PetroSun, Inc. (PINK: PSUD) announced that its subsidiary, PetroSun BioFuels Refining, has entered into a joint venture to construct and operate a biodiesel refinery near Coolidge, Arizona. The feedstock for the refinery will be algal oil produced by PetroSun BioFuels at company owned and operated algae farms to be located in Arizona.
The refinery will have an annual production capacity of thirty million gallons and will produce 100% renewable biodiesel. PetroSun BioFuels will process the residual algae biomass into ethanol.
Petrosun claims that Independent studies have demonstrated that algae is capable of producing in excess of 30 times more oil per acre than corn and soybean crops.
In a Feb 2, 2007 announcement PetroSun, Inc.'s field testing of the cultivation of algae for biodiesel production has progressed to the final stage prior to the construction of a commercial cultivation facility. This final stage will consist of producing adequate algae paste to test the output and economics of several biodiesel refinery manufacturers now under consideration by Algae Biofuels, a wholly owned subsidiary of PetroSun, which will own and operate the production and refinery facilities.
On Aug 23 Petrosun announced plans for algae production in Mexico. In reports on this announcement it was disclosed that algae would be grown in pods: "A cultivation pod is a proprietary closed system contained within 640 acres. Based on lower case production projections of 4,000 gallons per acre per year, a single cultivation pod would produce 2,560,000 gallons of algal oil per year."
The biorefinery and algae farm complex will generate all of its own electrical and heat requirements, utilize non-potable or saltwater, consume no fossil fuels and will be carbon neutral. The joint venture anticipates that all permits will be approved and construction on the biorefinery should commence during the third quarter of 2008.
A previous post described Petrosun's formation of their algae R&D activities.
For a very negative commentary on the prospects for algae biodiesel see Biopact's June 12, 2007 post which states that: "Most of the algae companies have never proved that the technology works on a continuous basis and/or on a large scale."
Despite its great potential to reduce the land requirements to grow inexpensive feedstock, production of biodiesel from algae still faces many hurdles before it becomes commercial. Almost all of the problems are found in the algae production facilities. Problems with contamination of the algae strains and getting enough sunlight to the algae (and thus maintaining the production rate), especially on a year round basis, are among the major problems. Petrosun Inc. stock traded OTC at $0.15 on Jan. 17 with a market cap of $2.70M which is not a very good recommendation for a company planing to build a large biorefinery and go through the development process required for such a venture..