The long road ahead for algae-biodiesel venture

Remember BP’s announcement of a small investment in Martek, a company trying to make biofuels from sugar with algae?

That $10m investment by BP was only a tiny fraction of the shrinking pot of money it has allocated to renewables, but it’s pretty small beer for Martek too, according to the Washington Post:

Martek’s annual revenue was $352 million last year, nearly 90 percent of which came from sales to baby formula manufacturers. Using algae, Martek makes DHA, an omega 3 fatty acid that has been proven to be important for brain and eye development in babies. As the only company that makes what is regarded as a “clean” DHA product — other manufacturers offer DHA in the form of fish oil derived from tuna and salmon — Martek’s product has cornered the U.S. market.

The story quotes two analysts, one of whom describes the investment as a “small bet” on a “long shot idea”. The other points out that genetic engineering of the sort needed to make a marketable biodiesel product, takes “a long, long time”.

The more interesting points come from Martek itself:

In theory, Martek President David Abramson said this week, turning algae into the type of fuel BP could use isn’t a remarkable accomplishment. The larger, more important trick would be to develop a product for a price that matches or beats the cost of fuels used by vehicles today.

“This is very doable in a lab, if you don’t care about the price,” he said.

Related links:

Affordability Martek’s problem as it looks to turn fuel into algae (Washington Post, 20/08/09)
Back to petroleum (FT 07/07/09)
BP’s jatropha venture: In case you were wondering (FT Energy Source, 17/07/09)

Energy Source is no longer updated but it remains open as an archive.

Insight into the financial, economic and policy aspects of energy and the environment.

Read our farewell note

About the blog

Archive

« Jul Sep »August 2009
M T W T F S S
 12
3456789
10111213141516
17181920212223
24252627282930
31