I went to the Traders Expo a few days back. Always nice to drive
to the city with no traffic. One of the things you get when you register for
the show is a "swag bag" -- a combination of promo materials,
magazines and a Fidelity pen.
Later at the Starbucks I sorted
through the goodies. I came across two interesting magazine acticles
on bio-deisel. In case you don't know, I saw the movie "Fields of
Fuel" at the Sundance Film Festival and become a tree-hugger overnight. It's all about green, baby!
Here's
what I learned from a couple of articles I read. First, bio-diesel
will have limited supply because it is an alternative fuel that
currently costs more than conventional diesel and produces less
energy. One bio-diesel supplier, 11 Good Energy (private company)
accepted the current realities of biodiesel and then created a new
bio-diesel mix called G2 Diesel. It is a unique blend of bio-fuels
that has a number of advantages.
Second,
I learned that if soy is needed to support mass production of
bio-deisel, The USA will likely fall behind Brazil in the production of
soy. This production advantage will further be intensified because of
the weakening of the dollar relative to the Brazilian Real.
Finally,
an exciting bio-deisel production method is coming from an early stage
company called Solazyme. The site called treehugger.com (yes, it's a
true magazine) featured an article about Solazyme. The news was that
Chevron (CVX), the number two oil producer, has agreed to test and
develop Solazyme's process of creating bio-diesel fuel using algae
grown in the dark, feed by sugar. The claim is that the algae grown in
these conditions will be 1,000 times more efficient at producing oil
used for fuel production. The sugar is cellulosically-derived sugar
that comes from agricultural prducts. The advantage of algae
production, versus ethanol production, is that the algae by-product is
a form of oil -- which naturally separates from water. Ethanol has to
be distilled.
This explains some pros and cons.
Producing oil from algae has a nice ring to it. But check out his story on a General Motors
(GM)-supported project that uses a gasifcation process to break-down
feed stock, or common trash, into hydrogen and carbon monoxide and then
uses a genetically-engineered micro-organism to create pure ethanol
from these gas elements within a water bath. Wow. If you understand that you probably got an "A" in organic chemistry. The name of the
company is Costaka -- located just outside of Chicago.
Costaka believes it can produce ethanol for less than $1.00 per gallon
by 2011. "Making ethanol for $1 per gallon isn't just a game changer.
It's a whole new ballgame," says David Cole, chairman of the Center for
Automotive Research, an auto industry consultancy. E85 fuel that
retails for even $2 per gallon will steeply undercut gasoline's price
and significantly reduce U.S. oil consumption."