Tuesday, August 30, 2011

Algae Crush

In the post “Holding up a Yield Sign to Algae” on August 19, 2011, I promised a fresh look at algal-based biofuel developers.  It is vital for investors to scrutinize their yield claims.  Not all algae is created equal and some of the little guys are not up to the production statistics sometime bandied about by zealous management teams.

A benchmark is needed.  For that we surveyed algae authorities.  Oilgae is an up and coming resource on the sector.  It was their data cited in the August 19th post.  The National Renewable Fuel Laboratory is another prominent resource.  Nonetheless the data provided by industry groups is aimed at supporting their constituents or at least their political position.

The other problem dogging investors in critically evaluating yield claims by algae-based biofuel producers is that the laboratory where most yield standards have been determined and the “factory” are worlds apart.  Apparently algae can get “all choked up” in a large scale environment. 

The National Algae Association provides an excellent forum for the practical aspects of algae-based biofuel production.  Unfortunately the NAA is a bit weak as a data resources.

It appears investors will need to look at each algae biofuel producer and use some common sense to determine if their claims are valid.

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