Green and Black

Australian technology company Muradel is developing a method of producing sustainable crude oil from a unique strain of saltwater microalgae.

Crude oil, extracted from deep beneath the ground and sea, is the product of ancient organisms decaying over millions of years. Extracting it is expensive, laborious and takes a toll on the natural environment, carrying with it the risk of spillage and disruption to the local geological and ecological systems. The world relies on crude oil for power generation and vehicle fuel among other things, but as a fossil fuel it is non-renewable and unsustainable – eventually, it is going to run out.

An innovative technology using microalgae could provide a solution. South Australia-based Muradel Pty Ltd is developing and proving up a method of producing crude oil from rapidly growing microalgae, effectively doing in a couple of days what it takes nature millions of years to do.

Muradel is not the only company in the world to be investigating microalgae for crude production – indeed, some are already using it to produce fish food, pharmaceuticals and supplements such as beta-carotene. Nevertheless, after a long journey of research and development to get to this point, company Chair Ollie Clark believes Muradel really has something special on its hands. Clark was at the centre of the company’s founding in December 2010, initially as a joint venture between the company he then chaired, SQC Pty Ltd, along with Murdoch University in Perth and Adelaide Research and Innovation Pty Ltd, owned by the University of Adelaide.

SQC, standing for Sequestration of Carbon, was founded in 1999 to find a way of producing crude oil from freshwater microalgae. Clark became the SQC Chair about five years ago. However, after a decade of development, the concept was still struggling to become a viable business proposition.

“We were getting increasingly concerned about growth rates and competition for fresh water, with food crops for example,” Clark recalls. “Using fresh water, you also have to worry about taking over arable land. And there are tens of thousands of freshwater strains of microalgae that compete with each other, which makes it hard to stick exclusively to the one you’re trying to grow.”

The solution came from Murdoch University and the University of Adelaide, which were also investigating crude production from microalgae. The difference was that their microalgae were a rapidly growing saltwater variety. The two universities were awarded a Pacific Region grant to build an A$3 million facility for testing the technology in Karratha, Western Australia, and were seeking a commercial partner to join them.

“We made a game-changing decision to join them,” says Clark. “We adopted the microalgal strain Murdoch had identified and the promising technology Adelaide had developed to create Muradel. SQC was demoted to solely a funding organisation and is now the principal shareholder in Muradel, with the universities holding smaller shares.”

All about the microalgae

Muradel’s method of producing crude is much closer to farming than fracking. The microalgae are grown in a mixed pond of saltwater, to which nutrients and carbon dioxide are added to promote algal growth. The resulting microalgae is continuously harvested and concentrated into microalgal biomass, which then undergoes hydrothermal liquefaction to become what Muradel calls “green crude”. Despite the name, it is just as black as conventional crude oil and can be used in exactly the same way, claims Clark.

“Once you get to the green crude stage, there’s a number of ways you can use it,” he adds. “You can send it to the oil refiner to be turned into conventional crude oil products such as petrol, diesel and aviation fuel, because it’s pretty much the same stuff. But we believe it will have several other uses as well.”

The ‘green’ in the product’s name refers to the sustainable and renewable way in which it is produced. Muradel hopes to increase the product’s green credentials further through proving that the microalgae consumes an equal amount of carbon dioxide to that released when the oil is burned, making it carbon neutral. “This is one of the reasons why it’s so important that we get the efficiency of production right,” adds Gerald Barker, Muradel Operations Manager.

There are a lot of companies producing biodiesel, says Barker, from ingredients including waste oil, fat from the meat industry, soybeans and other crops. But biodiesel from these and other sources has a number of disadvantages that don’t apply to biofuels produced from microalgae-based green crude.

“Supply of the feedstock used to produce biodiesel is constrained by external factors, whereas ours is open-ended, with expansion limited only by commercial viability and capital raising,” Barker says.

Clark adds that growing microalgae also has a lesser impact on the environment than growing other feedstock. “The beautiful thing about producing fuel from microalgae is that it takes up just a minute fraction of the land required to grow corn, soybeans, etcetera,” he explains. According to Muradel’s figures, producing 35,000 litres of fuel a year with soybean crops requires 78 hectares, whereas producing it from microalgae requires just one.

“Our calculations show that it would require just 0.21% of Australia’s total land area to produce all the crude oil the country needs,” continues Clark. “And unlike those crops, it requires neither arable land nor fresh water” – the latter of which is particularly constrained in Australia.

In contrast, growing microalgae requires little more than sunshine, carbon dioxide and marginal land – all of which Australia has in huge supply.

Realising the concept

These factors make microalgae a great feedstock for biofuel, as well as for other industries such as fisheries. But Muradel has a few extra tricks up its sleeve to increase the technology’s feasibility further.

Muradel’s system for harvesting the microalgae, developed by the University of Adelaide, turns the organisms into a thick paste. It was designed to use as little energy as possible, so as to deliver a profitable ‘energy in to energy out’ ratio. “This is important in determining our carbon footprint, as well as our production costs,” comments Clark. He adds that because the microalgae require sunny conditions, it’s possible the plants could be powered largely by solar photovoltaic technology.

The first Muradel plant, a pilot plant, was built in Karratha in Western Australia’s Pilbara region. This area was chosen because it has some of Australia’s longest sunlight hours and warm temperatures all year round, making it a good environment for culturing microalgae. The plant had several raceway ponds – three of 200m2, two of 20m2 and two of just 2m2 – through which it could optimise conditions for growth, operations, monitoring and harvesting.

The facility had an onsite laboratory for analysing, monitoring and categorising the microalgae and their growth media. It was decommissioned in February 2013 in preparation for the construction of a larger demonstration plant in Whyalla.

“We learnt a lot up there and I think it would be quite possible to build a commercial plant up there again in the future,” comments Clark. “We chose it for climatic reasons but, because it is an area pivotal to mining companies using fly-in fly-out labour, costs can be prohibitive. Whyalla offers better overall economics at this stage.”

Located on the coast, almost 400km from Adelaide, Whyalla is slightly cooler than Karratha but similarly hot and dry, with an average 301 days of sunshine a year. Besides price and climate, Muradel chose Whyalla for its proximity to Adelaide, skilled labour base and supportive City Council. Its coastal location means there is plenty of seawater, as well as what Clark calls “abandoned land… land  that is no longer regarded as suitable for agriculture… land it’s unlikely anyone would mind losing.”

The Muradel Demonstration Plant (MDP) will be Australia’s first fully integrated, continuous marine microalgae to green crude production plant. A$4.5 million of the plant’s total $10.7 million cost will come from the Australian Renewable Energy Agency (ARENA). Incorporating a 4000m2 pond and adjacent plants for purification and hydrothermal liquefaction, its purpose will be to demonstrate the commercial-scale production of green crude. It will be fully automated, with a dedicated SCADA system and analytical laboratory.

“[With the MDP] we think we will achieve a better understanding of construction costs and thermal efficiency, as well as how realistic our current predictions are for carbon footprint and operating costs,” says Clark.
“We also need to confirm our ability to operate continuously and recycle the seawater and nutrients. The operation of the plant will decide whether we’ve got a commercial future.”

A green future

The MDP is taking shape and is scheduled to be commissioned in December. Muradel will then track its performance over 12 months, from summer, through winter, to summer again.

“Our next steps will be continuous operation and monitoring, monitoring, monitoring – involving data collection and productivity assessments,” says Clark. “We were amazed with the productivity we got at Karratha, and we think we can match it at Whyalla; we’ll be very focused on that. We’ll get an appreciation of how many people we’ll need for scaling up, and we hope to identify areas where we can cut costs.”

Muradel’s overall objective is to achieve green crude production sustainably and at a competitive cost, so that it can fulfil a significant percentage of the crude oil needs of Australia, “and other countries we hope,” adds Clark.
“There are countries with energy shortages that need this technology much more than us. If we can get this right, then we believe we’ll be in a position to help them out. We could license the technology to other companies, but we’re also thinking of building and operating our own plants abroad.”

The big question in all this is: could green crude from algae actually replace conventional crude from the ground? After all, there has been an underlying threat for decades now that the world’s oil reserves are drying up. While certainly ambitious and excited about their revolutionary technology, Muradel maintains a realistic view of the situation, preferring to concentrate on performance rather than promotion at this stage.

“I’ve been in Australia’s energy industry for around 50 years now, and there have always been people saying we’re going to run out of oil, but we never have,” says Clark.

“I think there will be oil and gas around for many decades to come; however, there has to come a time when the world realises that if you can produce oil our way, competitively, and with every bit of CO2 produced getting absorbed back into the process, then that’s the smart way to do it.”

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