Wednesday, July 14, 2010

Buh-Bye Big Oil, Hello Big Algae

Burning Algae: America's Green Crude Revolution

BP's Gulf of Mexico Disaster and America's Own Private Dead Sea

Hillary Clinton said “never waste a good crisis.” I have no idea how extensively invested or not the Secretary of State and the former president are in biofuels, but if they are, no one can ever accuse the former first couple of not being red-blooded, astute and enterprising agents of personal and political change. Only a dope would miss out on lucrative alternative energy investments, even if they're longterm. And that goes for current and ex-politicos alike. Besides, nobody ever said that holding high office led to the poor house, although maybe it should to keep them honest. But to read articles like this that would suggest a despicable cause and effect link to the BP disaster and President Obama's investments, for example, you'd think that no one with financial portfolios should ever make a buck. (Again, this is not to say that if someone deliberately turned the Gulf of Mexico into one big, gigantic toilet, they shouldn't meet Lucifer's own bitch, Mother Nature in the shower for one infinitely timeless, long, hot soak of acid rain with a shark-tooth coated loofah scrub. Forever.)

Could BP's monumental disaster in the Gulf of Mexico potentially deliver a timely, silver lining payday for at least a few investors and transitional enterprises experienced in reaching into government coffers to fund private R & D start-ups and partnerships? Leaving Big Oil for Big Algae may be a sign of the times, ushering in shifts of investments and new investors from unlikely sectors alike.

Take technology billionaire Bill Gates who backed Sapphire Energy, an algae start-up based in San Diego. Gates now has a distinct interest into using the power of pond scum to replace fossil fuels, quite possibly not unlike his legendary hiring practices of substituting cheap workers for educated Americans. In 2008, Bruce Bigelow at Xconomy reported that Gates backed the alternative fuels company which didn't at the time want to “get caught up into the hype”:

"Sapphire Energy has not provided many details about its technology since CEO Jason Pyle stepped into the limelight six months ago to announce the San Diego startup has developed a revolutionary process for turning pond scum into high-octane gasoline.
I have no intention of being secretive,” Pyle told me at the inaugural networking meeting of the newly formed San Diego Biotechnology Network, or SDBN. But after seeing the effects of the boom-and-bust cycle in two recent tech bubbles, Pyle says, “My goal is to maintain a serious and thoughtful approach in a frothy market. I don’t want Sapphire to get caught up in that hype.”

Certainly, keeping a young company's secret sauce under wraps is almost as common as venture backed start-ups with ties to the Beltway who know how to secure government subsidized handouts that stick U.S. taxpayers with the bill for their own lucratively free lunches. But now that BP's unprecedented environmental disaster down in the Gulf of Mexico is said to render the once bio-diverse ocean ecosystem into a dead pool that will, however, create an abundance of algae, will BP's coincidental accident in the Gulf of Mexico successfully transition into corporate America's own private algae farm?

Could algae be the new black when it comes to energy fuels? Is Sapphire Energy - which also hosts a former BP executive on its management team, president Cynthia “C.J.” Warner, be the real deal? 

Commenter “Pappa Daddy” says not so much below:

Sapphire Energy sounds like a scam. Sapphire says their “green crude” is chemically identical to gasoline. (Sirens going off!!!) GASOLINE is made up of varying chains of hydrogen and carbon. How does something chemically identical to gasoline not produce CO2 as a by-product? Any chemical engineers out there? As we’ve seen recently with the Maddow investment scam, because someone has money does not make them a good investor…or because Bill Gates knows software doesn’t make him a chemist.
These companies are currently in business to milk up government funding and then disappear (or grab subsidies and disappear). There will be US government grants and loans pissed away soon under the new administration to anyone who sounds like they know anything about renewable energy. Banks are not going to loan these people money. The only place they will be able to get it is from our fearless leaders in government. There is NOT ONE independently verifiable algae fuel production facility on Earth. If there is please point it out and tell me where I can buy some “green crude”. Even a long-term pilot plant would do.
That mental retard Rep Inslee from Washington state is a supporter of Sapphire. You can find his incoherent speech on the House floor on youtube.”

Others conclude that the algae market, while promising, is “fairly far off” from making a dent into replacing fossil fuels for capital intensive reasons and consequently would even be a lousy stock for public investors:

Algae has great promise for producing liquid fuels in sufficient quantity to replace petroleum, and it can do so without using excessive water or farmland. That potential, however, is fairly far off. The technology is capital intensive and far from commercialization, a combination almost certain to make investors in the public stocks poorer rather than richer. If and when fuel made from algae is available in significant quantity to make a dent in our thirst for fossil fuels, it will probably have been developed by companies that public investors cannot currently buy. Stock market investors should wait until this industry matures from its current infancy to something closer to adolescence. Buyers of the current batch of infant companies are likely to suffer the fate of other new parents: many sleepless nights.”


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