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Algae explored as alternative source of fuel

Phoenix Bizjournals – May 11, 2007

I don’t want anyone to think that I am advocating a company as a stock investment. In full disclosure, I have no interest or relationship to the company described in this article. I do wish them well and I am excited about the prospects of their endeavor. I talk to companies every day as part of my professional life and typically urge them to focus on one success at time – this company does not appear to be following that advice.

This article is about a company that operates a dairy farm and a bio-refinery.  Their goal is to be completely self-contained, producing their own energy. I hope that they are successful since I firmly believe that we need to find alternative sources of energy to break the addiction to foreign sources of liquid and gaseous fuel.

XL Dairy Group Inc., a privately held company based in Phoenix, expects to begin operations at its 7,500-head dairy farm in 2008. The farm will be in Vicksburg…. The two-phase project will be completely self-contained, producing its own energy and cow feed from byproducts of the biodiesel and ethanol production.

The refinery … will use corn for ethanol production during its first year, then shift to algae by 2009, said XL Dairy Chief Executive Dennis Corderman. The decision to use algae was in response to the high costs of trucking corn in from Midwestern farms. Algae has been studied for decades as an alternative biomass energy product.

Once completely operational, the company expects to sell more than $180 million in milk, ethanol, biodiesel and other byproducts.

From environmentalists to general grocery store customers, people have decried the financial and environmental effects of corn-based ethanol since it became a popular energy alternative during the past decade. Sugar, which fuels ethanol-producing South American countries, also has become more expensive.

 Environmentalists protest the amount of energy spent to harvest and transport feedstocks such as corn and sugar, and the energy spent converting it into ethanol. Ethanol also is more expensive and dangerous to transport than gasoline because it cannot be moved through most underground pipelines, leaving trucks and railways as the only answer.

But algae can be grown anywhere and is not part of the human food supply, offering an advantage for the ethanol and biodiesel community….

Because of algae’s need for carbon dioxide and its exponential growth rate, its potential as an energy feedstock is unlimited.

Upon approval of the company’s proprietary, low-cost algae production system, the acreage will be filled with thin plastic tubes. To grow the algae, water and carbon dioxide will be pumped into the tubing, which has the feel and texture of a plastic food storage bag. The company expects to have its algae production method patented by 2009.

Once its algae system is in place, the company expects to produce about 20 million gallons of ethanol and at least 5 million gallons of biodiesel in each of its first five years.

You can read the full 3-page article here.

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