Please don't merge this with my Alternative Fuels Update thread.
According to the National Biodiesel Board, American biodiesel production has gone from 20 million gallons to 225 million gallons in the past three years. The capacity is much higher. The U.S. has the capacity to make 1.39 billion gallons of biodiesel per year. So why aren't we making more? Simple: the overwhelming percentage of biodiesel comes from soybean oil. When soybeans get too expensive, biodiesel producers cannot make biodiesel cheaply enough to sell it, so they shut plants down.
The foregoing economics have no effect on biodiesel made from algae oil. Because there is no demand for algae oil other than for the production of biodiesel, the only limiting factor for the production of algae biodiesel is the production of algae oil. So here is the big news: PetroSun has announced that within the next three years, it plans to start producing 2.56 Billion gallons of algae oil per year! That is 11 times America's total biodiesel production in 2006. From 1 company. In 3 years. From algae!!!
But that is only half the news. Soy oil is currently selling for $2.81 per gallon. This is why the biodiesel industry needs tax subsidies. PetroSun plans on selling algae oil at a price to shadow petro oil plus transit cost. Today, petro oil is selling for $72/barrel. Using PetroSun's formula, it would sell its algae oil for $1.71 per gallon -- 60% of the price of soy oil!!! No subsidies needed.
To put this in perspective, the U.S. consumes about 63 billion gallons of diesel fuel per year. (There are 42 gallons in a barrel. Figures shown are in thousands of barrels.) Therefore, in 3 years, one company is going to replace 4% of the nation's diesel with algae biodiesel.
And remember - there are several other companies aggressively trying to do the same thing. While not at the multi-billion gallon per year producton level yet, Imperium is close. There is no reason to doubt that we are on the verge of a true energy revolution.
[Note: to avoid confusion, read here that 10 gallons of soy oil produces 10 gallons of biodiesel. It is not like petro oil, where a 42 gallon barrel of oil produces only around 7 gallons of petro diesel.]