Financial downturns create a rush to find alternate sources of income. There are never a shortage of opportunists to steer those seeking a hedge against shortfalls in income or loss in investments, towards risky ventures.
The "Green Revolution" is one of the areas in which shady operators have taken root during our worldwide financial crisis.
Biofuels were a scam artist's dream even before the economic downturn, but they have become even more attractive to those who are willing to separate the unwary from their hard earned cash.
Oil from algae has gotten considerable press since the last oil price inflation. One hundred dollar a barrel oil opened discussion of the need to find alternate sources of feed stocks for the transportation industry.
The first alternate fuels initative was started under Jimmy Carter's administration following the oil import problems of the '70's and money for that initative was halted during the Clinton administration during times of relatively cheap oil.
It simply was not cost effective to spend research money on expensive production strategies during a time of "plenty".
Many would argue that the rise in the price per barrel of oil of two years ago helped produce our present financial situation.
Regardless, the present economy has spawned the usual crop of con artists and algae has attracted it's fair share of the group.
You don't have to search for information about the potential for algae to produce a large share of our fuel requirements. Large corporate groups are announcing their committment to fund milllions of dollars in research to produce viable amounts of biofuel from algae.
Both Dutch Royal Shell and Exxon/Mobil have placed television and print ads declaring their committment to algae research.
Make no mistake! I applaud their efforts.
However the widespread attention this generates provides the impetus for investors to seek an avenue into the potential revenue stream that this research will produce.
In this fertile field of speculation, the unprincipled sow their seeds of fraud and build their web of deception.
Here are some questions the well informed will ask any entrepaneur offering participation in the field of oil from algae profit structure.
If the offer is to "Make biodeisel at home from algae.", question how the power requirement for extraction of the oil contained in the algae is calculated.
There are several ways to extract oil from algae but none of them are, at this time ,economical.
More over, some methods leave a toxic residue which raises issues of disposal and the attendant cost thereof.
Even if you could extract the oil it would profit you very little to fuel your farm tractor but be left with an EPA "Super Fund" site.
There is a method developed by the University of Texas at Austin, that uses an electromechanical process that results in non-toxic residue that is useful as feed stuff for livestock. Sounds like a win/win until the results are further reported that the cost of building and powering the process is prohibitve at this time when compared to the cost of petroleum production.
There are also offers to sell bioreactors in which to grow your own algae which is touted as being readily marketed. There are a limited number of facilities processing algae at this time and unless you live withing a few miles of one of them, it will cost more to transport the algae than it will produce in revenue.
There's also the claim that production of algae is potentially profitable as a cap and trade industry.
Since algae sequesters carbon only until the algal oil is burned as fuel there is no net reduction in carbon once the biofuel is used.
Admittedly, carbon can be sequestered if part of the algae is reduced to biochar and worked into the soil as fertilizer, but research has not shown how long the sequestration lasts so cap and trade revenue is not available under present carbon trade regulations. Harvesting the algae once it has been grown is more than a simple filtering with a pair of panty hose and reuse of the water is problematic once the algae has been collected. Again the water, depending on the feed stock from which the algae gains nutrition can leave a contaminated by product.
Questioning the amount of water needed for varying levels of production is another area the wise investor will inquire about.
The proffered bioreactors which you find for sale as a grow your own opportunity will also need to be compatible with the type or strain of algae you choose to grow.
I have not seen an indepth discussion of the biology of algae with any of the offers and the biology of the algae is an important aspect of growing enough algae to be profitable.
There are many strains and types of algae and other organisms that grow under the same conditons as algae and sometimes are mis-identified as such. Some grow in salt water and the mineral composition of the water, either salt or fresh, is critical to the level of production.
Successful algae growth is more problematic than keeping a saltwater aquarium at peak habitability.
There are also processes of genetic manipulation to create algal species that produce hydrocarbon rather than plant lipids. These are presently showing great promise as a method of reducing the number of steps in producing a usable refined fuel. Despite that promise, the transportation and extraction are still problematic and not profitable.
Beware the purveyor that states a definitive figure for the production of algal oil to the acre. There certainly is an optimum figure, but it flucutates wildly with so many variables that a projection of your assured success rate is not possible and an honest and informed company would not state a fixed quantity with income figures as a sales tool.
In short. Algae production is farming and it has all the attendant handicaps of any farming venture. Not least of which are weather and sunlight as well as water.
Like farming, there must be a distribution system in place in order for a farmer to get his produce to market. Presently there is not a comprehensive distribution network for algae in the raw or for algal oil itself.
This is problematic for either the investor who wishes to be a producer or the investor who wishes to invest in someone else's production facility.
As an historical caution one need look no further than the Ostrich boom of the 1980's. A decade into the fad, there were next to no facilities processing either ostrich meat or hides. Being unable to market the production of the big birds, ostrich ranchers became frantic to get rid of the expense of raising and feeding a creature with no economic worth. In south Texas it was not unusual to encounter "wild" ostriches wandering the caliche senderos of the brush country.
The upside of algae is that it will be easier to return to the wild.