There may not be a hotter up-and-coming industry than bioenergy. With all the green initiatives to protect our planet and conserve our dwindling resources, the industry is flourishing, but this is still only the tip of the iceberg as decades of exponential growth are anticipated. Companies late to enter the picture may still be finding a spot, but they will be sharing space with established industry influencers such as OriginOil, Inc. (OTCBB:OOIL) and Solazyme, Inc. (NASDAQ:SZYM).
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Rebuilding the Biofuel Boom
Biofuels have been getting attention for a number of years with corn-based ethanol as a pace horse sending stocks such as Pacific Ethanol (NASDAQ:PEIX) from $1.40 to $20. But… other factors such as questions of true viability, subsidy issues, tax credit revocations and cropland displacement have certainly thwarted optimism, perhaps somewhat unjustifiably. The reality is that ethanol is a permanent part of gasoline and will be a valuable commodity for the foreseeable future. How it is derived is the point in question. As such, investors are on the prowl for entry levels on the next hot biofuel and many of savvy are turning to the algae industry.
As a preferred biofuel feedstock, as well as other applications, algae technology is still in its infancy, but rapidly being realized for massive potential. Extracting and separating oil contained inside of algae cells provides a product which can be refined into many types of fuel, including diesel, gasoline, jet fuel, and even ethanol.
Outside of the industry, many may not even know about it. Inside the industry, however, the buzz is strong and garnering mainstream attraction day by day. The new boom is about to begin.
Why Algae?
Just for starters, algae is far more efficient for converting solar energy into chemical energy than terrestrial crops. This bridges the expansive land area issues associated with corn and soy (two common bases for biofuel) production. Moreover land and water required for algae doesn’t have to be arable or potable, respectively. This makes areas such as the desert Southwest of the U.S. usable, when in many other instances it is not. As such, algae is no competition for precious food resources.
The Trend Shift and New Catalyst
An October article in Algae Industry Magazine.com focused on the aviation industry as a catalyst for algae feedstock explosion. More succinctly, the article stated “Jet fuel will prime the pump for algae’s increasing dominance as the global renewable fuel of choice.” It also noted Boeing’s (NYSE:BA) biofuel-powered non-stop flight from Seattle to Paris as a showcase of the feasibility of biofuel for jets. While that flight may have been the “Wright Brothers” type of milestone, Solazyme was back in the news demonstrating mainstream uses for its biofuel. According to the news, United Airlines (NYSE:UAL) has made the first U.S. commercial flight using Solajet™, a blend that includes 60 percent petroleum-based jet fuel and 40 percent biofuel. Solazyme has made several large-scale sales of its algae-based biofuel product, including a massive order for the U.S. Navy. The Naval order goes hand-in-hand with government initiatives to slash fossil fuel use by 50 percent over the next decade.
The trend shift is happening worldwide. For example, Australia’s largest ethanol producer, Manildra, has announced plans to diversify in algae.
Wending way for further new technologies is OriginOil, Inc. The company’s technology helps algae growers extract oil from algae for use as a feedstock for the commercial production of transportation fuels, chemicals and foods. In one fluid process, OriginOil’s revolutionary technology dewaters and breaks down algae for its useful products, overcoming one of the greatest challenges in making algae a viable replacement for petroleum. The Company intends to issue licenses for its technology and enable algae producers to reach commercialization, reduce costs and cut carbon emissions.