State concerns with a Southwest Florida company’s plans to make ethanol from algae may have stalled the business’s expansion.
Tucked inside an energy bill the Legislature approved in the final hours of its recent session is a change that’s meant to address state concerns about Algenol Biofuels Inc. The company wants to make ethanol from algae at a commercial farm in Lee County, the first of its kind in Florida.
Under the legislation, the Fort Myers-based company must obtain a special permit before it could grow algae on a farm bigger than two acres, unless the Florida Department of Agriculture and Consumer Services gives it an exemption.
There’s a concern the algae — if it escaped — could hurt the environment, though the company’s own research shows its algae won’t survive if it spills out of the plastic bladders it grows in.
“I am going to have to speak to counsel to see the final version of the bill, and its effect on Algenol,” said Paul Woods, CEO of Algenol Biofuels, in an email.
With the legislative change, it appears the company would be regulated by two separate divisions of the Department of Agriculture — the Division of Aquaculture and the Division of Plant Industry, “an awful lot for a small company,” he said.
When the Division of Plant Industry first approached Woods with questions a few months ago, it took him by surprise. He’d already been working closely with the Division of Aquaculture and he didn’t understand why another division of the same department was getting involved in his expansion.
“How does this have anything to do with a plant?” he questioned.
Algenol’s expansion is in limbo, as Woods works to address the state’s concerns. The company is preparing to deploy its technology on a large scale. By 2025, the company hopes to produce more than 20 billion gallons of ethanol a year for the U.S. market at multiple locations.
Algenol has more than 30 acres to grow algae on commercially at its headquarters in south Lee County, where it’s looking to expand. It plans to produce 100,000 gallons of fuel-grade ethanol a year at the local plant, off Lee Road, just north of Alico Road.
Now, the state law that governs special permits for “plantings” over two acres refers only to growing a “nonnative plant.” The legislative change — proposed by the Department of Agriculture and supported by legislators — would specifically add algae and blue-green algae to the permit requirements.
“It will be helpful to the department. They struggle with a lot of nonnative species and apparently there is a concern. If they are concerned I’m concerned and that is why we put it in there,” said Rep. Scott Plakon, R-Longwood, who sponsored the energy bill (HB 7117).
It’s a good “extra check” to make sure the emerging technology is handled properly and “that we don’t inadvertently cause a problem that would be harder to control later on,” he said.
Following Senate approval, the House voted almost unanimously Friday to send the energy bill to Gov. Rick Scott. The bill would take effect July 1, as long as it’s not vetoed.
Even without the legislative change, Richard Gaskalla, director of the Division of Plant Industry, said his division has the right to regulate Algenol because of its expansion plans beyond two acres.
“I think it’s a good thing in that it clarifies that algae is an organism that needs to be looked at — if it’s going to be grown on large-scale farms for biomass or other purposes — just to make sure that there’s not going to be any adverse environmental consequences. That’s all we are doing here,” he said.
When another company wanted to grow elephant grass to produce ethanol in Florida, that required a special permit, he pointed out.
“Algae is kind of in a gray area, on whether it’s a true plant or not,” Gaskalla said.
The Division of Plant Industry first approached Algenol with concerns about 60 days ago.
“We have not told them that they can not produce this,” Gaskalla said.
He said the division just needs to know that if a hurricane or another catastrophe strikes there are ways to contain the genetically-altered algae if it escapes. “It’s not native,” Gaskalla said. “It’s not known what would happen if it spilled and gets into groundwater or a water body.”
He said it’s important to make sure a mistake is not made “because it’s harder to put the genie back into the bottle,” once it’s out.
“Once an organism escapes into the environment, particularly if it’s an invasive species, it can be very costly and sometimes impossible to eradicate it,” Gaskalla said.
In a letter Woods sent to the Division of Plant Industry, he points out that the algae is dependent on the nutrients it’s fed and that it would not live in the outside world.
“What they basically say in their letter is they have to baby this organism to get it to perform and to produce ethanol,” Gaskalla said. Take that babying away, he said, and the company argues it would be like “unplugging someone from life support.”
The algae is grown in seawater with the help of sunlight and added nutrients, including B12.
The next step for the Division of Plant Industry is to verify Algenol’s research by seeking feedback from independent scientists, Gaskalla said.
It’s possible that all of the state’s concerns may be addressed before July, when the rules for growing algae on more than two acres would be clarified in the energy bill if it moves ahead.
The energy bill is designed to increase the use of renewable energy, offering tax credits and exemptions to increase production.
“We think it’s a good bill and one that the governor should sign,” said Sterling Ivey, a spokesman for the Department of Agriculture.
Since the state was already working with Algenol to resolve issues before the energy bill passed, Gaskalla said he doesn’t know if it “changes much of anything.”
If Algenol’s research and safety arguments are proven by outside scientists and the Division of Plant Industry feels comfortable enough, it may not even require a permit, he said.
Even if a permit is required, it doesn’t need to be a long process, Gaskalla said.
Lee County gave Algenol a $10 million grant to help it grow and create jobs locally. The company increased its U.S. work force to more than 100 employees last year and expected to add about 30 jobs this year.
After hearing about the state’s concerns, Lee County Commissioner Ray Judah said he’ll do whatever he can to help Algenol work out any issues.
“It’s an extremely important project, not only for Lee County, but for the world,” he said. “To reduce our reliance on fossil fuels, on oil and coal, we need to pursue other alternative renewable fuel sources – and algae is a very promising option.”
Connect with Laura Layden at www.naplesnews.com/staff/laura_layden