KEY POINTS:
As general secretary of the National Party during the Muldoon "Think Big" era, Barrie Leay is no stranger to grand energy projects.
But rather than Muldoon's vision of reducing dependency on oil imports by building huge industrial plants, Leay is thinking small.
Aquaflow Bionomics, an alternative fuel company he chairs and in which he is a major shareholder, is designing oil refineries that fit into a shipping container.
These aren't refineries of Muldoon's Marsden Point sort. The crude oil they produce for turning into diesel, petrol and jet fuel doesn't come from the depths of the Earth but from sewage settling ponds.
Potentially, the refineries could also be installed at major food processing plants such as meat works and dairy factories.
Not all Leay's thinking is small. He estimates that if Aquaflow's process was used at the settling ponds of every town and city in the country, enough oil could be extracted to meet New Zealand's total diesel requirements.
So what is the process? Leay won't give details for commercial reasons. But the broad outline has been well publicised.
Since 2006, Aquaflow says it has been able to produce oil from wild algae harvested from effluent ponds.
Extracting oil from algae isn't of itself revolutionary. During the oil shocks of the 1970s and 1980s that inspired Muldoon to think big, the United States Department of Energy began researching algae's oil-producing potential. It was found to be a rich source of oil, but the refining process was uneconomic. Now, with a barrel of crude five times the 1970s price, algae is of interest again.
Aquaflow is doing things differently from other algae harvesters, Leay says. Rather than try to grow a single species - there are thousands - it harvests whatever thrives naturally on settling ponds.
So far, it is collecting algae at the Blenheim sewage treatment plant for conversion into fuel by a biorefinery, which went into operation in March, and is producing commercial volumes of fuel. Enough algae is being harvested in Blenheim for a million litres of fuel a year, Leay says.
But don't ask how. The first secret step is harvesting the algae, using what Leay calls "fish traps", which filter the microscopic creatures from the pond water.
Since 2006, Aquaflow says it has been able to produce oil from wild algae harvested from effluent ponds.
"All I can say is that we did try a [number] of technologies, none of which worked, so we had to develop our own."
Aquaflow's other closely guarded industrial secret is the inner workings of its biorefinery. Leay says rather than just squeeze oil from the algae, the process also converts proteins and phospho-lipids into biocrude. That means higher yields than from a straight extraction process.
The filtering and refining processes are subject to international patent applications filed in the middle of last year.
Leay likes to describe the process as a virtuous circle. The algae is a renewable feedstock that consumes nutrients in waste water and, by photosynthesis, takes carbon dioxide out of the atmosphere.
The water is then suitable for irrigation or industrial cleaning and, with minimal further treatment, would be drinkable. The algae carcasses left behind after oil extraction are rich in nitrogen and phosphates and suitable as fertiliser.
When the biofuel is burnt, carbon is again released but at a "marginal" rate compared with the emission of stored carbon from burning fossil fuels.
To Leay, a geologist by training, there are obvious parallels between refining the two types of fuel. He sees harvesting algae as creating energy from "new sunlight", whereas oil and gas taken from the ground is the product of "old sunlight".
What Aquaflow is doing is "just taking a few million years out of the process".
But that's not all. Rather than follow the oil industry model of shipping fuel across the world for refining, Aquaflow proposes taking refineries to the fuel source - sewage ponds, food-processing plants even large dairy farms.
"Why not convert it on the site and put it into whatever vehicles might use it?" Leay says.
A number of such plants could be operating by the end of this year.
Then again, the biocrude may not be used in vehicles at all.
"We will go for the highest-value market and that may in the long term not be the fuel market. We have a lot of interest from chemical companies for all sorts of uses."
Leay, displaying more of the media savvy honed in his National Party days, and which is getting plenty of use as international news organisations zero in on Aquaflow, won't name customer names.
"I'm not prepared to disclose where we're going but you can take it that we've got firm orders."
Anthony Doesburg is an Auckland-based technology journalist
