By Jason Turgeon:
It seems that with oil nearing $140 a barrel, everyone is suddenly excited about improving efficiencies across the board in the world of transportation and fuels. Applying Lean to a process, whether it’s the manufacturing of cars or the method of refining fuel used to run those cars, is the best way to find new efficiencies. Of course, any Lean efficiency in energy use or transport that reduces fossil fuel use has an immediate Green payoff, too.
On the subject of Lean, Green, and fossil fuels, this article from the always excellent Cleantech.comdescribes a very lean-sounding new process for growing biofuels. There’s been no shortage of press releases from startups touting breakthroughs in the biofuels arena, especially those interested in producing biodiesel from algae. Lean applications help this latest announcement from the stealthy Algenol Biofuels stand out from the crowd, although the fact that the company already has an $850 million project in the works to bring the product to market doesn’t hurt either.
Most algal biofuel companies have focused on growing strains of algae that produce fats as a byproduct of their growth. The fats are then refined into biodiesels which can be used in diesel-fueled engines or as a heating oil. It’s a promising arena, but the process generally requires tremendous amounts of fresh water, open space, and sunlight. Open space and sunlight are easy to find — just go to the desert. But finding fresh water in the desert is a bit of a challenge, and even if you can get the water you have to transport the fuel from the desert to your customer base somewhere else.
Algenol took a look at the process and decided it made more sense to use seawater for its growing medium. There are plenty of deserts that border on oceans, including the Sonora desert in Mexico where its first facility is planned. Another advantage of locating a facility on the coast is that the transport of the fuel to market is easily accomplished by using the existing tanker fleet, a much more efficient method than using trucks. By making the switch from fresh water to seawater, the company has found a way to rid itself of a relatively expensive and scarce input (fresh water) while at the same time shortening its supply chain. That seems very Lean to me.
But the big Lean standout is that instead of refining fats into biodiesel, the Algenol process has used naturally occurring algae that turn the sugars they’re fed directly into ethanol, with no refining step needed. Since the Leanness of this move might not be apparent to everyone at first glance, I’ll use some phrases from the Lean Manufacturing Glossary to explain myself–I’m not trying to drop buzzwords, just trying to phrase this in a way the Lean audience can understand.
If you were to value-stream map the entire manufacturing process of any fuel, whether it was biofuel or fossil fuel, you would see a large step in the middle called “refining.” Until now, refining fuel has been absolutely unavoidable–you can’t burn crude oil in your car or feed algae-based lipids directly to your truck’s diesel engine. Any Lean improvements to the process would probably look at how to improve the refining process. But Algenol has taken a higher-level view. In a sort of a large-scale Kaizen exercise, the company has found a way to eliminate the refining step. What was once an essential but expensive part of the manufacturing process is now just so much Muda. I’d imagine that for a lot of people in the world of oil, eliminating the refinery is a big paradigm shift.
Here we have an example of a company that seems to have taken a Kaizen approach from the very beginning. The company looked at what it was trying to produce – biofuels – and eliminated as many unnecessary steps as it could. Compared to the process of corn or cellulosic based ethanol, which is shockingly inefficient, it appears that they’ve succeeded. Compared to other algal biofuels, they’ve switched a scarce resource – fresh water – for an abundant one -sea water – while eliminating the refining step and minimizing the supply chain expenses. From a waste-reduction standpoint, it looks like they’ve found a beneficial reuse for the majority of their process wastes. The only outputs seem to be ethanol, fresh water, and the nitrogen-rich dead cell bodies, which can be used to replace fossil-fuel based nitrogen fertilizers. And of course, by taking waste CO2 from other companies, they’re closing an important loop and setting themselves up for financial gain if the CO2 trading market finally becomes a reality.
All of this isn’t to say there aren’t some important questions that haven’t been answered. Off the top of my head, I’d like to know what the source of sugars that they are feeding these algae are. I’d also like to know the circumstances surrounding their Mexican land acquisition. The company claims that this is an unused desert wasteland, but that’s rarely the case, as the desert has tremendous ecological value and there are almost certainly people who may be displaced to worry about. Finally, I’d like to know more about the real energy balance, since they are awfully shy on details. I note that the process involves a small power plant, but the feedstock for this power plant isn’t clear. Will it be running of the ethanol they’re producing? But these questions and others aside, I’ll remain cautiously optimistic and congratulate the company for coming up with a Lean and Green approach to tackling some of our most pressing problems.
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