Dow to build algae test plant with Fla. startup

NEW YORK - Dow Chemical Co. and a Florida-based startup said Monday they're working on a project that will use algae to turn carbon dioxide into ethanol, a process that could make chemical manufacturing more environmentally friendly if successful.

As part of a test phase with Algenol Biofuels, Dow will build a 24-acre plant on the Texas coast that will be fed with carbon dioxide emissions from one of its nearby plants.

Algae, grown inside a clear chamber in a sea water solution, will use photosynthesis to break down carbon dioxide into oxygen and ethanol.

The ethanol can them be sold as a fuel, though Dow likely would be more interested in using it for plastics. Natural gas is currently a primary ingredient used to make plastics, and while the fossil fuel burns cleaner than crude, it's still considered a pollutant.

The oxygen could be used to burn coal cleaner, a process that would produce more carbon dioxide that could then be pumped back into the algae process.

The announcement comes days after the U.S. House of Representatives narrowly passed legislation to drastically limit America's carbon dioxide emissions.

"Everyone has been thinking of carbon dioxide as just a pollutant, and that's wrong," said Paul Woods, Algenol's CEO. "We have to start thinking about carbon dioxide as if it's a reusable, recyclable product."

The companies have jointly applied for a $25 million grant from the Department of Energy as part of the recent federal stimulus package.

Each company is funding different parts of the application process, though money isn't changing hands between the two.

"This project and the innovative technology involved offers great promise in the battle to help slow, stop and reverse the growth of greenhouse gas emissions," said Andrew Liveris, Dow's chairman and CEO.

The test plant, which is expected to employ about 300 people, will consume about two tons of carbon dioxide a day, enough to produce about 120 to 140 gallons of ethanol, Algenol said.

Algenol hopes the project will spark renewed interest in ethanol, which has gotten a bad rap lately from the other processes used to make it, namely corn-fed ethanol.

The Georgia Institute of Technology, the National Renewable Energy Laboratory and the Membrane Technology & Research Inc. are also working on the project.

Shares of Dow Chemical added 8 cents to $16.13 in afternoon trading. The stock has traded between $5.89 and $39.99 in the past 52 weeks.

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