Producing biofuels from algae is a concept dating back to the oil shocks of the 1970s. At the time, the US Government created an algae research program which analyzed the thousands of strains of algae in hope of offsetting the shortage of fossil fuels. In 1996, the Department of Energy shut down the program, concluding that algal biofuels could not compete with fossil fuels in cost. One decade later, President Bush declared that the US was addicted to oil. After that, the algae research program was started again, and capital began flowing into dozens of algae startups. So where is all the algae biofuel? Where is the "green crude" that was hyped up with so much potential? The answer is the same now as it was in 1996. Algae biofuel is expensive to produce and fossil fuel prices are still sufficiently low-cost.
According to a 2010 research study by the Lawrence Berkeley National Laboratory, producing fuel from algae grown in ponds at scale would cost between $240 and $332 per barrel. The current price of a barrel of crude oil is only about $92, no comparison.
Right now, the only hope for algae taking off is for crude price to go up. The algae industry has suffered from "fantastic promotions, bizarre cultivation systems, and absurd productivity projections," according to John Benemann, industry consultant and Ph.D. biochemist with over 30 years' experience working with algae. "Algae biofuels cannot compete with fossil energy based on simple economics... The real issue is that an oil field will deplete eventually, while an algae pond would be sustainable indefinitely."
Even with its economic disadvantage, it is hard to overlook algae's amazing potential. It is incredibly easy to grow and grow quickly. Any homeowner with a pool can attest to that. In days, algae reaches maturity, thriving in all waters: fresh, brackish, and saline. Algae is a terrific absorber of the greenhouse gas, carbon dioxide. They can be grown in arid and semi-arid areas so as not to compete with food crops for land.
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Most importantly, they yield more oil than other biomass feedstocks. In fact, it produces up to 30 times more oil per unit of land compared to oilseed crops like palm and soy.
The problem is the costs in the systems used to cultivate algae, harvest it, and extract its oil. Startups around the world are working on these problems, but the R&D is slow going. These companies are trying all different things, looking for the most cost-effective method. Some grow their algae in ponds, others in clear plastic containers. Some grow their algae in sunlight, others feed them sugars instead. Some use conventional breeding, others use genetic engineering.
The upshot is that from all the experimenting taking place, we will inevitably produce the world's first designer oil. Algae can be grown for a variety of purposes, from transportation fuel to oils for food, from oils for personal care products to industrial lubricants, perhaps even plastics.
Over time, algae costs will go down and fossil fuels will go up. Some algae startup may even come through with a real game-changing breakthrough. Then, hopefully one day, the age of green crude may begin.
By. David A Gabel of ENN.com