Arizona Legislature Supports Algae Growth as a form of Agriculture

When it comes to green energy, Arizona is jumping head first into pond scum.

Amidst skyrocketing gas prices and the search for a new biodiesel, algaculture—or the use of algae as an alternative to fossil fuel—has seeped to the forefront of an emerging energy market.

Arizona’s legislature wants to make sure there are algae-friendly laws on the books. Rep. Matt Heinz, D-Tucson sponsored two bills to encourage algae growth in the state.

The U.S. Department of Energy recently focused on algae as an effective biofuel for its high oil content, its consumption of carbon dioxide for growth, and its ability to grow virtually in both brackish and freshwater.

Private companies like Solazyme, Inc. have provided thousands of gallons of algal biodiesel to the U.S. Department of Defense to power air and watercraft, but large-scale production is still too expensive. The U.S. Department of Energy stated in a report that algae fuel refining led to $8 a gallon costs.

But developments in algae strains, as well as farming design, gives hope that algae could be grown on a level scalable to large-scale fuel production.  Scientists from the National Renewable Energy Laboratory estimate up to 10,000 gallons of algal biofuel could be produced on a single acre of land, and scientists published an article in Water Resources Research estimating the U.S. could replace up to 17 percent of its foreign oil imports by using algal biofuels.

H.B. 2225 adds growing algae to the definition of what defines agriculture, which would give algae growers the chance to lease state trust land for building farms, and H.B. 2226 would give algae farmers the same tax breaks other farmers enjoy as agriculturists—something primary sponsor Rep. Matt Heinz, D-Tucson, said sends a message that “Arizona is throwing out a welcome mat” to investors and scientists in this growing field.

“This is a potential new energy source, a potential source of long-term job and economic growth here,” Heinz said. “This is setting things up in a way to make sure that algae is treated the same way other agricultural endeavors are.”

Scientists at the University of Arizona say this definition is a great benefit to the future of biofuels in the state.

Randy Ryan, professor and assistant department director of the Agricultural Experiment Stations, said there were fears that algaculture could have been reclassified as industrial production for tax purposes.

“I’m sure a farmer’s going to say ‘you mean if I grow algae I get taxed at five times the rate than if I grow alfalfa? It’s not worth it.’ So then you’ve just destroyed the whole algae biofuels industry,” Ryan said.

With an industry like algaculture on the cusp of a major breakthrough into the oil market, it’s possible that the state would want to tax the cultivation of algae at a higher rate, Ryan said.

He believes the bill will keep future taxes on oil production at a rate equitable with rates charges for growing alfalfa. “

Ryan and Peter Waller, professor of agriculture and biosystems engineering, are working on a project called Arid Raceway Integrated Design, which attempts to grow algae the fastest with the least energy.

The University of Arizona is collaborating with Arizona State University to find more sustainable ways to grow algae for biofuel production, as part of a $44 million Department of Energy grant given to university labs across the country.

Algae has already made its way into diesel production, and has been used to fuel planes and ships for the U.S. military, the Associated Press reported earlier this year.

Scientists and entrepreneurs agree that Arizona is especially primed to grow the green stuff because of the state’s sunny climate.

“We have a lot of potential here to harness the energy of the sun,” Heinz said. “To protect and encourage this nascent industry, it’s a good idea to put this in the statute. “

But growing algae in the desert presents unique challenges that entrepreneurs and scientists are addressing in different ways.

Jeff Scott, president of Colorado-based algae startup Algal Micro Farms, Ltd., is developing a system to grow high-quality, high-purity algae for the cosmetic and nutrition industries and he plans to test it out in Arizona.

He said the new bills could help him expand his business in the future, though right now he’s fine-tuning his prototype.

“Our scale is still fairly small,” Scott said.

Typically, algae is grown in a pond, drained, cleaned, and the oil is extracted, Scott said, but in his system, the algae is grown in a closed off system, which leads to better purity, something needed for cosmetics and food products.

Contaminated crops of algae is a major problem for farms big and small, so Algal Micro Farms’ solution is to close the farm off from the elements by containing growth in acrylic containers and regulating temperature in the closed system using heating and cooling rods.

“What’s most important to us at this moment is getting our system up and growing neutraceuticals [high quality algae for food and cosmetics] so we can generate revenues, so we can scale up,” Scott said.

ARID raceway, on the other hand, is trying to grow algae so quickly there’s no time for it to get contaminated.

Ryan said the idea of a closed system can make pure algae, but the bottom line is it’s too expensive to produce enough algae biofuel to fill an air tanker, for example.

Ryan estimates with acrylic, electronically cooled containers, “An acre [of algae] might cost you $10 million,” Ryan said. “Will you ever recover your cost at $3 a gallon fuel prices? No.”

ARID raceway’s system is complex, but it uses a combination of solar-powered water pumps and airbags to move water-growing algae into pools of different depths to control temperature.

“With this thing, it’s all made out of dirt, the liner is agricultural liner. Everything we do we want it to be the lowest capital expenses. We’ve been trying to figure out how to make really cheap pumps, how to integrate solar into it,” Ryan said.

But Ryan’s research doesn’t end at his small field in the Tucson metro area. With the bills expanding trust land rental and agricultural tax benefits to algae farmers, Ryan said future algae farmers would be able to build bigger farms on larger tracts of land.

There’s still a ways to go before algae makes its way to the gas station—estimates from business owners and scientists range from 18 months to 10 years.

But there’s an agreement that Arizona is a great place to start growing.

The state not only has abundant sunlight, but the desert lacks many invasive algae species that climates nearer to the ocean suffer from, Waller said.

With algae production reaching efficiency levels of other crops, it could be a viable animal feed, too.

“Not only are we growing oil, but the byproduct which is almost equal in value is animal feed,” Ryan said.

What about the idea that growing an aquatic plant in the desert is a waste of water? Not more than other crops, Waller said.

“We do have about the same amount of water loss as alfalfa. But algae grows 10 times faster than alfalfa. So if we’re producing animal feed then our production versus water loss is higher than alfalfa,” Waller said.

Not to mention algae’s ability to grow in saline water, which could allow use of marginal water sources like agricultural runoff, Waller said.

H.B. 2225 has been approved by both houses and awaits approval from the governor, and H.B. awaits final approval from the Statehouse.

Mejdrich is a senior at the University of Arizona and is the Bolles Fellow this semester covering the Legislature. The fellowship was named to honor former Arizona Republic investigative reporter Don Bolles who was assassinated in the line of duty. 

 

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