SHARON CASKEY HAYES, KINGSPORT

Kingsport Times-News 

A company headquartered in Kingsport has won a $3 million grant from the U.S. Department of Energy for its efforts to turn algae into biofuels.Renewable Algal Energy, LLC, was notified Sept. 15 that it was selected to receive the money through the DOE’s Small Business Innovative Research Phase III Xlerator program for its project titled “Algal Biodiesel via Innovative Harvesting and Aquaculture Systems.”

A total of 33 companies across the nation were presented $57 million in grants ranging from $500,000 to $3 million. The funds will be used to support the commercialization of clean energy technology.

Dr. Jeffrey S. Kanel, president and chief executive officer of Renewable Algal Energy (RAE), said the $3 million award will be used to construct a new production facility that will use the company’s patent-pending technologies.

“There are a lot of other companies in the world trying to convert algae into biofuels. We’re unique in our technology approach. That’s why we have patent-pending technology in the aquaculture, in the harvesting and the extracting areas, because we think we can do the steps more efficiently than the competition,” Kanel said.
Kanel is originally from Ohio but moved to Kingsport to work for Eastman Chemical Co. An engineer by training, Kanel had worked at other chemical companies, including Union Carbide and Dow Chemical, and got to know various scientists and engineers along the way.

A few years ago, he and some of those other scientists and engineers decided to take a different direction and start their own company. They founded Renewable Algal Energy in 2007, with a goal of developing sustainable energy sources for the future.

“We really wanted to develop an alternative energy supply. We wanted to give America an option for energy independence,” said Kanel.

He said RAE’s group of scientists wanted to improve upon existing efforts to develop biofuels that could compete with petroleum. For instance, the group didn’t want to have a “food-for-fuel tradeoff.” And they wanted to use sea water as opposed to fresh water.

They also preferred to use lands that couldn’t be used for growing traditional crops. They wanted to avoid using pesticides and genetically modified organisms. And they wanted to develop a fuel that could fit into the nation’s existing distribution network, Kanel said.

“I think we’ve come upon a way to accomplish all of those objectives,” he said.

He said RAE scientists developed patent-pending technology to grow, harvest and extract oil from algae. The oil can then be used by chemical companies or petrochemical companies to produce fuels.

Kanel said the technologies mitigate carbon dioxide emissions without using arable land, fresh water or pesticides. And the overall process can be integrated with shrimp or fish aquaculture.

“No solution is perfect. But we’re trying to work hard to get to a solution,” Kanel said.

He said the process starts with “enormous pond systems” that can produce a new crop of algae every 10 days.He compared the process to making biofuels from soybeans and corn.

“Just like oil in soy beans and corn, there is oil in algae. But you can grow more algae per acre than you can grow corn or soy beans. Plus algae grows year round. So we can get a crop every 10 days, whereas corn, if you’re lucky, you can get two crops a year,” Kanel said.

The technology caught the attention of the DOE, which says on its Web site that RAE “will leverage its experience in algal aquaculture, harvesting, and extraction, to demonstrate ... improved, low cost, energy-efficient methods for harvesting and dewatering algae that contribute to an algal oil product that is cost-competitive with petroleum.

“The integration of their technology with up and downstream processes will reduce technical and economic risks for future scale-up to a full-scale commercial process,” the DOE says.

RAE was the only company awarded a grant in the biomass technology category. Other small firms were presented awards for other clean energy technologies involving geothermal, fuel cell, solar, fossil energy, nuclear energy, advanced wind technology and more.

“Small businesses are engines of job creation and innovation, and we need their ingenuity and entrepreneurial spirit to drive a clean energy economy,” said U.S. Secretary of Energy Steven Chu when announcing the grant award winners.
“By helping America’s small businesses bring these innovative technologies to market, we will spur economic growth and help reduce the country’s energy use,” he said.

This latest award represents the third and largest grant received by RAE from the DOE. The company’s first two DOE grants were used along with capital from RAE members to build a small demonstration facility in Arizona, where the company further developed its technology.

RAE now plans to evaluate potential sites in the United States for a new 100 acre-plus production facility, funded by the new $3 million DOE grant.

Asked why RAE established its demonstration facility in Arizona, Kanel said the company needed a warm climate where algae could grow year round.“Here, you can grow it only a few months out of the year,” he said, adding the need to grow algae year round essentially puts Tennessee out of the running for the new 100-acre production facility.

Kanel said the new plant will likely be built somewhere in the lower southern states.

In all, 14 scientists and engineers from eight states make up RAE, which Kanel calls a “virtual company.” Kanel lives in Kingsport and manages operations from his home.

Other local RAE members include Dr. Steve Falling and Dr. Cal Churn.Dr. David Bryant, who in 1998 won the Perkin Medal from the American section of the Society of Chemical Industry, is also a member of RAE.

The Perkin award is given to a scientist for innovation in applied chemistry resulting in outstanding commercial development.

In all, RAE’s members have 350 years of experience in commercializing processes, Kanel said.

He said RAE is now seeking to license its technologies with major chemical and petrochemical companies.
“Our expectation is to license and have multiple commercial facilities operating throughout the world in five years,” Kanel said.He said DOE’s grant award “is a nice validation of our approach.”

Companies interested in the new technology can contact James Beck, RAE international director of sales and marketing, at jbeck@raebiofuels.com.To read about all the DOE award winners, visit http://www.energy.gov/news/9495.htm