Kelp is on the way to help with high gas prices

But Obama’s lat­est green panacea will be too lit­tle, too late

The Washington Times Daily - - Metro - By Thomas J. Pyle

In an at­tempt to calm the coun­try’s grow­ing con­cerns about U.S. en­ergy pol­icy and high gas prices, Pres­i­dent Obama ad­dressed the na­tion last week from the Univer­sity of Mi­ami, in part call­ing for new sub­si­dies for fu­els made from al­gae. His claim: “We could re­place up to 17 per­cent of the oil we im­port for trans­porta­tion with this fuel that we can grow right here in the United States.”

With gas prices on a glide path to a $4 per gal­lon na­tional av­er­age by May, the pres­i­dent is no doubt mo­ti­vated to fumble around for new ideas. The fact re­mains, how­ever, that the tech­nol­ogy does not yet ex­ist to turn al­gae into fuel on a rea­son­ably priced com­mer­cial scale. While al­gae-based fu­els may hold prom­ise in the dis­tant fu­ture, there’s a big dif­fer­ence be­tween con­duct­ing re­search in a lab and trans­lat­ing it into a real-world so­lu­tion. Ac­cord­ing to a re­cent study, to re­place 17 per­cent of the oil we im­port, al­gae would need to be planted on an area of land roughly equal to South Carolina and it would re­quire 350 gal­lons of water for ev­ery gal­lon of al­gae­fuel cre­ated.

If the pres­i­dent’s prob­lem with oil stems from con­cerns about price volatil­ity and al­leged en­vi­ron­men­tal im­pacts, why is he now propos­ing to re­place oil with a po­ten­tial fuel source that would re­quire mil­lions of acres of land and bil­lions of gal­lons of water to pro­duce at a wildly ex­pen­sive price?

Even if al­gae-based fu­els could be com­mer­cial­ized to­day, the need for fur­ther tax­payer-funded sub­si­dies is both un­nec­es­sary and im­proper. First, Congress has al­ready man­dated that re­fin­ers blend 2 bil­lion gal­lons of bio­fuel into gaso­line in 2012 alone. In other words, there’s al­ready a lu­cra­tive mar­ket in place for al­gae-to-fuel in­dus­tries thanks to gov­ern­ment man­dates, how­ever ill-con­ceived. Sec­ond, the gov­ern­ment should not be in the busi­ness of pick­ing win­ners and losers and has a hor­ri­ble track record as a ven­ture cap­i­tal­ist any­way. And yet with this lat­est pro­posal, it seems there is no end in sight to this type of med­dling in the en­ergy sec­tor and the re­sult­ing higher costs to con­sumers.

Rea­son­ably priced al­gae-based fuel is cur­rently a con­cept. Us­ing it in the man­ner that Mr. Obama pro­poses would be ab­surdly in­ef­fi­cient com­pared to mak­ing fuel from crude oil, and it would send the cost of trans­porta­tion fuel into the strato­sphere — or at least to Euro­pean lev­els, much like En­ergy Sec­re­tary Steven Chu has wanted. De­spite this ob­vi­ous flaw in the pres­i­dent’s lat­est scheme, he had no prob­lem dis­miss­ing calls for greater ac­cess to Amer­ica’s vast en­ergy re­sources as a “bumper sticker” rather than a strat­egy. To fol­low the pres­i­dent down the al­gaepaved path to en­ergy se­cu­rity, Amer­i­cans must ig­nore the fact that tril­lions of gal­lons of do­mes­tic oil is avail­able to­day at much more rea­son­able prices than the ad­min­is­tra­tion’s al­gae farm.

Mr. Obama would like you to be­lieve that no amount of drilling would have an im­pact on gas prices or en­ergy se­cu­rity, and that we’ll al­ways be at the mercy of global price fluc­tu­a­tions. It is sim­ply not true. Ac­cord­ing to a re­cent re­port, the to­tal re­cov­er­able oil in North Amer­ica ex­ceeds 1.7 tril­lion bar­rels, with 1.4 tril­lion bar­rels in the United States alone. That’s more than the en­tire world has used in 150 years, and suf­fi­cient to fuel the present needs of our na­tion for the next 250 years.

There’s no doubt that meet­ing the world’s grow­ing en­ergy de­mands will re­quire var­i­ous re­sources to work in tan­dem. Some­day, bio­fuel from al­gae may be one of them. Even with­out gov­ern­ment sub­si­dies, oil com­pa­nies al­ready are rec­og­niz­ing that it’s in their best in­ter­est to re­search such al­ter­na­tives. Exxonmo­bil, for in­stance, ex­pects to in­vest more than $600 mil­lion to­ward the re­search and de­vel­op­ment of bio­fuel from al­gae.

This isn’t the first time the gov­ern­ment has taken a keen in­ter­est in giv­ing a leg up to a not-quite-ready tech­nol­ogy. Last year, the En­vi­ron­men­tal Pro­tec­tion Agency em­ployed a sim­i­lar tac­tic when it man­dated that U.S. re­fin­ers must blend cel­lu­losic ethanol into petroleum prod­ucts or pay a fine. Un­for­tu­nately, that ethanol wasn’t com­mer­cially avail­able. As a re­sult, re­fin­ers owed $6.8 mil­lion in penal­ties last year for fail­ing to use nonex­is­tent fuel — a fee that ul­ti­mately will be passed on to con­sumers at the pump. This year, re­fin­ers ex­pect to pay even more as the EPA has in­creased the quota from 6.6 mil­lion gal­lons to 8.65 mil­lion gal­lons.

Mr. Obama’s “all of the above” en­ergy plan is long on rhetoric and short on re­al­ity. His lat­est speech is a re­minder that when it comes to real so­lu­tions to higher en­ergy prices, the pres­i­dent is ei­ther clue­less or cal­lously in­dif­fer­ent.


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