Over the past decade, “biofuel” has been a major buzz word in the world of
clean energy and environmental science. As the topic of advanced biofuels
continued to trend over the years, investments and studies ballooned
accordingly. Now, however, with a bit of hindsight it has become clear that
the vast majority of chatter and speculation about the “next big biofuel” set
to change the energy landscape was just hot air.
Many claims made by energy startups, blogs, and think tanks were a
bit short of credible, to put it lightly. A laundry list of companies
over time claimed that they would be able to efficiently convert biomass like
straw, wood chips, algae, and other organics into biofuel in an economically
viable way. Some of these hopefuls even claimed to be able to do so for as
little as a dollar per gallon.
Investors and taxpayers alike funneled money into ventures that had little
to no chance of success. Investment went to technologies that had been
abandoned decades before, due to economic impracticality. The most striking
example can be found in the case of cellulosic ethanol. Converting straw into
ethanol is a prohibitively expensive venture, but companies continued--and
still continue--to try. What’s more, despite the fact that “commercial”
cellulosic ethanol is only being produced at a very small fraction of the
projected volumes, it’s currently being sold into the fuel supply, in large
part thanks to heavy subsidization from the Renewable Fuel Standard.
Coming in second, only behind cellulosic ethanol, as the most overhyped
biofuel is biomass sourced from algae. The concept is not nearly as
far-fetched as producing fuel from straw. Some species of algae do produce
oils that can be converted into fuel, and crude oil itself is essentially
prehistoric algae and plankton. That being said, we are not anywhere close to
the point of making this process economically viable. Removing all waters and
oils from the algae and providing the perfect balance of light and CO2 to
successfully cultivate the finicky plants on a mass scale is currently a
staggeringly inefficient and expensive undertaking. The waste here is not the
research--perhaps someday this will be a viable avenue--but the massive
influx of cash and government funding into companies that loudly claimed to
be able to create this industry in the short-term. Related:
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One by one, the vast majority of these algae biofuel companies who touted
themselves as the next big thing went out of business. Last year Greentech
Media published
a far-from-complete list of 24 companies that had fallen victim to what
they termed the “great algae biofuel bubble”. Those that have not closed
their doors entirely have moved into other, more profitable corners of the
market for algae byproducts, such as cosmetics, nutraceuticals, pet food
additives, and other specialty products.
The algal biofuel bubble was created and driven by a number of factors. Of
course, there were CEOs, entrepreneurs and investors making outrageously
outsized claims about their company’s capabilities and the future of
algae-based biofuels, but also to blame is the U.S. Department of Energy,
which was granting enormous amounts of funds to these ventures through its
bioenergy technologies office. And then there are all of the industry
advocates, journalists, and bloggers who fed into the hype and supported
claims that commercially viable algae-based biofuels were just around the
corner. One of the most glaring examples of those spreading overblown claims
comes from Jim Lane of Biofuels Digest, who published a stunningly incorrect
market forecast that predicted that algal biofuel capacity would reach 1
billion gallons by 2014.
Perhaps the biggest tragedy in the great algae swindle is that it is
certain to suppress investment into continued research into biofuels. It can
no longer be denied that we certainly don’t have the technology to create
competitively priced algal biofuel, but that doesn’t mean we never will. Some
parts of the algae hype are very understandable. Certain species of algae
contain 40 percent lipids by weight, which can be converted into diesel,
synthetic petroleum, butanol or industrial chemicals. No company has been
able to build a successful business model on this principal, but that doesn’t
mean they never will.
By Haley Zaremba for Oilprice.com
