In Florida, the hammer dropped swiftly and without warning in Ft. Myers as Algenol lost its CEO, changed its near-term strategy, chopped 45 staff members from its payroll, and saw its two lead investors re-commit to an additional two years of funding for the company, in the space of a morning.<\/p>\n
The drama is not unheard of in staff reductions \u2014 employees told \u201call is OK\u201d until, for them, it is entirely \u201cnot OK\u201d. But in the case of Algenol, the dramatic shift in the company\u2019s direction included a divergence from an all-fuels strategy to a \u201cwater treatment and carbon capture now, and maybe fuels later\u201d focus, without much warning, if any, to its stakeholders.<\/p>\n
Outgoing CEO, Paul Woods made no official comment in the terse three sentence release that came from Algenol HQ on Friday morning, and said:<\/p>\n
Algenol Biotech LLC (\u201cAlgenol\u201d) announced today that its Board of Directors has accepted the resignation of CEO, Paul Woods. Paul is resigning for personal reasons, his decision is voluntary and he will remain on the board of the company for continuity purposes and to assist the company on its road to commercialization.<\/p>\n
Mr. Gonzalez, who is Chairman of the Board and represents the interests of the Gonzalez Group, a significant investor group, commented:\u00a0 \u201cWe thank Paul for the huge contribution he has made to Algenol and for helping us to get to this point in the company\u2019s development. We are grateful that he has chosen to remain associated with Algenol. His experience, insight and knowledge will help us to achieve our goals. We, the Gonzalez Group, and our co-investor, Reliance Group, remain committed to commercializing Algenol\u2019s DIRECT TO ETHANOL\u00ae technology.\u201d
\n\u201cMany governments, companies, institutions and people talk a good game about helping our planet, but none of them are willing to put in a dime to back that up.\u201d<\/p>\n
There was no mention of the change in strategy, or reductions in force, in the initial release. But later, Woods added in a note, which he was careful to characterize as \u201cnot speaking for Algenol, Ed can do that now, these are just my personal thoughts.\u201d<\/p>\n
But here they were.<\/p>\n
Algenol is headed in a new direction, and that won\u2019t include me.<\/p>\n
I am very proud of the huge accomplishments to date at Algenol over the last 9 \u00bd years. I believe I brought enthusiasm and passion for developing truly the most advanced low carbon fuel system on the planet. I am very proud of the work I did, and even more proud of my co-workers.<\/p>\n
Truth is I was never able to convince people outside of Algenol that carbon reduction was needed.<\/p>\n
Many governments, companies, institutions and people talk a good game about helping our planet, but none of them are willing to put in a dime to back that up.\u00a0 Hopefully, starting with Paris in December, the next 2 years will change rhetoric into action.\u00a0 Are we going to do something about climate change or not? I hope the world catches up with Algenol in seeing the need for carbon mitigation is now, not 10 years from now.\u00a0 Fancy accounting doesn\u2019t remove carbon from the atmosphere we all share.<\/p>\n
Alex Gonzalez should be applauded for being the original visionary who has back Algenol year after year.\u00a0 He has a strong commitment to helping our planet and climate change mitigation and he backs that commitment with real money.\u00a0 He has committed even more support for Algenol ensuring at least 2 or more years of funding guaranteed, so the amazing work i started will continue and be seen through.<\/p>\n
I continue to want Algenol to succeed, and my co-founder Ed Legere has been elevated to COO, so I know Algenol is in good hands along with Dr. Paul Roessler and Dr. Ron Chance.<\/p>\n
Algenol will continue to push Carbon Capture and Utilization (CCU), using its current and very successful Direct to Ethanol platform to help companies lower their carbon footprint, while producing new sources of fresh water for countries and regions in such desperate need for fresh water.<\/p>\n
A new focused CCU Algenol will work diligently over the next 2 years to finalize and further develop its system adapted primarily for carbon capture and fresh water creation.\u00a0 Low cost fuels cannot continue to be the sole focus of Algenol, we live in a new reality of low oil prices, low demand and abundant supply.
\nThe reductions in force<\/p>\n
Later in the day, the hammer dropped on the expenses side. The investors made a two-year funding commitment. In return, the company, it was reported by local media, made a commitment to cut expenses by $18 million. Leading a reduction in headcount of 45, out of a current staff of between 170 and 208. and the afore-mentioned re-focusing on carbon capture and water treatment. It was the headcount reduction, Woods told a local reporter, that triggered his resignation.<\/p>\n
\u201cIf the board wants to go in a new direction, it has a right to do so,\u201d Woods told WINK News, adding that \u201cWhen you decide to go forward with a reduced budget, then you have to make hard choices.\u201d
\nDropping the Florida project<\/p>\n
Although no more news was coming out of Algenol headquarters, Woods told local media that he expected that the proposed central Florida algae project will be scrapped. The re-focus on water treatment and \u201cnew sources of fresh water for countries and regions in such desperate need for fresh water,\u201d tips a focus on the developing world, possibly India, where key investor Reliance Industries is based.<\/p>\n
Reliance partner Aquatech for example, mentions that \u201cReliance Industries Limited\u2019s Jamnagar Refinery Works is the biggest grassroot refinery in the World. The refinery\u2019s main source of water is the product water produced from sea water by thermal desalination units. This makes water very precious in the facility, and Reliance has a major focus on recycle and reuse of various effluents produced in the refinery.\u201d<\/p>\n
We may well see that Algenol technology, once re-focused, aims to compete with thermal desalination, which usually has capex in the $5-$10 per gallon of capacity and produces water at an operating cost of $0.003 per gallon \u2014 by using and cleaning brackish water. It\u2019s early days \u2014 we\u2019ll wait for more clarity from Algenol HQ on the specifics of the new direction.
\nLooking at Algenol\u2019s future<\/p>\n
One thing is clear, Algenol\u2019s cyanobacteria produce ethanol even as they remove nutrients from water and clean it up \u2014 so it is not a question of exiting the business of fuel production, even in a new direction. However, expect that capturing carbon may produce a focus on secondary products that more permanently sequester CO2.<\/p>\n
What do we think? We\u2019re thinking ethylene. Polymerized into polyethylene, you know it as Glad Wrap or under some other brand name. It\u2019s a valuable commodity, more permanently secures carbon (e.g. in plastic materials). And you make ethylene from ethanol by dehydrating it \u2014 literally, removing fresh water. It\u2019s one product that fits the scope of the new strategy. The only think we can\u2019t figure, exactly is \u2014 why make ethylene from algae when natural gas is at all-time low prices and generally refineries are making boatloads of cheap ethylene from methane?<\/p>\n
In this case, we might be looking at the carbon sequestration problem \u2014 and also, we might take into account that, outside of the US, natural gas prices have remained quite high.<\/p>\n
For example, landed LNG prices are $7.20 per MMBTU in India, compared to $2.41 in Lake Charles, Louisiana \u2014 as of October 2015 as reported by FERC. That\u2019s compared to roughly $8.27 per million BTUs for oil. So, gas is cheaper, but not as strikingly low as elsewhere. Putting up a natural gas cracker to make low-cost ethylene is not as attractive in India as it is in the US, or the Middle East.
\nThe Bottom Line<\/p>\n
It\u2019s the money, honest. Or lack thereof, in the form of project commitments and partners. And as a result, one of the most outspoken and visionary voices in the industry, former CEO Paul Woods, is out.<\/p>\n
Low oil prices and general lethargy on paying the premiums to accelerate low-carbon fuel technologies \u2014 they have claimed another victim in the algae fuels game. Leaving Cellana and Joule as the only two companies standing with an overt focus on fuels from algae or cyanobacteria \u2014 and in Cellana\u2019s case, even that is as part of a multi-product strategy where fuels provide the volume for scale while nutrients provide the high margin products that drive the economics.<\/p>\n","protected":false},"excerpt":{"rendered":"
In Florida, the hammer dropped swiftly and without warning in Ft. Myers as Algenol lost its CEO, changed its near-term strategy, chopped 45 staff members from its payroll, and saw its two lead investors re-commit to an additional two years of funding for the company, in the space of a morning. The drama is not […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","nova_meta_subtitle":"","footnotes":""},"categories":[5572,5571],"tags":[10744,10743],"supplier":[1325,11141,11140,18650],"class_list":["post-29733","post","type-post","status-publish","format-standard","hentry","category-bio-based","category-co2-based","tag-carboncapture","tag-useco2","supplier-algenol","supplier-gonzalez-group","supplier-reliance-group","supplier-ril-reliance-industries-limited"],"_links":{"self":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/29733","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/comments?post=29733"}],"version-history":[{"count":0,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/29733\/revisions"}],"wp:attachment":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/media?parent=29733"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/categories?post=29733"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/tags?post=29733"},{"taxonomy":"supplier","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/supplier?post=29733"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}