UPDATES

From: Riggs Eckelberry
Los Angeles, March 20, 2012

Good morning!

It's interesting to see how algae has become part of the Presidential campaign. I love the attention.

Of course, the commentators forget that the algae biomass program was launched under Ronald Reagan!

President Reagan and Algae Biomass

"The vital pivot from hydrogen to transportation fuel as a product from algae was undertaken by the Reagan Administration, and was continued under the Bush Administration.

"The program, in fact, was shut down [under President Bill Clinton because] 1990s energy prices were too low... to support algal biofuels.

"That was in the days of $20 oil. They thought that oil would have to be at something astronomic, like $80 a barrel, for algal biofuels to make sense."

Jim Lane, Biofuels Digest

Hmmm... Are we there yet?

(Note: President Carter launched the Department of Energy’s Aquatic Species Program which was initially focused on using algae to produce hydrogen. The program switched emphasis to other transportation fuels, in particular biodiesel, beginning in the early 1980s.)

The best Defense is a good offense...

Our Department of Defense is doing its very best to push every single button out there to get biofuels going.

Here's an excerpt from a private analyst brief I received yesterday:

"To be clear, the DoD’s biofuel strategy is in an early phase. Volumes being purchased thus far are still on a pre-commercial scale, and we don’t envision that changing much in 2012-2013.

"This is not due to a lack of demand but rather the simple fact that the industry is not currently in a position to supply large volumes. As a result, the DoD’s current efforts aim at supporting the industry’s scale-up, which entails – and the DoD readily acknowledges this – paying above-market prices.

"The Navy and Air Force have implemented test programs for alternative fuels, and the Defense Logistics Agency is signing contracts (and expanding existing ones) with [next-generation] biofuel developers to secure supply...

(Raymond James Energy Brief of 19 March 2012)

No subsidies needed!

But these fuels are themselves quite viable. The analyst finishes by saying:

"A key differentiator of the next-generation (Gen2) biofuel industry compared to many other areas of clean tech is that the economics of most Gen2 biofuels do not depend on subsidies."

That confirms our own study that showed an algae farmer anywhere could product gasoline and diesel from a blend of algae and waste for as little as $2.28 a gallon.

The Internet, GPS... and Algae

And DoD's support is really just to support scale-up of this new technology, as it did with the internet, and GPS, and many other technologies we enjoy today.

So whatever gets said in this campaign season, and no matter who ends up in office, it's a fair bet that gasoline prices will continue to stay high, and that Defense will continue to do something about it, and that something will include algae, which is nothing more than "petroleum done right".

Enjoy the rest of the week!

Riggs and team

Riggs Eckelberry
President & CEO
OriginOil, Inc. (OOIL)

OriginOil and DOE to Develop Renewable Crude Oil for Existing Oil Refineries