Old and busted: Gravy Train. New hotness: Algae Train.
Quite a few of us have been having some fun with President Obama’s energy speech on Thursday, but perhaps none more so than Newt Gingrich. He’s been out on the trail and getting more than a few laughs with one particular portion of the prepared remarks. Those had to do with government’s interest in bio-fuels derived from algae.
Newt Gingrich has been hitting Obama’s energy speech since the president delivered it Thursday, calling the speech funny enough to be on SNL and “something worthy of Leno or Letterman.”
Gingrich’s biggest talking point about Obama’s speech attacks the president for his embrace of investments in biofuels such as those made from algae.
He is referring to a point in Obama’s speech when the president said, “We’re making new investments in the development of gasoline, diesel, and jet fuel that’s actually made from a plant-like substance known as algae.”
On Thursday night, Gingrich mocked the president’s speech in front of an Idaho crowd, by suggesting that he should take a bottle of algae with him and “go around and we can have the Obama solution.”
“And maybe what we ought to do at Newt.org is we ought to get t-shirts that say ‘You choose.’ Gingrich went on to suggest the slogans, ‘You have Newt: Drill here, Drill Now, Pay Less. You have Obama: Have Algae, Pay More, Be Weird.”
Politics is all too often more about image than substance, as Newt knows well, and on the surface he’s found himself a target. Oil from what most people think of essentially as “pond scum” does indeed sound kind of weird. But is it? (You can find a beginner’s guide to how it’s done here.)
Research into this technology has been gong on for quite a while now, and it’s not science fiction. In fact there are some companies who have already established international partnerships to bring a variety of products to market by processing algae. But how close are we to the point where it becomes a viable source for fuel oil? Even Newt himself said we might get there in the next few decades, but those trying to do it today have run into some problems.
Case in point is Solazyme Inc., a South San-Francisco-based biofuel company that made over its product line and is now selling beauty products and nutritional supplements in addition to fuel that can be used in ground and air transportation. But how quickly the new model pays off is to be determined.
On Tuesday, Solazyme posted a wider-than-expected net loss for Q4 2011 of $15.6 million on a GAAP basis, compared with $2.9 million in the same quarter in 2010.
Revenue dropped to $14.9 million compared with $23.2 million in the fourth quarter of 2010…
Learning from failure is also critical. “We were right that algae was the best platform to make oil but wrong about how to do it,” he said.
“It soon became clear we were making renewable oils,” Wolfson said.
A Solazyme food chemist experimented with microalgae and discovered that it could be used as a cosmetic that protects against sunlight or lack of moisture. Moreover algae could also produce ingredients low in saturated fats that can be used in cookies, snacks and other foods.
I’m sure it’s just a coincidence that Solazyme has a name which sounds so much like Solyndra, so don’t worry. But they might have something more in common than that. Solazyme has already gotten more than $20M in federal grants to develop bio-fuels. I’m glad to see that the company is surviving and employing people, but there may be a lesson to be learned here from the fact that they’ve scaled back their efforts to create fuel and are instead making cosmetics and snack food supplements.
Like so many other such efforts, new technologies take time to develop and this one may still wind up producing something good on a large scale. But we don’t appear to be there yet. When the President says we’re going to “focus” on this more, we need to ask if that means pouring more taxpayer dollars into these companies and if we learned anything from Washington’s dalliance with tinkering in ethanol, wind and solar.
If Solazyme can make a go of it and become profitable on their own, that’s great – even if it’s from making skin care products. (And it’s worth noting that they are still producing fuel. In fact, United Airlines recently made their first flight using a 60/40 mix of standard and bio-fuel, and have contracted with Solazyme to purchase more fuel from them each year.) But if they’re going to produce oil on the scale required to replace a significant amount of the fossil fuels we use, they need to show that they can do so in a competitive marketplace. Algae based production of oil obviously works in the laboratory and has been expanded in volume in a few places. But to scale it up requires a huge amount of space, lots of water and other infrastructure support. Until those challenges can be overcome and allow for mass production, this may not be quite “shovel ready” just yet.