Apr 2010
Algae Takes Flight
Lee Nachtigal
Is algaculture—the growing of algae to produce biofuel—set to make a breakthrough in 2010?
Last year saw the first algae-powered flight, when a Continental Boeing 737-800 flew over the Gulf of Mexico with one engine running partly on algae oil. The certification process in the U.S. for a 50% algae derived aviation fuel is due to start this year, as the four leading companies in the field—Honeywell subsidiary UOP, algae-based fuel developer Sapphire Energy, chemical producer Elevance Renewable Sciences, and biorefineries developer ClearFuels Technology—receive $100 million in stimulus money.
The most cost effective estimates put the cost of a barrel of algae oil at $100, over twice the price of oil. What has attracted the U.S. government and investors is algae’s potential productivity—providing 30 times more energy per unit than other second generation biofuel crops, while also costing less energy to produce than oil derived from palm or corn.
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Is the cost for a barrell of oil really $50?
Kudos to those pursuing algaculture. We will soon have one of our own in eastern Washington.
In talking about energy sources of the future, however, lets use new economic indicators for assessing the viability of these technologies. This article refers to the cost of oil in the market, without accounting for the tremendous amount of subsidies the industry is privy to that reduces unit cost to such a large degree. Earth Track (www.earthtrack.net) provides in-depth commentary and analysis of misaligned and misrepresented federal energy subsidies. In referring to the market viability of new technology, there needs to be an accounting system whereby two systems can be compared in whole, and accounting for any subsidies received by any technology sector.
In "EIA Energy Subsidy Estimates: A Review of Assumptions and Omissions" by Doug Koplow, he refers to many instances of how EIA analyses can be improved to account for hidden subsidies received by the energy sector. "...Tax, credit, insurance, and minimum purchase requirements are all examples of policies that provide substantial subsidies to the energy industry but that also require a complex process of estimation to quantify. Every future report should contain not only a snapshot subsidy estimate but also a marginal analysis of the impact of subsidies on the levelized cost of new investments. Both the California Energy Commission and the Congressional Research Service have used this approach, as has EIA in some of its other activities.... EIA should not lump all supposedly renewable technologies into a single category. The approach, dominated by large subsidies to corn ethanol, presents an inaccurate pattern of actual support across fuels. Future work should do a better job of segmenting out beneficiary energy forms."
Is there an institution that is accounting for the real cost per unit of oil and other carbon fuel generation and end use?