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Russ: This is the BusinessMakers Show heard here and online at thebusinessmakers.com, and now it's time for the Aflac BusinessMakers Flashback brought to you by Aflac. Ask about it at work. And for this morning's flashback, we're gonna roll back to earlier this week when I got to visit with Norman Whitton, the founder and CEO of Sunrise Ridge Algae, Inc. Check this out. Norman, welcome to the BusinessMakers Show.
Norman: Russ, it's my pleasure to be here.
Russ: All right. Well, in fact, I guess technically I should say, "Welcome back to the BusinessMakers Show."
Norman: Thank you.
Russ: You were with us about a year and a half ago. From what I understand from my homework, the direction of the company's changed slightly, but the core mission is still head-on. Is that right?
Norman: Our mission is still to produce biofuel from algae.
Russ: Biofuel from algae, that refreshes my memory from our last discussion. We talked a little bit about using food for biofuel. I was complaining about the price of my popcorn going up, and you guys stayed away from food from the beginning, right?
Norman: Sure. We didn't want to use corn. We didn't want to use soybean oil. We didn't want to do anything that would take food out of somebody's mouth and put it into a car. Instead, we focused very early on algae because most people don't eat algae, right? It can be grown in the kind of places that you wouldn't be able to grow any other crop. For example, we have a pilot plant that uses wastewater out of a sewage sludge and that's not something you're gonna wanna eat.
Russ: That's right. (Laughter) I agree.
Norman: So we're finding these kinds of wastewater and lands that aren't otherwise usable for crops and we hope to convert those into the production of algae, which we can then convert into a fuel feedstock. We're actually making something we call bioleum now.
Russ: Okay.
Norman: Bioleum is kind of a contraction between bio-crude and crude petroleum, and we're looking to put that as a feedstock into our existing petroleum refineries and displace foreign crude oil.
Russ: Cool. So bioleum, we didn't talk about that a year and a half ago, so that's something that's relatively new?
Norman: Yeah, it is new. We've made some changes in our technology over the last couple of years. I guess if you are expecting to invest in technology development, you should find some things that work and maybe you find some things that don't work.
Russ: Right, right.
Norman: So we've made some directional changes.
Russ: I mean I read the press release on bioleum, and it sounded like a major step in the right direction.
Norman: Well, we hope so and we're really pleased, and the thing that was most happy for us was that we were able to produce volume oil from algae. There are very few folks out there who have actually been able to do that so far.
Russ: So with your process at the end of it, there was oil there that would burn?
Norman: Yes, and it has the heating value that's very similar to crude oil. Now that doesn't mean very much to people unless you know what the other kinds of biomass-derived pyrolysis oils look like. For example, if you took a tree, chopped it up in little bits and pyrolyzed it to look make a crude oil from wood, you end up with a feedstock that has only half the heating value that crude oil does. Pyrolysis is just basically taking something and heating it up to a very high temperature, and maybe as high as 1,000 degrees F, and at that high temperature in the absence of air, instead of burning, what happens is the material falls apart and it makes gas. That gas we then condense and that condensed gas looks like petroleum or crude oil.
Russ: Okay.
Norman: In the case of wood, because wood starts with cellulose, cellulose doesn't convert very well to oil. But we've found that algae converts very, very well to oil, particularly when we add a catalyst.
Russ: Okay.
Norman: And that catalyst makes the protein and the carbohydrate portions of the algae convert into oil. That's very different than other people.
Russ: And what you just described is what you're also calling bioleum, right?
Norman: That's correct.
Russ: So it's exciting times right now at Sunrise Ridge Algae?
Norman: Correct. We have achieved one of our key milestones, which was to begin producing oil in a quantity that could be tested, and we've sent some test samples off to petroleum refiners, and we're getting some interesting feedback from them.
Russ: Okay. Now let's roll back a little bit, too, because some of our listeners might be new to using algae as a fuel, and you kind of alluded to this. You don't have to go take large farms and large acreage with which you could grow food or any other thing that has a competing value because algae can be grown in this waste treatment plant. Now are you doing that just to prove that it can be grown there or if your best-case scenario rolled out, would you actually be using waste treatment plants to grow your algae?
Norman: Yes, that's what we want. There are three neat things about algae. One is that you can convert it into crude oil. That was our main interest to begin with. Second, in the process of growing, algae can eat up nitrate and phosphate. Nitrate and phosphate in wastewater is a pollutant. The third thing that algae does that's a good thing is it eats CO2 and CO2, as we know, has been implicated as a greenhouse gas.
Russ: Yes, it has.
Norman: There's a lot of folks who are concerned about global warming and believe that what needs to be done is reducing carbon dioxide emissions, so what we can do with this is we can actually take the algae, they can eat up CO2, eat up these nutrient pollutants, convert those into a feedstock that we can put in our petroleum refineries. It sounds like a beautiful business and that's why we're very focused on it.
Russ: You must be getting attention, too, I mean like from the government and investors and those types of people.
Norman: We are working on money that our investors have provided. We received an investment award from the governor of Texas last year, the state's Emerging Technology Fund, and we're continuing to look for additional investment as we move forward because we're gonna need money to scale up.
Russ: Cool. Now when you were going through these three things that are really cool about algae, number one was you can convert it to fuel, right?
Norman: Correct.
Russ: Okay. And I assume this new process, which involves a catalyst, is patented by your company.
Norman: We're working on patents. We've put a number in, and we continue as we do additional research to add to our patent portfolio.
Russ: Okay. Now before we wrap it up here, the status is that you've turned your bioleum over to refineries just to make sure that they can process it, and you're pretty confident that they can, right?
Norman: We have a number of folks in our company that have spent 30 or 40 years of their careers working for petroleum refiners, and we're pretty sure that this is gonna be something that can be put in a petroleum refinery and converted into jet fuel or diesel fuel or gasoline. It will be exactly the same as the jet fuel, gasoline and diesel we get out of crude oil today. Maybe it requires a few tricks for them to chase when they get there, but that's what we're testing with them.
Russ: And let's say that you pass that test. What's next?
Norman: The next step after that is we need to scale up. So far we're producing about a kilo at a time, which isn't very much, so we need to scale it up to about a ton a day, which would make sort of five or six barrels a day of products, and if we're able to make five or six barrels a day, we look like a little tiny oil well. Once we start looking like a little tiny oil well, we'll get enough additional investment so that we can come in, grow up to 1,000 acres and then we can brew 500 or 1,000 barrels a day. Now we're starting to talk like a real oil company.
Russ: Okay, Norm, and that all sounds real cool. I want to stay close to you 'cause when you get there I want to bring you back on the show (Laughter) so we can say, "We knew you when." That is really cool. Congratulations on this progress you're making.
Norman: Thank you. It's really exciting, and I'm really glad to come back and chat with you about it.
Russ: All right, great. We've been talking with Norman Whitton, the founder and CEO of Sunrise Ridge Algae, Inc. It's the company that's making progress in turning algae into real fuel. And that wraps up this morning's Aflac BusinessMakers Flashback brought to you by Aflac. Ask about it at work. And you're listening to the BusinessMakers Show heard here and online at thebusinessmakers.com.