Economic Impact
Costs
The image below shows the projected cost of production for various biofuels as determined by the Department of Energy by using MTG, pyrolysis, and FT for the “Nth Biorefinery Plant” — which is defined as the projected fuel cost after a number of plants have been built and the learning curve has been mastered. (EI2)
This projects a future best case scenario of $3.50/gallon for the MTG route, $2/gallon for the pyrolysis route, and $5/gallon for the FT route. (EI2)
The image above shows that in 2009 an estimation cost of production for biofuels based on pyrolysis was $7.68/gallon. In 2012 a projected drop in cost was assumed with production via pyrolysis dropping to $4.55/gallon, and then over the next 5 years a projected fall to $2.32/gallon for biofuel production via pyrolysis (again, the Nth plant cost for pyrolysis was projected at $2.00/gallon). The Department of Energy estimate that the largest savings will come from the upgrading step to stable oil for the pyrolysis process. (EI2)
The image above shows the 2012 selling price for algal products in four categories: triglycerides [TAG] from open ponds [OP] at $9.28/gallon, from photobioreactors [PBR] at $17.52/gallon, as well as finished diesel [which requires hydrotreating the TAG] at $10.66/gallon from OPs and $19.89/gallon from PBRs. (EI2)
In the most optimistic case the Department of Energy could only get the projected cost of the fuel down to $6.10/gallon with the use of photobioreactors [PBR] for algae production. More conservative assumptions would project that the fuel derived from PBRs will still be more than $10/gallon. Open ponds show more promise, but algae has been grown in open ponds for many years with the no great economic outcome. Some areas that are specific to fuel production might see some significant cost savings, but other areas have already had decades to work on lower costs like harvesting. It is suspected that the target for open ponds might be achievable, [$5.45/gallon] nonetheless anything lower than that will be challenging. (EI2)
