That doesn't sound so bad

That report came out in 1998. In 1998 according to [link|http://www.eia.doe.gov/emeu/cabs/chron.html|http://www.eia.doe.g...u/cabs/chron.html], the price of oil was about $15/barrel. So with aggressive assumptions, they are saying that you might be able to produce biodiesel for $30/barrel. Given current oil prices, that doesn't sound so bad! With less aggressive assumptions it is probably safe to say that you can do it for $60/barrel. (Which is a figure that rings a bell for me, I think that I've seen it elsewhere.) And I'm willing to bet that if people began doing it on a large scale, they would find efficiencies that would bring the price down from that.

As I said above, prices can be temporarily high without making biodiesel make sense (because who wants to invest in it only to see prices go back to $15/barrel). But in the long run if prices go up and stay up, it is a very feasible alternative.

Cheers,
Ben

[link|http://www.distributiondrive.com/Article15.html|This] seems to be from 2002, but it doesn't include algae.

Some numbers from the UK:
[image|http://www.dft.gov.uk/stellent/groups/dft_roads/documents/graphic/dft_roads_028393-2.jpg|0|UK Biodiesel production costs|378|646]

The above graph from a UK government report from April 2004 shows that their production costs for biodiesel made from waste vegetable oil (WVO) is a little more (~ 20% more) than the cost of diesel from crude. But that's mainly due to the historically low price of WVO at the moment. However, the price would go up significantly (due to the lack of supply) if biodiesel production increased significantly. The recent spike in crude prices would tilt the balance in biodiesel's favor, but maybe not enough to make it economical to use other vegetable oils like imported palm oil. (Rape seed oil is produced in the UK.) Algae again isn't mentioned. More on the UK's biofuel stuff is [link|http://www.dft.gov.uk/stellent/groups/dft_roads/documents/page/dft_roads_028393-04.hcsp|here].

I would hope that the US DOE is intensively looking at biofuels with crude being rather expensive and the dollar being rather weak, but their web site for [link|http://www.eere.energy.gov/biomass/|biomass] projects being unresponsive, and with the administration not saying anything public about it, doesn't give me a good feeling.

Cheers,
Scott.

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