Algae as a biofuel feed source : a study on economics, scaling and investment
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- Master Thesis 
The United States is the world’s largest importer of petroleum and is developing liquid fuel substitutes from biomass to displace fossil fuel consumption as a means of energy security of supply as well as secondary interests in reducing greenhouse gas emissions and supporting innovation. Algae based biofuel is a newer technology gaining momentum in the biofuel race due to very attractive growth properties and ease of distribution in current infrastructure. However, cost economics remain an issue. This study applies an experience curve as a basis for quantifying the investment needed for continued learning progress and scale up of algae biofuel production to reach cost parity with petroleum based fuels. The findings indicate investment will be substantial, perhaps exceeding $15 billion if progress is less than anticipated. This serves as the starting point for analysis of potential factions that would make these kinds of investments, their motivation and how investments might occur. Short term investments are best made in research to discover algae strains with high lipid yields combined with high productivity. Investment will most likely be a combination of public and private funding due to societal gains from research spillover effects and private gains from huge market potential and IP protection. Military support has the potential to be a game changer for algae technology. And, government policy support is important in the near term to encourage investment in continued research, development and commercialization.