The international oil and gas industry will see red on learning that the US Department of Energy has provided $500 million to some firms in San Diego to produce oil from algae.
Oil from algae has already powered a jet and battleship, but it must make sense financially, according to Marney Cox, chief economist with the San Diego Association of Governments.
"The price of oil was way up," Cox said by way of defense. "It peaked at about $147/bbl. Gas prices were going up. People were looking for ways to cut down on their energy consumption and expenses."
That is an attempt to justify the half-billion-dollar investment, but what about suppliers and allies overseas? Consider remarks by Qatar's Emir Sheikh Hamad bin Khalifa Al-Thani at last week's World Petroleum Congress in Doha.
Climate change
While climate change and the worsening problem of global warming are "facts that leave no room for argument," Al-Thani said it is important to develop renewable energy without prejudice to oil and gas exporters.
To meet growing demand for oil and gas requires "enormous investments" by exporting countries, the Emir said.
"It is not reasonable to ask the exporting countries to meet the future needs for these two commodities while at the same time the consumer countries carry out unilateral activities that augment the risks facing these investments," Al-Thani said.
That is reasonable. After all, what's the point in investing to meet demand when the demand may not be there? But more to the point, why invest in anything when your consumer is trying to undermine your investment?
The Emir's statement coincided with reports that the US Department of Defense—which maintains military bases in Qatar, among other locations—unveiled plans for its largest-ever biofuel purchase.
Carbon footprint
US Navy Sec. Ray Mabus said the 450,000 gal were part of the "largest single purchase of advanced drop-in biofuel in government history." The biofuel also "comes from nonfood sources and does not increase the carbon footprint."
The purchase aims to meet US President Barack Obama's goal "to achieve more energy security by finding ways to lessen our dependence on oil and fossil fuels," Mabus said.
DOD will purchase biofuel made from a blend of nonfood waste, including algae produced by Solazyme and used cooking oil from Louisiana-based Dynamic Fuels LLC, a joint venture of Tyson Foods and Syntroleum Corp.
The fuel will be used in the Navy's demonstration of a "green strike group" in 2012. By 2016, the Navy aims to send a carrier strike group on a normal, multimonth deployment using 50% biofuel.
Do you think the ships will visit Qatar?
More Oil & Gas Journal Current Issue Articles
More Oil & Gas Journal Archives Issue Articles
View Oil and Gas Articles on PennEnergy.com
