OriginOil (OOIL.BO) has a plan for algae based oil, and it's not to save the world by using algae-oil to replace petroleum. Rather, it's a modest plan that involves selling technology to algae farmers in the near term, then moving on to selling its technology to other companies.
OriginOil CEO Riggs Eckelberry swung through The Business Insider's HQ this afternoon to explain how he plans on turning the green of algae into the green of money*.
Last Friday the company applied for a patent that Eckelberry thinks will set the company on its course. That patent is for a technology that makes extracting oil from algae an efficient, cheap, one-step process. As pictured above, algae enters one of OriginOil's tanks, and is quickly seperated into biomass and oil afterwards. Eckelberry says OriginOil hasn't tested the technology in on a massive scale, but he's confident that it will work as it scales upward.
The business plan for OriginOil is to sell its technology to algae farmers who will use the extraction process to produce oil. Eckelberry says there are about 30 algae companies now, and he expects there to be over a 100 in the next year when he actually commercializes the technology.
He tells us that many companies are interested in working with OriginOil, though he wouldn't name any. He says that OriginOil has a waiting list of clients.
If the company can advance this technology, the next step in its business is to sell modular systems to companies with factories throwing off CO2. He says those companies can channel their CO2 into tanks that have algae in them. The algae will grow off the CO2, then it can be processed and turned into fuel.
It's a win-win for companies. They cut back on CO2 emissions, which are pricey in Europe where a cap and trade system exists, and might soon exist in the U.S. And companies also get a new source of fuel for themselves.
The best part of the business, from our perspective, is that he doesn't want to be a "land baron" as he puts it. He doesn't want to use loads of space to develop his technology. That's up to someone else.
Of course, for the business to really thrive, Eckelberry will have to sell his technology to other companies. He'll have to get customers lined up, and he'll have to prove his technology not only works, but is the best.
*Sorry about the pun, we couldn't help ourselves.
