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       While the debate about corn ethanol rages on (Is it driving up food prices? Does it take too much energy to produce?) a new green fuel option is creeping into the market: algae.

       Fuel made from algae is still in the experimental stages, but it looks very promising. First, algae require a lot of carbon dioxide to grow, producing carbon neutral fuel. Second, algae produce over ten times more fuel per acre than corn and other first generation biofuels. Third, “green crude” from algae does not spark the food vs fuel debate. Algae flourish in waste water and thrive in places where food cannot grow. Further, nobody but my crazy cousin Charlie eats algae in any quantity, so there is no impact on food prices.

       A number of start-ups are racing to bring green crude to market. Solazyme is currently testing algae-diesel in regular diesel Mercedes C320s---no modifications needed. Other companies’ algae-based jet fuels have powered successful test flights by Continental and Japan Airlines.

       There is no consensus on how long it will take to commercialize algae fuels---estimates range from 2-10 years. Similarly, there’s no agreement on the crude oil price that makes these fuels competitive---estimates range from $40-$80 per barrel. However, Bill Gates has invested heavily in an algae energy company, and President Obama has mentioned algae several times when talking about his energy initiatives. Who knows---we may soon see green covered ponds at Microsoft’s headquarters in Redmond, or in the White House Rose Garden.

We should think about...
  • Are we staying as up-to-speed as we should with alternative energy sources that could impact our business?
  • Should we spend less time worrying about the food vs fuel dilemma?
Sources: BBC 2008; Green Fuels Forecast 2008; Portfolio 2009;
Scientific American 2009; Time 2008
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