Amanda Peterka - The algae industry is gaining momentum with the rebirth yesterday of a congressional algae caucus and recent progress at several facilities around the country to make fuels, nutritional products, cosmetics and other goods.

The caucus, which will be co-chaired by Reps. Scott Peters (D-Calif.) and Matt Salmon (R-Ariz.), plans to advocate for algae-friendly legislation and to implore federal agencies to use their authority to help grow the burgeoning industry. Algae business leaders also this week hit the capital city to drum up support for the industry.

"Six years ago, we had a lot of test tubes and test tube shots and vials and flasks and things of that sort. Now we can actually point to physical facilities and show the pictures across the United States," said Algae Biomass Organization Executive Director Mary Rosenthal. "We can talk about harvesting and producing and selling, so the momentum is there."

Several years ago, the algae industry was represented on Capitol Hill by the Algae Energy Caucus, a bipartisan effort led by former Reps. Jay Inslee (D-Wash.) and Brian Bilbray (R-Calif.). But the resignation of Inslee to run for governor of Washington and the defeat of Bilbray in California's elections put the effort in limbo.

The new caucus with Peters and Salmon at the helm is composed of 15 House members, 11 of whom are Democrats. Most of the representatives in the caucus have some sort of algae business or research effort located in their districts.

"Algae-based fuel is one of those promising green technologies out there that unfortunately, because it's an emerging technology, it's not well-known and its benefits are often lost in a sea of misinformation," Salmon said. "That's why it's so important that this caucus exists."

Though the algae industry has been quieter on Capitol Hill than other biofuels groups -- a purposeful strategy, according to Rosenthal -- producers have celebrated recent successes in achieving partnerships with major oil companies and scaling up the nation's first algae production facilities. Notably, Sapphire Energy Inc. a few months ago announced it had paid back its entire $54.5 million loan from the Department of Agriculture for the nation's largest algae farm in Columbus, N.M (E&ENews PM, July 30).

Most algae producers are eyeing high-value markets like cosmetics and nutrition supplements -- one company, Cellana Inc., has pinned its hopes on an algae-derived substitute for fish oil -- before entering lower-value markets such as gasoline, diesel and jet fuel. But building a new plant is still expensive -- on the order of about $250 million -- and producers say they will need federal support for at least a few years to help with startup costs.

The Algae Biomass Organization is in the process of putting together a wish list for the caucus to push in Congress and at U.S. EPA and the Department of Energy, Rosenthal said. At the top of the list is ensuring that the federal biofuel mandate remains in place.

The industry also is pushing for a federal recognition of its ability to capture carbon dioxide and convert it to the oils needed for a wide variety of consumer goods, Rosenthal said. Several algae producers have aligned themselves with industrial-scale operations, including an ethanol plant in Iowa and an electricity plant in Kentucky, and plan to capture waste CO2 to use as an input for algae photosynthesis.

A recent report found that algae-derived fuels reduce greenhouse gas emissions by more than 50 percent compared with petroleum-based fuel (Greenwire, Sept. 20).

But producers say federal policies are currently focused on costly underground carbon sequestration that is likely still far in the future, rather than on carbon reuse, as a means of reducing industrial processes' carbon footprint.

The Algae Biomass Organization is working to have EPA recognize carbon reuse by algae companies as a climate change mitigation strategy as it develops new permitting standards for power plants. It has asked the congressional caucus for help in nudging the agency in that direction.

Mark Allen, vice president of integrated carbon solutions for algae company Accelergy, warned that a lack of focus on carbon reuse in the United States is driving jobs overseas.

"Today, most of the jobs that we're producing are in China because they're very aggressively going after the carbon reuse pathway," he said. "They don't have the opportunities that we envision for underground sequestration, so they're very aggressively pursuing carbon reuse strategies, and their principal pathway now is based on algae."

The algae industry also is pushing for an extension of the one-year cellulosic biofuel production tax credit, which Congress expanded to include algae for the first time in the "fiscal cliff" deal passed at the beginning of this year (Greenwire, Jan. 3). The industry also wants a modification of the tax code that allows algae producers to take advantage of master limited partnerships, a financing mechanism that is currently open only to the oil and gas industry.

Legislation was introduced in both the House and the Senate to open up MLPs to renewable energy sources (Greenwire, April 24). But algae producers say the bills need to be tweaked to allow them to participate.

"We just want to make sure that those manufacturing credits that are available to others like the oil and gas industries are extended to us, too," said Martin Sabarsky, CEO of Cellana. "The oil industry, for us, is our customer. We're not competing with them -- we're providing an alternative for crude oil made from petroleum."

Algae producers also want to be included in the federal definition of agriculture to open up a wide range of market programs and incentives for their industry. While Ohio, Arizona and Iowa have passed state laws enfolding algae production into agriculture, Congress has yet to make a move in that direction in the farm bill, the nation's five-year agricultural policy.

Congress has already included aquaculture in the federal definition, and algae producers say adding their industry wouldn't be too much of a stretch. Algae producers are merely "high-tech farmers," Sabarsky said.

"I do think the best way to think of this, both from a financing business company standpoint and a policy standpoint, is high-tech agriculture," Sabarsky said. "It's the most intensive way to grow biomass compared to any other crop on the planet, period, full stop."