Entrepreneurs Wade Into the ‘Dead Nature Zone’

August 12, 2009, Wall Street Journal

Every spring, fertilizer runoff from the U.S. Mississippi River floods into the Gulf of Mexico, causing a massive algae bloom that leads to a giant oxygen-deprived "dead zone" where fish can’t survive.

Now, this annual problem is getting new attention, not from marine scientists but from entrepreneurs looking for a new domestic source of fuel. And one start-up sees fish themselves being part of the process.

The algae blooms are spawned each year as the farmland runoff from as far away as Montana flows into rivers, eventually reaching the Mississippi and flowing into Louisiana bayous and out into the Gulf of Mexico. These nutrients are a buffet for the floating algae, or phytoplankton, which are simple sea organisms that eat and reproduce quickly. This algae bloom eventually sinks and feeds an array for bacteria, which suck up so much oxygen that fish and plants either move away or perish.

These so-called hypoxic areas exist around the world, and there were as many as 200 in North America in the spring, says Robert J. Diaz, a professor of marine science at the College of William & Mary in Virginia. The Gulf of Mexico dead zone is the second largest in the world, after one in the Baltic Sea.

Scientists have been studying dead zones for decades, and the concern about their effect on ocean life has grown. The Louisiana seafood industry worries that dead zones threaten the ecosystems that support the state’s $1 billion shrimp industry as well as other fisheries. Environmental groups are concerned that the runoff from agricultural fertilizer is threatening a natural ecosystem and pushing it toward collapse.

Turning algae into a bio-based oil to run in conventional refineries alongside crude has been a long-held dream of biofuels entrepreneurs. Exxon Mobil Corp. last month announced a partnership with Synthetic Genomics Inc., a privately held biotech firm owned by genomics scientist J. Craig Venter, to spend as much as $600 million working on developing algae biofuels. Greener Dawn Research estimates that privately held start-ups Sapphire Energy and Solazyme Inc. have raised more than $75 million for their own algae-to-fuel effort.

Thus far, both of those projects plan to raise their algae stocks in controlled facilities onshore.

LiveFuels Inc., a Silicon Valley start-up, has a different idea. Rather than growing algae in onshore facilities, where the cost of circulating the water can be high, LiveFuels wants to use the algae in the dead zones. But instead of harvesting it directly, it wants to go a step up the food chain, using algae to feed fish that could be processed for oil.

"It is too expensive for humans to grow algae, harvest it and get the water out and then convert it into a petroleum-like substitute," said LiveFuels Chief Executive Lissa Morgenthaler-Jones. It is easier and cheaper to harvest algae’s oil the way Mother Nature does it — "which is to use fish," she said.

The fish would gobble up the algae and then be harvested, cooked and pressed to extract fish oil — a method already used to produce omega-3 fatty acid dietary supplements.

LiveFuels, of San Carlos, Calif., is testing out carp, tilapia and members of the sardine family at a fish farm in Rio Hondo, Texas, near the Mexican border. "We want the couch potato of fish, the kind that just eat and eat," Ms. Morgenthaler-Jones says.

Once it figures out a good fish mix, LiveFuels wants to release them in Louisiana bays — more than 11,340 kilograms of fish per acre — to feast on the algae blooms. "This is the sea equivalent of traveling goats: you have algae, we’ll bring the fish," she says, referring to companies that rent out goats to eat up grasses on California hillsides to reduce the danger from wildfires.

The company envisions building caged fish farms in parts of the algae blooms in Louisiana bayous and offshore in the Gulf of Mexico. The algae would provide a free source of food to raise the fish, and natural tidal flows would churn the algae to keep fresh nutrient-rich water flowing through.

The idea isn’t meeting universal praise. "Our preference is not to wait until the Gulf of Mexico is a giant dead zone and then have someone go out and collect the algae," says Ed Hopkins, director of the environmental-quality program at the Sierra Club. He favors reducing fertilizer runoff upstream to cut off the nutrients that feed the algae blooms.

LiveFuels also faces a more practical concern. Algae blooms are seasonal and move around from year to year, so Livefuels might have to design mobile fish farms to capture the moveable feasts. The National Oceanic and Atmospheric Administration said last week that the dead zone this summer was the fourth smallest in the 25 years they have been measured, though it was still about 4,800 square kilometers.

Nancy Rabalais, executive director of the Louisiana Universities Marine Consortium, is doubtful of the plan. "There are several groups looking at phytoplankton as a biomass. But my sense is there is not enough on a continual basis to make it economically feasible," she said.

In addition to LiveFuels, she says, academics from Illinois and New Zealand and a biodiesel maker from Alabama have contacted her about harvesting the algae that bloom in the Gulf of Mexico. A Clemson University professor is looking into turning algae-fed brine shrimp into oil.

David T. Kingsbury, chairman of LiveFuels’ scientific advisory board and a former assistant director of the National Science Foundation, said he was skeptical at first, too, "but I’ve come around. It hasn’t really been fully tested yet, but it seems like a reasonable idea," he said.