Nothing Greener Than Algae

Okay, I am breaking my own golden rule in a way, as I do not recommend any particular stock. Well, I am not really breaking it too much as I am more recommending a sector here, and I am not saying it will make money, just that it makes sense and should make money, eventually. Even if it does not make money, I think it makes sense to support. Go in with you eyes open here as you, like me, could pretty much lose your full investment. Most of all this post is because I think this alternative energy source gets way too little attention and deserves more.

I am talking algae. You know that green stuff that grows in ponds and can be a real nuisance to boaters. Well, it turns out that this stuff is up to 50% oil that can be converted into diesal fuel, and per acre, has the potential to outstrip the energy potential of other crops - like corn and soy - by thousands of percent per acre. Moreover, it can grow in areas where food producing crops cannot grow, so it is not taking food from the starving. And it is carbon neutral. Algae absorbs carbon dioxide as it grows, which it will release as it burns. And due to its need for carbon dioxide to grow, it grows quite well next to high carbon dioxide areas like power plants. Moreover, the part of algae not used for fuel can go to other uses like cattle feed, biomass and the like. In my mind, a near perfect fuel.

Now I have to point out that there are some pretty sticky issues still keeping this near perfect fuel from being perfect. First, the government in the U.S. studied this fuel source for a long time and determined it was not economical. Oil would need to be something like $250 a barrel to justify it as an alternative. Well folks, we were not that far off this past summer and will be going back there in a couple of years or so, so the price is not that much of an issue for me, especially when this fuel source has so many benefits otherwise. Moreover, some of the companies looking at this are developing more efficient ways to grow the algae, and if they can help power plants meet carbon requirements and get credits, that is another source of income.

As I understand it there are still some other technical, yet surmountable, technical issues in dealing with growing the algae without contamination, getting the oil, choosing the right algae for the right products and so forth and so on, but nothing that I suspect cannot be cured with better research funding.

Let me be straight here, I have all of $206 invested in Valcent Products, an algae and verticle growing company (which is another nice story). It used to be more than that but the stock is down a good bit. I am thinking about investing more as I like the prospects and I like to be green.

Here is the Valcent site, which gives more information on algae and their other products. I am in it just for the algae and the verticle growing (low water consumption system) and cannot vouch for their algae system one way or the other. I am linking solely for the informational purposes on algae.

http://www.valcent.net/s/Ecotech.asp?ReportID=182039

Whatever company you choose, I think algae is a good investment choice whether or not you make money on the investment. It just makes sense on too many fronts.

Disclosures: Just those noted above.