics of algal energy systems is known to be more 
complex and evolving rapidly. For example, new inputs to cost models 
including carbon recycling and environmental reclamation opportunities 
must be considered.
    Regardless of technological and biological breakthroughs or carbon 
mandates, the fact remains that the commercial marketplace will not 
have an appetite for funding capital-intensive energy projects unless 
the risk-return ratio is acceptable to debt and equity financiers. A 
number of companies and government organizations have recently assessed 
different input models and production designs and offered estimates of 
costs for algal systems. The most popular of designs recently analyzed 
include stand-alone open ponds, open raceways, and closed 
photobioreactor cultivation systems.
    Generally, these assessments have taken a first-order look at 
capital and operations and maintenance (O&M) costs. The capital costs 
are usually divided into costs associated with algal biomass growth, 
harvesting, dewatering, and algal oil extraction systems. In addition, 
there are more traditional project costs to include (e.g., engineering, 
permitting, infrastructure preparation, balance of plant, installation 
and integration, and contractor fees). O&M costs generally include 
expenses for nutrients (generally N-P-K), CO2 distribution, 
water replenishment, utilities, components replacement, and labor 
costs. In addition to capital and O&M costs, the costs of the land 
(owned or leased) must be considered.
    Publicly released data reveal significant variations in capital and 
O&M costs. Some entities have reported capital costs as low as $10k/
acre, while others have shown costs approaching $300k/acre. These wide 
variations in costs are also seen in O&M projections. For example, 
Sandia National Laboratories and National Renewable Energy Laboratory 
recently conducted an assessment of previously reported, open 
literature and concluded that average capital costs were roughly $57k/
acre (with a 1-sigma standard deviation of $72k/acre) of utilized 
surface area and corresponding annual O&M costs were $27k/acre 
(standard deviation of $25k/acre).\51\ This data represents over a 
dozen different types of open and closed architectures. Some of the 
data was older and does not reflect the results being achieved today. 
It is challenging, therefore, to estimate the costs of such systems. 
This uncertainty has been driven by three fundamental factors: (1) 
There are no large-scale commercial algal biofuels production systems 
with which to develop and substantiate the data; (2) the companies 
developing new technologies and architectures are very protective of 
their detailed financial data; and (3) because of the immaturity of the 
market, there are many unknowns coupled with a number of companies 
making aggressive claims.
---------------------------------------------------------------------------
    \51\ Phillip T, Pienkos. Historical Overview of Algal Biofuel 
Technoeconomic Analyses. National Algal Biofuels Technology Roadmap 
Workshop, December 9-10, 2008.
---------------------------------------------------------------------------
    Instead of forecasting the likely capital and O&M costs for a given 
architecture and its reported yield, this report assesses what a 
project would require in terms of cost to achieve commercial viability. 
That is, using traditional discounted cash flow analyses, along with 
justifiable assumptions on yields and revenues from algal biomass; what 
would the capital and O&M costs need to be to satisfy the demands of 
those financing an algae biofuels project?
    Figure 13 illustrates the results. The vertical axis represents the 
total installed costs of a project including of the cost of the land, 
capital equipment, installation, and other traditional project costs as 
described earlier. The land accounted for here represents the utilized 
surface footprint of algal biomass growth systems undergoing 
photosynthesis, not the gross land area. This approach likely 
underestimates the true land costs as there will be tracts of acreage 
(sometimes as much as 2X) not directly contributing to photosynthesis, 
but instead providing for access ways, harvesting, dewatering, oil 
extraction, piping and plumbing, storage, laboratory space, and other 
functions.\52\ The horizontal axis represents O&M costs as discussed 
earlier.
---------------------------------------------------------------------------
    \52\ Hassannia J. Diversified Energy Corporation. 
SimgaeTM Algal Biomass Production System. [cited April 
2009]. Available from: www.diversified-energy.com/simgae.




 Figure 13.--Project Economic Analyses Used to Assess the Viability of 
---------------------------------------------------------------------------
                        Commercial Algae Systems

    The diagonal lines on the graph depict what are called zero net 
present value (NPV) curves. These lines represent what a project would 
need to achieve in total installed and O&M costs to be economically 
viable from a commercial market perspective. Based on the economic 
assumptions shown in the figure, projects that achieve costs on or 
below these NPV lines will provide the required returns. If a project 
falls on the line, it will return 30 percent (average) per annum to 
equity providers and 12 percent (average) per annum to debt providers 
over the 20-year project life. If a project is above the line, it will 
fail to meet these required returns. If below the line, a project will 
provide additional profit.
    Note that the orange line represents a yield of 25 grams/m \2\ per 
day and a sales price of $200 per dry ton of biomass produced. While 
yield projections are a subject of major debate and speculation, this 
productivity level represents what most experts would consider as a 
reasonable and substantiated expectation using today's technology; one 
that is plausible for future large-scale algal production systems with 
sustained operations. Likewise, $200/ton is a metric often quoted and 
likely represents the low-end of revenue potential by simply assuming 
$0.10/lb, which can be considered the median for estimates of algal 
biomass usage as a high antioxidant animal or fish feed (generally 
quoted as somewhere in the range of $0.07-$0.13/lb).\53\
---------------------------------------------------------------------------
    \53\ Gieskes TE. Organic Fuels Holdings, Inc., Integrated 
Biorefineries [Internet]. March 2008 [cited April 2009]. Available 
from: http://www.organicfuels.com/library/art/
Organic%20Fuels%20Presentation%20FO%20Lichts%202008%2004%2023.pdf.
---------------------------------------------------------------------------
    Thus, the solid orange line illustrates the magnitude of the 
challenge. Very few organizations have discussed total installed costs 
of less than $40k/acre. For reference, the Sandia and NREL data point 
is plotted on the figure as a red circle.
    When O&M costs are factored into the analyses, a project must reach 
the orange line, which lowers total installed cost hurdles. For 
example, fertilizer such as N-P-K costs approximately $300-$400/ton. It 
is reasonable to assume that an average algae strain will require 1 ton 
of fertilizer for every 3 tons of dry algal biomass produced. At a 
productivity of 25 grams/m \2\-day, annual fertilizer costs alone would 
easily equate to over $4k/acre unless inexpensive nutrient-rich 
wastewater were used. Very sizeable energy costs also need to be added 
for pumping and flowing water, capturing and delivering CO2, 
and harvesting the algae and extracting the oils. Finally, labor, water 
composition, and hardware replacement costs need to be considered. It 
is easy to see how O&M costs alone can derail a project's viability 
regardless of how low (even to zero) total installed costs become, as 
evidenced by the Sandia/NREL O&M average being off the graph's scale at 
$27k/acre-year.
    The solid green NPV line represents a more reasonable analysis for 
algae biomass systems focused on biofuels production. In this case, 
algae being grown contain 25 percent total lipid content, of which 80 
percent is extractable and of the desired characteristics (i.e., non-
polar lipids) for biofuels production. Twenty-five percent of total 
lipid content represents a reasonable and substantiated claim for an 
alga strain that can be grown abundantly, at large scale, in outdoor 
systems today. In this scenario, for every ton of algae produced, 400 
pounds of oils for biofuels and 1,600 pounds of biomass for animal/fish 
feed would then be available. Assuming $2/gallon for the oils sold, and 
$0.10/lb for the remaining biomass, this equates to roughly $266/ton 
for the algae produced. Based on the earlier discussion of O&M costs, 
one can quickly see that even at $266/ton the economics appear very 
challenging given the state of the industry today and for the near-term 
future.
    Also note that the NPV lines such as the solid blue or dashed green 
line, begin to show an entirely different and much more plausible story 
for the potential of algal biofuels. The blue line represents achieving 
almost twice the dollar/ton sales price of algae biomass discussed 
previously. How might this be possible? Using the same assumptions as 
earlier, algal oil would have to be sold for prices in excess of $6/
gallon, which could be possible should corresponding petroleum prices 
reach these levels. Alternatively, this could be achieved by focusing 
on strains and production architectures that extract other, higher-
value components from the algae such as nutraceutical products. The 
dashed green curve represents the same assumptions as the solid green 
line, but in this case assumes achieving productivity numbers twice 
that deemed reasonable today (i.e., 50 grams/m \2\-day).
    The eventual answer will likely be a combination of greater 
productivity coupled with a focus on co-generation of higher value 
products from algae and carbon credits. In addition, emphasis needs to 
be placed on reducing O&M costs across all elements of the algae 
production value chain.
    By assessing the viability of algae projects from a true market 
perspective, it is apparent that total installed and O&M costs will be 
a major hurdle to future commercialization. Technologies must be 
developed to reduce costs and increase yields. This can be accomplished 
only through a focused, comprehensive, and well-funded R&D program. In 
parallel, the industry must consider business models that not only look 
at the bioenergy potential of algae through the transportation fuels 
market, but also consider carbon recycling, wastewater treatment, and 
higher-value products in order to achieve economic viability. Finding 
niche markets that take advantages of these opportunities will be 
important in the early phases of this promising, yet challenging 
industry.
            Carbon Life-Cycle Assessment
    It is critical for the development of algal production technologies 
that accurate, industry-wide methodologies exist for estimating of 
carbon lifecycle impacts. Because this industry is in its infancy, 
these impacts are poorly understood and present significant hurdles for 
various approaches to the bio-fixation of CO2 using algae. 
Likewise, there remains a wide array of unanswered issues related to 
large-scale algae production on human health, wildlife, and the 
environment. If problems arise during the implementation stage of an 
algae-based biofuel production process, they may be costly to correct 
(if, indeed, a correction is even possible). Therefore, future LCA 
activities should build upon the limited studies that currently 
exist,\48\ \54\ \55\ but not be dependent on either the fundamental 
datasets or results presented.
---------------------------------------------------------------------------
    \54\ Aresta M, Dibenedetto A, Barberio G. Utilization of macro-
algae for enhanced CO2 fixation and biofuels production: 
Development of a computing software for an LCA study. Fuel Processing 
Technology. 2005;86:1679-1693.
    \55\ Life Cycle Assessment: Principles and Practice. Available 
from: U.S. Environmental Protection Agency, Office of Research and 
Development, National Risk Management Laboratory. EPA/600/R-06/060, 
2006, Cincinnati, OH.
---------------------------------------------------------------------------
    The earlier analyses all suffer from a few fundamental issues that 
limit their usability for the present and future development of algae 
based biofuel production. At a fundamental level, none of the available 
LCAs direct their focus robustly at the production of algae in a manner 
that would lead to sensible process development activities.
    In order to achieve a more robust and useful assessment tool, a 
base LCA should: (1) Define the metrics to be used for analysis of 
future LCA activities in the base LCA to ensure an equivalent 
comparisons; (2) not become fixated on a particular technology or 
method of production to allow for flexibility as new technologies are 
developed; and (3) work in tandem with an energy and economic study so 
that environmental, energy, and economic costs can be directly 
correlated. Recent energy and economic studies of note include those of 
Benemann and Oswald \56\ and Campbell et al.\57\
---------------------------------------------------------------------------
    \56\ Benneman JR, Oswald WJ. Systems and economic analysis of 
microalgae ponds for conversion of CO2 to biomass, US DOE 
[Internet]. 2004 [cited April 2009]. Available from: USDoE.http://
govdocs.aquake.org/cgi/reprint/2004/915/91550050.pdf.
    \57\ Campbell PK, Beer T, and Batten D. Greenhouse gas 
sequestration by algae-energy and greenhouse gas life cycle studies, 
CSIRO [Internet]. 2009 [cited April 2009]. Available from: http://
www.csiro.au/resources/Greenhouse-Sequestration-Algae.html.
---------------------------------------------------------------------------
    Algal Biomass Organization (ABO) Architecture for Green House Gas-
Life Cycle Assessment (GHG LCA) Computation.--During 2007-2008, an 
international effort, primarily facilitated by U.S. industry and 
academia, culminated in the formation of the non-profit Algae Biomass 
Organization formed to ``promote the development of viable commercial 
markets for renewable and sustainable commodities and specialty 
products derived from algae.'' ABO has taken a leadership role in 
facilitating public and private interactions, framing the major issues 
and opportunities related to algae energy systems, educating policy 
makers, media and others, and serving as an emerging national and 
international trade association. The following summarizes ABO's 
Technical Standards Committee work to determine algae's unique role in 
energy security, climate, and sustainability with a specific focus on 
GHG LCA computations.
    The Committee first defined mechanisms where algal industry based 
products reduce GHG emissions through three pathways:
  --Substitution.--Algal fuels, feeds, and chemicals may be substituted 
        for conventional alternatives, with multiple routes to 
        emissions reductions, for example:
    --Algal fuels may directly displace fossil alternatives.
    --Algal fertilizers may reduce conventional, GHG-intensive 
            production.
    --Algal animal feeds may reduce emissions via indirect land use 
            change.
    --Novel algal products may enhance other mitigation strategies. For 
            example, building thermal efficiencies may be substantially 
            enhanced with algal-derived phase changing materials.
  --Sequestration.--Long-lasting algal products (including plastics, 
        stabilized waxes, and humic acid) may sequester carbon away 
        from the atmosphere for extended periods.
  --Photosynthetic uptake.--Algal soil amendments may enhance 
        CO2 uptake and storage by terrestrial plants (e.g., 
        fertilizers, soil tackifier, and char additives).
    Second, though greenhouse gas LCA protocols such as ISO 14040:2006 
were previously developed (through ABO), the algal industry plans to 
incorporate process elements that have not yet been fully defined or 
analyzed. These unique elements generally fall within the industry 
segments of cultivation, harvest and valorization shown in Figure 14 
and highlighted with a red boundary. ABO is recommending development of 
data and analyses methods for life-cycle analysis that focus on the 
unique industry-specific details related to inputs, outputs and 
processes within the denoted architecture boundary.




        Figure 14.--Algae Biomass Industry--Segment and Products

    Third, ABO is recommending that the parameters shown in Table 4 be 
quantified to assess the overall GHG lifecycle impact of specific algae 
cultivation, harvesting, and valorization processes. Different algal 
process types, output product mixes, and methods of using input 
resources can only be evaluated consistently and comparatively when the 
LCA calculations are based on a common set of parameters. The 
Committee's work continues, as it is assisting in the task of refining 
the parameter descriptions and recommending appropriate computational 
methodologies.

                  TABLE 4.--PARAMETERS TO BE QUANTIFIED
------------------------------------------------------------------------

------------------------------------------------------------------------
Algal Process CO2 Credit..................  CO2 feedstock flow into the
                                             system.
Algal Process GHG Credit  Debit.......  Nitrous oxide & other GHG
                                             emissions.
                                            GHG impact of specific algal
                                             products.
                                            Indirect land use (iLUC)
                                             effect.
                                            Water vapor emissions GHG
                                             effect.
Algal Process GHG Debits..................  Amortized construction
                                             emissions.
                                            Direct land use
                                             displacement.
                                            GHG footprint of all inputs.
                                            CO2 leakage into atmosphere.
------------------------------------------------------------------------

                            RECOMMENDATIONS

    Earlier sections of this report highlighted opportunities, 
challenges, and research needs of algal energy systems from both the 
biofuel production and carbon recycling perspectives. Below are 
recommendations for a path forward, discussed in broad terms, in 
anticipation of a national RD&D effort.
Program Goal
    Integrated algae energy systems have the potential to offer an 
effective low-risk alternative to first- and second-generation biofuels 
and sequestration options that are currently under development. To 
guide research through early stages of development, we recommend the 
algae biofuel and carbon recycling community reach consensus on an 
overarching technology goal drafted as follows:
    To develop and deploy by 2020, integrated algal-biofuel and point-
source carbon recycling systems that offer 90 percent CO2 
capture with 80 percent recycle at less than a 10 percent increase in 
the cost of energy goods (fuel) and services (carbon abatement) 
compared to today's best practices.
R&D Program Scope, Organization and Management
    A geographically- and organizationally-diverse, well-managed and 
results-oriented research, development, and demonstration (RD&D) 
program built on private and public cooperation is critical to 
fostering cooperation among carbon emitters and algae energy system 
developers. Without such a program, the algae biofuels community will 
struggle to integrate the numerous facets of algal production and 
processing critical to making this area a successful economic 
enterprise. Likewise, in the absence of value-added recycling options 
and regulations limiting carbon emissions, utilities, small 
CO2 emitters will have little motivation to consider carbon 
reuse options. Thus, a robust RD&D program as drafted in Figure 15, 
will only occur with government involvement both in sponsorship of 
research and enactment of policy tools that incentivize and accelerate 
commercial deployment. Specific recommendations include:
    Congress and the administration should strengthen policies to 
incentivize and accelerate commercial deployment of algal energy 
systems through such vehicles as:
  --Loan guarantees (EPA CT 2005--title 17).
  --New regulatory and policy guidelines.
  --New certification and qualification processes.




 Figure 15.--Suggested Federal RD&D Program Organization and Structure

    Congress should authorize and appropriate funds for a comprehensive 
research, development, and demonstration program through the U.S. 
Department of Energy focused on algae energy systems (including both 
biofuel production and carbon recycling).
    The RD&D program should include a balanced and distributed 
portfolio of foundational, translational, and transformational 
research, development, and scalable demonstrations executed by regional 
consortia (Centers of Excellence) consisting of industry, academia, and 
national laboratories.
    Fundamental research should provide new knowledge discovery in 
several areas such as elucidation of pathways for synthesis of lipids/
oils and other desirable products, determination of photosynthetic 
carbon fluxes and partitioning into desirable products, exploration of 
metabolic pathway engineering and synthetic biology, examination of 
novel engineering processes leading to improved CO2 uptake 
and areal/volumetric algae yields, and investigation into alternative 
approaches to product synthesis.
    Applied RD&D should involve laboratory and pilot-scale RD&D for all 
three sub-systems (upstream, cultivation and downstream systems) and 
the interdisciplinary activities that bridge between them. System 
integration solutions, developed through public/private partnerships, 
should lead to integrated demonstrations and deployments in the field. 
Lessons learned from field tests should be reported to core RD&D 
elements to guide future activities. A portion of the program should 
also include research on disruptive technologies, targeting approaches 
with a high degree of technical risk but also significant potential 
return on investment.
    Crosscutting RD&D should be included on topics such as advanced 
materials, instrumentation and controls, systems engineering, and 
economic modeling.
    Demonstration and deployment elements of the program should be 
designed to demonstrate the viability of algae energy system 
technologies at a scale large enough to overcome real and perceived 
infrastructure challenges. They should include systems-level 
demonstrations that include carbon delivery and transport, heat and 
water integration, and co-siting with wastewater or other nutrient-rich 
waste streams. Technologies should be tested in the field to identify 
and eliminate technical and economic barriers to commercialization.
    The largest component of the demonstration and deployment program 
should be regional partnerships similar to the Department's Fossil 
Energy ongoing regional programs for geologic sequestration. As many as 
seven regional partnerships should examine regional differences in land 
and water use, cultivation techniques, ecosystem management practices, 
and industrial activity that can effect the deployment of algae energy 
systems. To begin the process, the Department's Fossil Energy Program 
should build upon algal-related technology roadmapping activities 
underway within EERE emphasizing and strengthening technology pathways 
that entail carbon reuse from small point-source emitters (e.g., 
industrial boilers and ethanol plants). Their goal should be developing 
pathways to deploy regional ``FutureGen'' (e.g., algae energy systems) 
large-scale demonstration of multiple producing and processing 
platforms with shared technology development.
    The program should include initial supporting research on lifecycle 
analyses of potential new algae energy system processes to identify 
issues prior to their development. This should include a rigorous 
upfront lifecycle analyses aimed at quantifying the energy, water, and 
carbon balance of various technology pathways and system architectures 
to ensure uniformity of data and overall viability prior to large-scale 
demonstrations. The program should also participate in cross-cutting 
studies to model future national energy and water use scenarios 
incorporating algae energy systems.
    The program should include an education component. Over the past 
two decades applied microalgal research and biotechnology has not been 
a significant element in educational or research programs. Few students 
have graduated during this period with sufficient knowledge and 
practical experience necessary to develop and sustain mass culture of 
algae and carryout downstream processing of algal biomass. The decline 
in the supply of scientists and engineers is severe enough to warrant 
the establishment of an educational initiative toward producing a new 
generation of scientists and engineers with the multidisciplinary 
skills needed for emerging algal-based carbon recycling and biofuels 
industries.
    The program should leverage strengths from existing programs, 
establish programmatic roles, and be coordinated from a Department-wide 
perspective. Leveraged strengths include: Fossil Energy (upstream 
systems, carbon capture and recycling); Office of Science (new 
knowledge discovery & fundamental science); EERE Office of Biomass 
Programs (cultivations systems); and EERE Industrial Technology 
Programs (cross-cutting needs and downstream systems).
    The Department should seek ways to streamline and strengthen 
management of the program through use of administrative tools such as 
experimental personnel authority and other updated contracting and 
intellectual property management strategies.
Program Timeline
    It is premature to assign an exact timeline and estimate of 
resources required to achieve the program goal described; however, it 
is reasonable to assume that cost-effective, broad-scale algae energy 
system solutions will require at least a decade to complete (Figure 16) 
and Federal investment similar in magnitude to other mainstream 
sequestration and biofuel pathways.




    Senator Bennett. Ms. Tatro, I think you hit on it exactly, 
and words have meaning sometimes that seem innocuous enough. 
But we have, as a government, as a people, we have come to 
regard CO2 as a pollutant, and your testimony here 
collectively says CO2 is a resource.
    And if you simply make that semantic change in defining it, 
the whole world changes, so I intend to start talking in those 
terms. I gather you would be willing to start talking in those 
terms. And that can be the shift in mindset that can get us in 
the right direction.
    Now, Mr. Klara, will DOE start thinking, okay, how do we 
organize to take advantage of this resource to generate new 
energy? Wouldn't that be a significant mind shift at DOE?
    Mr. Klara. Oh, absolutely. But I am not sure that a mind 
shift is quite needed. We have been investing around $35 
million, for example, in fiscal year 2009 in reuse-related 
concepts. As Senator Dorgan has stated, we are looking at a 
very aggressive influx of funding, potentially out of the 
stimulus funding, to this area as well.
    I would also caution, also with the approach to having no 
silver bullet to stabilizing emissions that, at the end of the 
day, all the analyses continue to show that the emissions are 
just so large that CCS will likely have to be the backstop.
    Senator Bennett. I realize that, but I am encouraged by 
what you have just said, the backstop.
    Mr. Klara. Right.
    Senator Bennett. If we think of it as a resource and how 
can we use this resource? Oh, there is still some left over 
that we have to deal with. All right, we will use sequestration 
at the backend rather than the focus which is there now, which 
is that everything--it is a pollutant. Everything we can do to 
get rid of it is where we ought to be going. And the testimony 
here is, no, it is a resource.
    Now it may be a resource in overabundance so that that is 
left over becomes a nuisance. But that significant mind shift I 
think has to take place, and I realize in the stovepiping of 
the way we organize our Government, you are focusing entirely 
on energy. So you can't even talk to Dr. Constantz because he 
is not producing energy. He is producing concrete.
    Let us kind of break down those sorts of stovepipes and 
realize again this is a resource, and it is a resource that can 
be used to turn into something very valuable.
    Now, Dr. Constantz, how competitive are you with portland 
cement? Without a Government subsidy, just doing what you are 
doing, can you under price traditional portland cement in the 
market today?
    Dr. Constantz. Yes. Well, there are two components. There 
is the cement and the aggregate, which is composed concrete.
    Senator Bennett. Right.
    Dr. Constantz. And both of them, in our case, half a ton of 
the material sequesters half a ton of CO2 within it.
    Our price to the gate is competitive with the price to the 
gate of portland cement. It is much more competitive, though, 
if you consider the future because, remember, the cement guys 
are under the same constraints the power guys are under. So 
they have to put emissions control in place, like in 
California, we have AB 32. And that is going to drive their 
cost to the gate up to about $90 a ton, and we will beat that 
big time.
    Senator Bennett. Sure. I understand that, and that is a 
political decision rather than an economic decision. I am not 
saying it is the wrong decision, but it is a political decision 
to put that extra cost onto the traditional portland cement. 
And the point I want to discover is even without that extra 
cost on them, can you compete today?
    Dr. Constantz. On the cement side, we can easily compete, 
and it is very profitable. On the aggregate side, aggregate is 
not a very high-value product. It sells for $10 to $20 a ton. 
So there, by having a carbon credit or like in Australia we 
have allocations that we get, that can be very profitable.
    However, as I mentioned other specialty products like 
lightweight aggregate sell for as much as $60, $70 a ton or the 
angular aggregate for pervious concrete, which is used 
everywhere today, or elongated. See, we can make them any shape 
we want.
    Senator Bennett. Sure.
    Dr. Constantz. So there are a number of high-value 
products. The aggregate is easier to get on the market. That is 
tested with fewer tests than the cement, but we are in testing 
for both of them. Our vice president of materials research is 
the past president of the American Concrete Institute, and he 
chairs the ACI 518 Committee that oversees all the other 
testing committees. So we are very much in contact with that.
    And the cement industry is really thrilled about this 
because just by, for example, substituting the sand in their 
mix design with our sand, they can bring a yard of concrete, 
which is normally 500 pounds of CO2 net emitted, 
down to carbon neutral. If they supplant both the sand and the 
gravel in the concrete, plus only replace 20 percent of the 
portland cement with our cement, they can bring it to a 
negative 1,100 pounds per yard of sequestered CO2.
    So we are negotiating with many, many powerplants, but we 
are also negotiating with many, many cement plants. And at a 
cement plant, an average cement plant produces a million tons 
of cement a year. So that is 2 million tons of our product that 
we can produce.
    And because transportation is a large amount of the cost in 
delivering concrete, which is the commercial product, by having 
the aggregate produced locally right at the cement plant from 
their emissions and being able to take that out along with 
their cement to the ready-mixed plant is an incredible win for 
everyone in the portland cement industry.
    Senator Bennett. Okay. Will you furnish for the record some 
national figures so that if everybody who is in the cement and 
aggregate business shifted over, what the national amount of 
sequestration would be?
    Dr. Constantz. Sure. So, in the United States, we use about 
124 million tons of portland cement a year, and that goes into 
about roughly 600 million tons of concrete, okay? So from that 
124 million tons of portland cement, we are producing 124 
million tons of CO2.
    The larger aspect of it is in the United States, we use 3 
billion tons of aggregate a year. And approximately 500 million 
of those tons go into concrete. The other 2.5 billion tons go 
into asphalt and road base.
    Senator Bennett. And all of that would include sequestered 
CO2.
    Dr. Constantz. All 300 million tons. And limestone is the 
preferred aggregate because it is stable at high pH, and 
concrete, as you know, has a pH of 14.
    Senator Bennett. Okay. That is the kind of scale that I was 
looking for.
    Mr. Muhs, you have listened to Ms. Tatro. Can you two make 
music together? Can you make fuel?
    Mr. Muhs. Well, I think so. In both cases, we are using 
solar energy, ultimately. And there are different uses for 
solar. And biological systems obviously require sunlight.
    One of the things that we have done at Utah State to try to 
help the scalability of algae, for example, is improve the 
volumetric growth of algae. That is how much algae you can grow 
in a volume of aqueous or water solution. We are also looking 
at using saline water from the Great Salt Lake, and we found 
some strains of algae that have a lot of oil and grow very fast 
there.
    So I think, to follow on that question, yes, we can. And 
one of the things that we are doing to try to embed better 
solar energy use is look at ways to increase the amount of 
sunlight we can get into these algae systems.
    You have seen some of these vertical reactors and things of 
that nature that Senator Dorgan had mentioned. By using 
sunlight more constructively, we can reduce surface shading and 
increase the volumetric growth by maybe a factor of 10. If we 
do that, then we use 10 times less water. And in doing that, we 
have a whole lot less energy moving energy around--or moving 
water around, and it makes algae more scalable.
    We think that--our industry colleagues who helped write our 
report say 5 years, some of the academic folks say 10 years to 
sort of commercial viability, economically. Maybe there 
somewhere between those two points is where the real number 
lies.
    Senator Bennett. Well, Mr. Chairman, thank you for your 
indulgence for this. I have been told, growing up there, that 
the Great Salt Lake is only good for two things--salt and 
sunsets.
    And if, indeed, we can use the brackish water that is there 
to create energy, that is enormous because one of the primary 
challenges with respect to corn ethanol is the enormous amount 
of water that it uses. And water is the new oil, looking ahead.
    The water resources are going to be as scarce as the oil 
resources around the world. And to be able to use this kind of 
thing with brackish water, this is a very exciting prospect. 
And I, again, thank you and congratulate you for convening the 
hearing.
    Senator Dorgan. Senator Bennett, thank you very much.
    Senator Tester?
    Senator Tester. Yes, thank you, Mr. Chairman.
    I am going to stay with Dr. Constantz for a second. During 
your answers with Senator Bennett, you had said that the price 
without subsidies was competitive. And then I drifted for a 
second, and then we were talking about not being competitive. 
Is it competitive on the concrete and not competitive on the 
aggregate? Is that what it was?
    Dr. Constantz. Right. So concrete has both cement and 
aggregate in it----
    Senator Tester. Yes.
    Dr. Constantz [continuing]. To make the concrete and the 
price to the gate, the national average in the United States is 
about $30. Most of the cost in a delivered yard of concrete, 
though, isn't in that. It is in the transportation.
    Senator Tester. Transportation.
    Dr. Constantz. For aggregate, on a national average, it 
would be sort of $10 to $20 a ton would be the retail price. 
So, for cement, the average price varies around $100 to $110. 
So the portland cement replacement component is extremely 
profitable.
    Now, in the aggregate, the specialty aggregates like the 
lightweight aggregate can be $70 a ton.
    Senator Tester. It can work. Okay.
    And did you say in your testimony that you did not have to 
separate the CO2 flow?
    Dr. Constantz. Yes. I think that is the principal 
distinction. If you have a coal plant and you want to get into 
chilled ammonia or MEA, you also have to scrub all your 
SO2. And even if you are currently compliant with 
SO2, it is not to the level you would need it to be 
to then put an MEA unit on the end.
    So if you own a coal plant and you want to do MEA or 
chilled ammonia, you have to upgrade your sulfur control and 
take more parasitic load and then put on the other. We take raw 
flue gas, and we have greater than 70 percent absorption.
    Senator Tester. Okay. You have 70 percent absorption from 
the CO2, and the NOX and the 
SOX are not an issue because they are automatically 
absorbed, too?
    Dr. Constantz. Right now, we know we are taking all the 
SO2. And we are investigating the NO conversion to 
NO2 and the mercury, arsenic, lead, selenium as 
well.
    Senator Tester. Okay. So the jury is still out on those, 
but you are----
    Dr. Constantz. For sure, the SO2, yes.
    Senator Tester. Okay, all right.
    Dr. Constantz. As well as the CO2. My VP of 
emission control has 15 patents going on already. It is 
something we are pretty knowledgeable about.
    Senator Tester. You said you are making 5 tons of cement a 
day?
    Dr. Constantz. In a batch process.
    Senator Tester. In a batch process.
    Dr. Constantz. But we have a continuous pilot plant up and 
running now, which is running 24-7, just putting out a ton a 
day. And that plant is allowing us to look at the key process 
indicators, which are needed to define a plant of any scale 
according to the EPC contractors.
    Senator Tester. So what is the inhibitor of Colstrip, 
Montana, with their four coal-fired generators, starting up a 
cement plant in Colstrip, Montana? What is stopping that?
    Dr. Constantz. Actually, we have been having a lot of 
support. We put a grant together for a coal plant, and we went 
out to the local ready-mixed suppliers, and they all wrote very 
laudatory letters of support saying if you make it, we will 
sell it.
    Senator Tester. Oh, for sure.
    Dr. Constantz. And so, just you have to have a local cement 
market. But even if you don't have a local cement market, they 
are putting in asphalt roads. You need the road base. There are 
plenty of uses almost anywhere.
    And the fact is the electrical powerplants and the cement 
plants are always in the same place because they are where the 
people are. And they are both things that are hard to 
transport.
    Senator Tester. Yes. So what is stopping it?
    Dr. Constantz. Well, we are going as fast as we can.
    Senator Tester. Is it because there is not a price on 
CO2 that is stopping it, or what is stopping it? 
Because if you can make money making cement out of 
CO2, eliminate and not have to separate all the 
CO2 by scrubbing and all that stuff, and if you use 
your flue gas, what is inhibiting this from happening?
    Because it looks to me like if I was on a board of 
directors, I would say, ``Do this. Do it tomorrow.'' And we 
just eliminated one big old headache.
    Dr. Constantz. Well, that is what my board is telling me.
    Senator Tester. So there is nothing inhibiting it other 
than a lack of knowledge?
    Dr. Constantz. We are moving as fast as we can. I am giving 
one of the addresses at the National Coal Council next Friday.
    Senator Tester. Very good.
    Dr. Constantz. And I will have a much more extensive 
discussion of what----
    Senator Dorgan. Can I just----
    Senator Tester. Yes, go head.
    Senator Dorgan. If I might just interrupt? My staff has 
indicated there still is remaining lifecycle testing for 
CO2 lifecycle balance in this process, is that 
correct?
    Dr. Constantz. Actually, one of my specialties is isotope 
geochemistry, and we have a whole team. We have 18 Ph.D.s in 
the company. One of them is just using Carbon-13 analyses. So 
this will be the most--these are the most sophisticated 
lifecycle analyses ever done on any carbon technology.
    And we are following--we can tell an atom of carbon from 
coal versus water versus the atmosphere and where it goes in 
these analyses.
    Senator Dorgan. And then the technical testing to meet the 
industry standards? Are you there?
    Dr. Constantz. Well, that is what we presented back in 
February at the World of Concrete, the ASTM testing.
    Senator Dorgan. And have they been accepted?
    Dr. Constantz. The way it works is every State has their 
own department of transportation. So, in California, we have 
Caltrans. Caltrans has a lab in Sacramento. You send them your 
product. They do their own testing. Every State is different. 
And that takes them about 18 months to do that testing on 
concrete.
    Senator Tester. Okay. Thank you.
    And I want to move on. And by the way, I think that how we 
deal with our carbon is just how we deal with our energy 
policy. It has to be multifaceted, very diverse. And so, I 
think there is room for everybody in this equation.
    But it does intrigue me that you are this far along with 
this technology, and I have heard of it, but I certainly didn't 
think it was this far along, which is good news.
    I want to talk a little bit about algae for a second. Has 
all your work been enclosed, Mr. Muhs? All your work--or Mr. 
Klara, all the work been done in enclosed systems, or is there 
some work that is being done out in the open?
    Mr. Muhs. A lot of work being done in open systems. They 
are easier to build. They are easier to operate.
    Senator Tester. Are they limited to the southern part of 
the United States, or can they be done all over?
    Mr. Muhs. They are not limited to the southern part of the 
United States. Matter of fact, the issue of water supply is 
such that it may be just as viable up north in some--one 
limiting factor may be temperature in northern regions.
    Senator Tester. And in the end, have you done any analysis 
on once it gets right down to it, of making diesel fuel out of 
the algae, and how many gallons of water it takes to make a 
gallon of diesel fuel? This is a big discussion about coal to 
liquids.
    Mr. Muhs. In the enclosed systems, it is very minimal 
because you are essentially recycling most all the water.
    Senator Tester. Okay.
    Mr. Muhs. In the open systems, it is much higher. And I 
looked at an analysis yesterday from Sandia and Los Alamos on 
water use and algae, and I still don't have a number from them 
yet in terms of actual in open systems.
    Senator Tester. We would love to get that, although I would 
imagine a lot of it depends upon sunshine.
    Mr. Muhs. Exactly. Where you are at, for example, arid 
climates are going to have a whole lot more evaporative losses 
than up north.
    Senator Tester. Exactly. I am just going to make the 
assumption that when you use wastewater, it improves the 
quality of the wastewater?
    Mr. Muhs. That is correct.
    Senator Tester. Because it removes the nutrient load?
    Mr. Muhs. It removes the nutrients. For example, in Logan, 
Utah, we have a huge wastewater facility, and we are already 
working towards that.
    Senator Tester. Is lack of nutrient load an issue when you 
are not using wastewater?
    Mr. Muhs. It can be. It can be because, obviously, you need 
the same nutrients that regular farm crops need, and so issues 
in algae, one of the main ones is proximity to nutrients as 
well as proximity to CO2, enhanced CO2.
    Senator Tester. Has anybody done any analysis about the 
amount of wastewater? If we were to maximize this to all its 
ability, do we have plenty of wastewater to fill the need in 
the country?
    Mr. Muhs. That is a good question. I don't have an answer 
to that. My estimate would be that we do have an excess supply 
of wastewater right now, and it would take quite a long time 
for us to get through that before we need it.
    Senator Tester. All right. Yes, I would tend to agree with 
that.
    Ms. Tatro, you talked about disincentives in policies that 
we may put forward or potentially appropriations. Could you 
give me any examples of that that exist now that is a 
disincentive to any one of these industries or potential 
industries that we have done?
    Ms. Tatro. I myself and my organization are not policy 
experts, so let me just caveat this response.
    Senator Tester. No problem. Neither am I.
    Ms. Tatro. I can't cite a particular policy that has 
disincentivized recycling, and I don't know what all the 
conversations are in Washington about various ways to either 
put a price on carbon or to limit the cap and trade. All of 
those policies have implications for recycling, and I don't 
know. I just think that needs to be part of the conversation in 
the formulation.
    Senator Tester. I agree. I just need to make sure that we 
don't have unintended disincentives in some policy we make. So 
if you see that coming down the pipe, I would love to hear 
about it. Because, truthfully, I think that it needs to be a 
multifaceted arrangement that we deal with CO2, and 
I don't want to disincentive anybody if they have got a good 
idea.
    Which brings me to my next question, you had talked about 
the fact that we haven't really called for these new ideas. Is 
that the same case since Dr. Chu is in the DOE, or are there 
things we can do that really could help excite people to step 
up to the plate?
    Ms. Tatro. Absolutely. I am really excited by Dr. Chu's 
direction and the support I think he also has from Congress in 
creating these collaborative energy grant challenge centers 
that may be focused on some of these problems. That is a 
fabulous way to get cross-organizational teams working on some 
of these problems.
    I am very excited. I think he sees the benefit of getting 
coordinated teams across different parts of the Department of 
Energy and with different Federal agencies to motivate people 
to work on these problems. I am very excited by what I see. I 
think it will help tremendously, and I know we appreciate the 
support from Congress that he is receiving for that.
    Senator Tester. Okay. Just a couple more, and then I am 
done.
    Mr. Muhs, you talked about one-tenth the area of a State 
like Utah or North Dakota could be used to fill all our diesel 
needs. Is that in a closed loop, open loop, or does it matter?
    Mr. Muhs. That was based on something in between, 
essentially in terms of----
    Senator Tester. A little bit of each?
    Mr. Muhs. Yes. Essentially took values for production that 
were lower than enclosed but higher than open systems to make 
that calculation.
    Senator Tester. All right. The other thing, Ms. Tatro, you 
talked about a heat engine that could make methane out of 
CO2 and water and sunlight and heat. I will ask you 
the same question I asked Mr. Muhs. What is the water use in 
making the methane? Is it 1-to-1 or less than that or more than 
that?
    Ms. Tatro. The product that is produced is methanol, which 
is a liquid material.
    Senator Tester. Yes, methanol. I am sorry.
    Ms. Tatro. That is all right. But then the question is 
still valid, and I don't know the number off the top of my 
head. The amount of water that is used compared to the amount 
of CO2 to produce a gallon of fuel?
    Senator Tester. Yes.
    Ms. Tatro. Let me get back with you on that number. I don't 
know it off the top of my head.
    Senator Tester. That would be great. I would just love to 
know it.
    And that is probably about it. I want to thank you all for 
your testimony. I think that you have all thought outside the 
box.
    Mr. Constantz, do you see CO2 as an asset at 
this point in time? You can make money off CO2?
    Dr. Constantz. Yes, in many ways. From aggregate, from 
cement, from fresh water, and if there is further carbon 
monetization from the CO2 emitter, we believe it 
could be a very profitable and job-creating enterprise.
    Senator Tester. Mr. Klara, my apologies. I didn't ask you 
any questions, next time.
    Mr. Klara. No problem, sir.
    Senator Tester. Thank you. Thank you very much.
    Senator Dorgan. I think my colleague, Senator Tester, just 
talked about thinking outside the box, and Senator Bennett 
talked about stovepipes. In many ways, it is kind of the same 
discussion.
    We do in our Government, I think, push a lot of money 
toward research and so on, but a lot of it is done in a 
stovepipe. And I think when we try to address this larger issue 
of climate change and carbon capture and so on we really do 
need to think outside the box.
    I was just thinking, as Senator Tester was asking 
questions, about Dr. Venter, Dr. Craig Venter, who came to see 
me a while back. This is probably such a simpleton, layman's 
description. But he has got scientists, I think a couple 
hundred scientists working on the prospect of perhaps of 
creating synthetic microbes that would consume coal and in that 
consumption produce methane.
    And so, that is thinking outside the box, right, perhaps 
doing it in situ. I have no idea about the carbon issue there, 
but I am assuming consuming coal underground with synthetic 
microbes and turning coal into methane probably also is an 
outside-the-box approach to deal with the carbon issue.
    But the reason that I wanted to have this hearing is that I 
want us to begin thinking differently about this issue and this 
challenge. We do have issues in front of us that the Congress 
is going to be required to address. And the question is not 
``whether,'' it is ``how'' do we address it?
    And I appreciate very much your willingness to come. Some 
of you have traveled a long distance to just share with us some 
thoughts about what you are working on and what we might 
consider in a different way when we consider the word 
``carbon'' and ``CO2'' and what we might do with it.
    I, too, think that if we are smart and we go about this the 
right way, we might well find that you can create an asset in 
terms of trying to deal with what we consider a liability. If 
that is the case, we ought to run in that direction and say to 
those that are looking at sequestration, good for you. Keep up 
your work as well because we need to do a lot of everything to 
find out what works really well.
    And the other piece I would say, finally, is this. It is 
one thing to do something in a laboratory. It is quite another 
thing to scale it up and demonstrate it at commercial scale. 
And even as we encourage the development in laboratories, we 
need to encourage the scaling up at commercial scale of those 
opportunities so that we know what we have here. Does this 
work?
    Then I think the private sector will beat a path to the 
door of that person who has demonstrated an idea that will 
provide the ability to make some money and sequester carbon at 
the same time.

                         CONCLUSION OF HEARING

    Senator Bennett and I have a 10 o'clock markup at the 
Energy Committee that we have to attend, and let me thank all 
of the witnesses for coming this morning. Your entire 
statements will be part of the record, and you may feel free to 
submit any additional material you wish for 2 weeks from the 
date of this hearing.
    This hearing is recessed.
    [Whereupon, at 10:10 a.m., Wednesday, May 6, the hearing 
was concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]

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