Dalton Utilities hasn’t struck oil, but the company may have about the next best thing.

This fall the utility plans to start a pilot project to produce biodiesel from wastewater on its land application system along the Conasauga River.

“We are working on the design now,” said Mark Marlowe, Dalton Utilities’ vice president of water and wastewater engineering. “We hope to start construction in the fall or winter of this year, and complete construction in fall or winter. The startup will take several months. But it should be fully operational by the spring of 2010.”

The pilot facility will be about an acre in size, capable of treating roughly 200 to 500 gallons of wastewater a day with algae that will feed on the nutrients in the water.

The utility has partnered with the University of Georgia in the effort. And K.C. Das, director of the university’s Biorefinery and Carbon Cycling Program, says the facility will be the first of its kind in the nation.

Das says algae has several advantages over other sources of biodiesel, such as soybeans or trees or waste vegetable oils.

“It’s a very fast-growing organism. You can easily produce about five times more biomass per acre per year than you can produce out of a forest,” said Das.

Marlowe said another advantage is that the algae is not a food crop.

“So you are not competing with providing food,” he said.

Das said they expect to get about 430 to 450 gallons of biodiesel per acre per year to start. And larger facilities may be able to make even more.

“The target is 2,000 gallons (per acre per year),” Das said.

By contrast, a soybean field might produce 60 to 75 gallons of biodiesel per acre per year.

If everything goes as planned, Dalton Utilities plans to build a full-scale production plant on about 20 to 40 acres of its land application system property.

“Ultimately, we hope to be able to produce at least enough biodiesel to operate our current diesel fleet. That’s around 250,000 gallons a year,” said Marlowe.

The land application system currently treats about 25 million gallons of wastewater a day. But Marlowe said that in the past, it has treated around 30 to 35 million gallons of wastewater a day.

Marlowe said the biodiesel plant could also extend the life of the land application system, where treated wastewater is sprayed onto the land rather than being discharged directly into the river. That provides another level of “treatment” as the soil filters the water before it goes into the river.

“We’ve been working on this for about two years. Our wastewater has phosphorous, and we knew algae had the potential to remove phosphorous from the wastewater,” Marlowe said. “So we decided to talk to the University of Georgia about partnering on a project that would benefit us from the standpoint that it would treat the wastewater to a higher standard and that had the potential to produce biodiesel that we might be able to utilize in our operations.”

Marlowe said phosphorous builds up in the soil over time.

“Eventually you reach the point where you can’t add more phosphorous to the land,” he said. “We were looking for a cost-effective way to remove the phosphorous. It can be quite expensive.”

Das said algae needs phosphorous to grow.

The pilot program will be operated by existing employees. Dalton Utilities officials say it’s too soon to say what impact a full-scale production facility would have on jobs. Cost estimates have not been finalized.