When it comes to biofuel feedstock in the United States, corn is king. In 2012, more than more than 40% of the US corn crop was used to produce corn ethanol, and this percentage continues to grow . Unless the federal government intervenes, the EPA’s new Renewable Fuel Standards (RFS2) program will require the use of 13.8 billion gallons of renewable fuels in 2013, almost double the amount mandated in 2012 [2, 3].
As opposition to the use of corn as a biofuel feedstock grows among a diverse group—including petroleum producers, petroleum refiners, environmentalists and food processors—the need for a stable, environmentally friendly and economically viable alternative remains a necessity.
One such alternative feedstock being considered is algae, which has a number of theoretical benefits over corn when produced at scale. To begin with, they grow quickly and are more efficient than terrestrial plants at converting solar energy . By some estimates, algae produce 2-20 times more oil than corn or similar crops . They can also be grown domestically, on arid land, in brackish water or in saline aquifers, improving US energy security and freeing up valuable arable land . In addition, they can be harvested almost continuously and they consume waste CO2 .
What’s the catch? Despite an estimated 200 companies working on algal biofuels in 2010, a scalable and financially viable industry does not yet exist . In order to reach this goal, further R&D is needed to help identify the most productive algae strains, establish suitable locations for development and reduce capital costs and production costs. Additional life-cycle assessment studies also need to be done to ensure positive net benefits for governments and society .
So does corn face any competition from algae as an emerging biofuel feedstock? The short answer would be no, at least not yet. Although the algal biofuel market is expected to grow 43% between 2010 and 2015, production projections for 2015 are only a fraction of the current level of biofuel use mandated by RFS2 .
It is clear that the nascent algal biofuel industry must first overcome significant technological and economic obstacles before it can be commercially viable on a national level. Nevertheless, it remains a prospective and potentially disruptive alternative to corn ethanol, especially if guided by efficient policy design that promotes technological advancement.
As a component of the American Recovery and Reinvestment Act of 2009, The Department of Energy provided millions of dollars for algae biofuel research to public and private research institutions, including Arizona State University, the University of California, San Diego and Cellana LLC Consortium in Hawaii. Additional funding for research into algal biofuel technology has come from major oil companies, such as Shell, ExxonMobil and Eni.
Nonetheless, the future of algal biofuel or “green” crude remains uncertain. With an estimated breakeven point of $240 a barrel, it still cannot come close to competing with today’s $90-100 a barrel cost for crude oil . On the other hand, assuming that aggressive reductions in capital costs and production costs for algal biofuel occur over the next 5-10 years, a future national energy mix including cheap algal biofuel remains a possibility.
 Carter, Colin. “Corn for Food, Not Fuel.” New York Times. Accessed February 21, 2013, http://www.nytimes.com/2012/07/31/opinion/corn-for-food-not-fuel.html?_r=1&.
 Zamorano Cadaviz, Alejandro. “US Biofuels in 2013: Stories to Watch.” Bloomberg New Energy Finance. Accessed February 25, 2013. http://bnef.com/WhitePapers/download/280.
 Philp, Jim C., et al. “Biofuel Development and the Policy Regime.” Trends in Biotechnology, Volume 31, Issue 1, 4-6, 20 November 2012. doi:10.1016/j.tibtech.2012.10.001
 Darzins, Al, et al. “Algae as a Feedstock for Biofuels—An Assessment of the Current Status and Potential for Algal Biofuels Production.” International Energy Administration, September 2011. Accessed February 22, 2013. http://www.ieabioenergy.com/MediaItem.aspx?id=6965
 Pike Research. “Algae-Based Biofuels: Demand Drivers, Policy Issues, Emerging Technologies, Key Industry Players, and Global Market Forecasts.” Pike Research. Accessed February 26, 2013. http://www.pikeresearch.com/research/algae-based-biofuels.
 National Research Council. Sustainable Development of Algal Biofuels in the United States . Washington, DC: The National Academies Press, 2012.
 Darzins, Al, et al. February 2013.
 Nash, Keune. “Algae: Fuel of the Future?” National Review. Accessed February 23, 2013. http://www.nationalreview.com/articles/292913/algae-fuel-future-nash-keune.
 Philp, Jim C., et al. November 2012.
 Darzins, Al, et al. February 2013.
 Lundquist, T.J., “A Realistic Technology and Engineering Assessment,” Energy Biosciences Institute, University of California, Berkeley, California. October 2010. http://www.energybiosciencesinstitute.org/sites/default/files/media/AlgaeReportFINAL.pdf
Anoop Singh, Stig Irving Olsen, “A critical review of biochemical conversion, sustainability and life cycle assessment of algal biofuels,” Applied Energy, Volume 88, Issue 10, October 2011, Pages 3548-3555, ISSN 0306-2619, doi:10.1016/j.apenergy.2010.12.012.
Foroohar, Kambiz. “Exxon $600 million algae investment makes Khosla See pipe Dream.” Bloomberg Markets Magazine. Accessed February 24, 2013. http://www.bloomberg.com/news/2010-06-03/exxon-600-million-algae-investment-spurs-khosla-to-dismiss-as-pipe-dream.html.
Fifield, Anna. “Lobbyists Fight Over Ethanol Subsidies.” Financial Times. February 10, 2013. http://www.ft.com/intl/cms/s/0/a2c27506-720a-11e2-896a-00144feab49a.html#axzz2MAAKm0NW.