Best of the Week
Most Popular
1.US Dollar Crashes, Gold And Bitcoin Skyrocket As Economic Recovery Lie Is Exposed - Jeff_Berwick
2.Now Obama Warns Americans to ‘Be Prepared’ for Disaster… What Does He Know? - Jeff_Berwick
3.EU Referendum - Britain's Immigration / Migrant Crisis Explained - Nadeem_Walayat
4.EU Referendum - British People vs Establishment Elite, Vote LEAVE an Act of Defiance! - Nadeem_Walayat
5.Prominent Billionaire Investors Warn of Financial Crash, Quietly Position Themselves - MoneyMetals
6.Bankers Warn of BrExit Financial Armageddon if British People Vote for Freedom - Nadeem_Walayat
7.Bad U.S. Jobs Report Prompts Stocks Bear Market Rally Towards New All Time Highs! - Nadeem_Walayat
8.Gold And Silver – Friday May Have Marked A Pivotal Turnaround - Michael_Noonan
9.EU Referendum - British People vs Establishment Elite, the Illusion of Democracy and Freedom - Nadeem_Walayat
10.Felix Zulauf: Monetary Stimulation Creates Bubbles, Not Prosperity Nor Growth - GoldandLiberty
Free Silver
Last 7 days
Investors Map Post-Brexit Strategies Amid Global Market Upheaval - 26th June 16
Gold Price Weekly COT Update - 26th June 16
First the UK, then Scotland ... then Texas? - 26th June 16
Stocks Bear Market Resumes or Just More Noise - 26th June 16
Gold And Silver: Security, And BREXIT - 25th June 16
Dow, Euro & Brexit Recap - 25th June 16
Resistance Holding Gold Stocks after Brexit - 25th June 16
Venezuela vs. Ecuador (Chavismo vs. Chavismo Dollarized) - 25th June 16
Gold, Silver And PM Stocks Summer Doldrums Risk - 24th June 16
Here’s Why China “Economic Hard-Landing” Worries Are Overblown - 24th June 16
Jubilee Jolt: Markets Crash, Gold Skyrockets as Britain Takes Brexit - 24th June 16
BrExit Morning - New Dawn for Britain, Independence Day! - 24th June 16
LEAVE Wins EU Referendum - Sterling and FTSE Hit Hard, Pollsters, Bookies and Markets All WRONG! - 24th June 16
Trading BrExit - British Pound Plunges, FTSE Stock Futures Slump on LEAVE Shock Referendum Win - 24th June 16
EU Referendum Shock Results Putting BrExit LEAVE in the Lead Hitting Sterling Hard - 24th June 16
Final Opinion Poll Gives REMAIN 52% Lead, Bookmakers, Markets and Pollsters ALL Back REMAIN Win - 23rd June 16
Does BREXIT Matter? Outlook for Sterling - 23rd June 16
Keep Calm and Vote BrExit - Last Chance to Break Free of EU Superstate - 23rd June 16
Here’s the Foreign Policy Trump and Clinton Really Want - 23rd June 16
Details Behind Semiconductor Stocks Leadership - 23rd June 16
Trading BrExit - Stocks, Bonds, Sterling, Opinion Polls, Bookmaker Odds and My Forecast - 23rd June 16
BrExit Looks Set to Win EU Referendum, Final Opinion Polls Give LEAVE Lead Over REMAIN - 22nd June 16
Proof that the Gold Bears are Wrong - 22nd June 16
Here’s a Trillion-Dollar Investment Opportunity for Those Few with No Debt - 22nd June 16
BrExit to Save Europe from Climate Change Refugee Migration Apocalypse - 22nd June 16
Increase In U.S. Rig Count Will Not Cap Oil Prices - 22nd June 16
Are Copper and China Stocks Set to Rally? - 22nd June 16
SPX May Break Its Trendline - 22nd June 16
Believe it or Not: More Kids Live At Home Now than Since The Great Depression - 21st June 16
EU Referendum Latest Opinion Polls Show LEAVE Halting REMAINs Surge - 21st June 16
British Pound Outlook - BREXIT, Europe and You - Does your vote matter? - 21st June 16
Fascist Victory Behind the European Union - 21st June 16
EU Referendum Opinion Polls Analysis Shows Strong Momentum in REMAINs Favour - 21st June 16
Is It Time to Dump Gold and Buy Platinum? - 21st June 16
Could Central Bankers Be Gold and Silver's BIGGEST Allies? - 20th June 16
Words Still Mean Things – Brexit With Graham Mehl - 20th June 16
Baroness Warsi the Manchurian Candidate Quits LEAVE for REMAIN, Boris Johnson Next? - 20th June 16
FTSE Soars, Stock Markets Bounce on LEAVE Polls Surge, Bookmakers Widen BrExit Odds - 20th June 16
Brexit Would Trigger Devolution of Europe - 20th June 16
Stock Market Week Of Uncertainty - 20th June 16
Will Gold’s Bullish Price Chart Outperform Gold’s 5 Bearish Indicators? - 20th June 16
Bonds And Stocks At All-Time Highs: Are Markets Confused Or Broken? - 20th June 16
Silver Sleeping On the Job - 19th June 16
BrExit Odds Sink, REMAIN Polls Boost by Jo Cox Killing by Radical Right Extremist, Conspiracy? - 19th June 16
How Elliott Waves Tell You When to "Jump In" & When to "Jump Out" of Markets - 18th June 16
Stock Market Inflection Point During Bifurcation - 18th June 16
Gold And Silver – Insanity Is World “Norm.” Keep Stacking! - 18th June 16
Gold Stocks - Bull Markets that Follow Epic Bears - 18th June 16
The Fed Giveth and the Gold Bullion Banks Taketh Away… - 17th June 16
Brexit: "The Vote Heard Around the World" - 17th June 16
Gold Stocks Summer Breakout? - 17th June 16
Stock Investors Get Higher Returns and More Dividend Income - In Less Time With Less Risk - 17th June 16
How to Use the Gold-to-Silver Ratio? - 17th June 16
Inflation, Deflation & Associated Trading Prospects - 17th June 16
Overnight Markets Struggling to Stay Flat - 17th June 16
Gold Price Surges to Highest in Nearly Two Years On Central Bank and Brexit Haven Demand - 17th June 16
Stock Market Thinking Upside Down; Dow 18k Still Key - 17th June 16
Jo Cox MP Terror Attack Killing Claimed for "Britain First" - Witness Report - 17th June 16
Stock Market, Iron Ore, Bitcoin – Is Silver Next for Chinese Momentum Investors? - 16th June 16
EU Referendum Campaigning Suspended Following Shooting of MP Jo Cox, Suspect Named as Tommy Mair - 16th June 16
Why People are Migrating to the UK, Illegal Immigration, Housing Crisis Consequences - 16th June 16
Stocks Fluctuate Following Recent Decline - Bottom Or Just Pause Before Another Leg Down? - 16th June 16
The US Consumer-Driven Economy Has Hit a Brick Wall - 16th June 16
Bitcoin Price Going Parabolic Again, Now At $730 and Up 60%+ In Last Three Weeks - 16th June 16
China's Hard Landing Has Already Begun! - 16th June 16
Crude Oil Price - Oil Bears vs. Support Zone - 16th June 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Why 95% of Traders Fail

Algae a Greener Biofuel Than Ethanol?

Companies / Renewable Energy Jul 03, 2008 - 02:09 PM GMT

By: Jennifer_Barry

Companies Best Financial Markets Analysis ArticleIn my May article, Food Shock , I mentioned that biofuel production was consuming many of the crops normally used for food. Riots have broken out over the sharp price rises of 37% last year, and 16% so far in 2008. Coffee, soybeans and wheat are increasingly diverted to biodiesel production, driving prices higher. Almost a quarter of America's corn crop was distilled into ethanol last year, and the percentage is expected to grow another 10% in 2008.


The U.S. has been heavily criticized for subsidizing corn ethanol while restricting the import of Brazilian sugar ethanol, as sugar is about six times as economical a fuel source as corn. Many experts agree that corn ethanol is not very efficient, but claim it's just a “bridge” to the development of cellulosic ethanol. This embryonic technology is touted as the missing link to America's energy independent future.

However, the 2005 U.S. Department of Energy/Department of Agriculture joint plan to produce 130 billion gallons of ethanol has many flawed assumptions. It presumes a 50% increase in grain crop yields while gathering most of the excess biomass left on the fields. This action would leave them vulnerable to erosion and severe soil depletion, which would decrease productivity. Higher grain production would further stress limited fresh water resources, and lead to increased deforestation as lands were cleared for planting.

Even if higher output was possible, more grain requires the use of much more fertilizer and pesticides. These chemicals are largely composed of petroleum which is the fuel we're trying to use less of!

The government's plan expects 55 million acres will be dedicated to energy crops like switchgrass in the future. However, only 70 million acres are planted with corn today. As there is a limit of arable land, cellulosic ethanol production would chase out much of current food and timber production.

Cellulosic ethanol will not be a cheap fuel. To reach the U.S. mandated 21 billion gallons of this ethanol by 2022, it's projected to require a hefty subsidy of $1.55 per gallon. In addition to the logistical nightmare of trucking a ton of biomass to be processed into 80 gallons of ethanol, capital expenditures at a cellulosic ethanol plant are projected to be two to three times that of grain ethanol plants.

In the alternative energy debate, it's important to question if ethanol is a good idea at all. It lowers fuel efficiency in cars by 30% over the same amount of gasoline. If you are using 10% ethanol gasoline as we must in Dallas, it shaves 3% off your mileage even if it doesn't negatively impact performance. If you switch to E85 fuel, your car will require about 1.5 times as much fuel per mile, and your fuel pump and injectors will have to be larger to allow an adequate amount of energy to reach the engine.

Senator Thune of South Dakota, a major ethanol producing state, claims that ethanol saves the consumer 50 cents per gallon. However, the lower fuel economy overrides that benefit. Ethanol can corrode steel and polymer engine parts that were designed for gasoline, so your repair costs may climb as well. U.S. taxpayers also have to shoulder the cost of ethanol subsidies, so government intervention is hardly free. If the subsidies disappear while mandates remain, the direct cost will jump substantially as well.

Ethanol creates new transportation and safety hassles as well. It can't be moved via pipeline, so it has to be shipped via ship, truck, or railcar. Transportation opens up opportunities for accidents and fires. Unfortunately, most fire departments lack the training and specialized supplies necessary to meet the unique challenges of ethanol blazes. Ethanol vapor is more flammable than gasoline, and its nearly invisible flame can't be extinguished with water.

So if ethanol is not the solution, are we stuck with burning fossil fuels in our cars? Sapphire Energy doesn't think so. Sapphire is a company founded to answer one question, "Why is the biofuel industry spending so much time and energy to manufacture ethanol - a fundamentally inferior fuel?"

Instead of trying to fix problems with ethanol, the founders of Sapphire Energy - a bioengineer, a chemist, and a biologist - set out a year ago to make transportation fuel from a renewable source. They chose a source that is not used to feed humans or livestock - algae. This plant-like organism has a lot of potential as species contain up to 50% oil. While corn can only produce about 20 gallons of oil per acre, algae could potentially yield 20,000 gallons.

Apparently Sapphire has succeeded in converting algae to fuel. The company announced the production of 91-octane gasoline as well as jet fuel. To boost Sapphire's technical team, they hired Dr. Brian Goodall away from Imperium Renewables, as his team delivered algae biofuel for Virgin Atlantic's trans-Atlantic flight.

This start-up emphasizes that their product is not biodiesel or ethanol, as it can be used safely in gasoline engines without need for modifications. This “green crude” can be processed in our current oil refineries, without the need to build a new infrastructure.

Sapphire claims that their fuel is very environmentally friendly. When burned, it has virtually no emissions since it doesn't contain nitrogen or sulfur compounds. Production requires very little water unlike ethanol. In fact, the algae can be grown in brackish or salty water, even wastewater. Another advantage of this “green crude” is that the algae absorbs carbon dioxide from the atmosphere.

ARCH Venture Partners, and Venrock, two venture capital firms, and the Wellcome Trust, a British charity are enthusiastic about the potential. They have invested a total of USD $50 million in the company. ARCH is so confident in the technology that this firm declared their “checkbook is completely open.” With this solid funding in place, Sapphire expects to have a pilot project running in three years, and commercial production in five. The fuel is expected to be cost-competitive with petroleum.

Sapphire Energy isn't the only company researching algae-based fuel. Other start-ups include GreenFuels Technologies of Massachusetts, AquaFlow Bionomic of New Zealand, and Synthetic Genomics of California. Unfortunately, these companies are all in early stage development, and I don't know of any public companies in this area right now.

Even though the public can't invest, this field is definitely worth watching due to the potential for disrupting the energy marketplace. It will take years for “green crude” to enter commercial production even if one of the start-ups is successful, but the impact on ethanol would be enormous. Already there is mass public dissatisfaction in the U.S. with the ethanol mandate due to the rising food prices blamed on this fuel. If the law doesn't change by the time algae-based fuel arrives - which I find unlikely - the pressure would be tremendous. This would be even more true if the promise of cellulosic ethanol was unfulfilled.

Assuming the U.S. government was no longer artificially supporting the corn ethanol market and “green crude” was as powerful as advertised, I would expect a sharp drop in the agricultural markets. Corn ethanol would become functionally obsolete. Grain prices would fall as food would gradually be removed from the fuel production stream. As this disruption in commodities would ripple throughout the U.S. economy and effect my recommended asset list, I will stay alert for any change in the political winds in Washington.

by Jennifer Barry
Global Asset Strategist
http://www.globalassetstrategist.com

Copyright 2008 Jennifer Barry

Hello, I'm Jennifer Barry and I want to help you not only preserve your wealth, but add to your nest egg. How can I do this? I investigate the financial universe for undervalued assets you can invest in. Then I write about them in my monthly newsletter, Global Asset Strategist.

Disclaimer: Precious metals, commodity stocks, futures, and associated investments can be very volatile. Prices may rise and fall quickly and unpredictably. It may take months or years to see a significant profit. The owners and employees of Global Asset Strategist own some or all of the investments profiled in the newsletter, and will benefit from a price increase. We will disclose our ownership position when we recommend an asset and if we sell any investments previously recommended. We don't receive any compensation from companies for profiling any stock. Information published on this website and/or in the newsletter comes from sources thought to be reliable. This information may not be complete or correct. Global Asset Strategist does not employ licensed financial advisors, and does not give investment advice. Suggestions to buy or sell any asset listed are based on the opinions of Jennifer Barry only. Please conduct your own research before making any purchases, and don't spend more than you can afford. We recommend that you consult a trusted financial advisor who understands your individual situation before committing any capital.

Jennifer Barry Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Robert Gooden
06 Dec 08, 15:33
Bio-Fuel R&D firms

Ms Barry's article, "Algae a Greener Biofuel Than Ethanol?" was very informative. There is a young public company in this arena: OriginOil, Inc.

R.Gooden


J. Garton
09 Jul 09, 06:37
Algae biofuel

While the article claims that algae biofuel is 'environmentally friendly' and even absorbs CO2, it fails to note that when the biofuel is burned, all that CO2 is released back into the atmosphere. So algae might be a better biofuel source than corn, but it doesn't help us deal with reducing CO2 emissions.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife