On Tuesday, GPRE officials announced the formation of a joint venture to commercialize algae production as part of its commitment to "next" generation biofuels.

BioProcess Algae LLC (BPA), is a joint venture between affiliates of Green Plains, CLARCOR Inc., BioProcessH20 LLC and NTR plc. Green Plains has committed approximately $1.4 million initial funding for a 25.5 percent interest in BioProcess Algae.

"In this joint venture we've identified the technology partners that we think are the strongest players in the field, and we've put together the business model that we think will be successful," said Scott Poor, Corporate Counsel and Director of Investor Relations & External Affairs for GPRE.

Compared with second-generation biofuels, algae are high-yield high-cost (30 times more energy per acre than terrestrial crops) feedstocks to produce biofuels. Since the whole organism uses sunlight to produce lipids, or oil, algae can produce more oil in an area the size of a two-car garage than an entire football field of soybeans.

"Algae is something that adds value to our ethanol production," explained Poor. "There is a great deal is synergy between algae and ethanol."

And the best thing for GPRE is that algae can be made from the by-products of ethanol production.

"Algae is potentially a by-product of ethanol that makes the process cleaner and greener through carbon sequestration," said Wayne Hoovestol, Chief Executive Officer. "Algae production fits into Green Plains' business model since we are already in the business of marketing biofuel and feed products."

Using advanced photobioreactor technology developed by the company from base technology licensed to the company by BioProcessH2O, BioProcess Algae expects to produce algae at Green Plains' ethanol plant in Shenandoah, sustained by the plant's recycled heat, water and carbon dioxide.

"These are all things that we have right there at the plant in Shenandoah," said Poor. "Literally we can recycle our heat and water and we end up with a cleaner, greener ethanol in the process. We hope to create value out of these waste products."

BioProcessH2O based in Portsmouth, R.I. is a science and engineering-based developer of photobioreactors and filtration systems in the water and energy markets.

"By partnering with Green Plains, we will fast track our plans for the development of an industrial-scale solution for continuous algae production," said Tim Burns, President of BioProcessH2O. "The modular system will be designed for use in ethanol and other industries that emit carbon dioxide."

In April 2008, Green Plains received preliminary approval for a $2.3 million grant from the Iowa Power Fund to finance research and development in algae production.

Green Plains intends to revise the grant proposal to reflect the formation of BioProcess Algae. The revised grant proposal will be subject to review by the Iowa Office of Energy Independence and the Iowa Power Fund board of directors.

"We will have to revise our grant application," said Poor. "We've been working very closely with the Iowa Office of Energy, we have a very strong relationship with them, and we've been keeping them abreast of the developments of our project all along."

Poor said Shenandoah Chamber and Marketing Director Gregg Connell has been instrumental in this project and will continue to be in the future of working with the Iowa Power Fund.

"From day one this was really something that was put together by Gregg Connell," said Poor. "He took us through the initial grant application, and he was really instrumental in putting this all together.

"This is really a testament of a corporation working with local economic development officials to put together something innovative."

Poor said a timetable for the start of the project has not yet been established, but BPA is dedicating to moving it along as quickly as possible.

"We intend to put the pilot project together in Shenandoah at the earliest possible date," he said. "However, that's pendant upon technical consideration. So I can't give a firm date, just that we will put together the pilot project in Shenandoah as quickly as we can, and we're working on it very diligently."

Poor said teaming up with CLARCOR, BioProcessH20 and NTR is the best way of moving the project forward and insuring its success.

"This is a very excited development for Green Plains and for Shenandoah. We think there is enormous potential in algae and are very enthusiastic about putting this project together."

©SW Iowa News 2008