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Too good to be true? The Pentagon says it will start testing algae-based jet fuel next year, and it hopes to begin production in 2013. Not only would the ability to produce oil from algae be a boon to American forces stationed abroad (where fossil fuel costs can reach thousands of dollars per gallon in the mountains of Afghanistan) but also it looks to be cost competitive with fuel from gas stations in developed countries. 

Although we shouldn’t get our hopes up after the corn-ethanol debacle, algae-produced fuel promises to produce a fraction of the net carbon emissions that fossil fuel does. It produces far more energy per acre than any of its biofuel competitors, and it can be grown in wastewater. And of course, large-scale algae oil production, if ever feasible, would pull the rug out from under oil-fueled dictators. Money quote from the Guardian: 

The brains trust of the Pentagon says it is just months away from producing a jet fuel from algae for the same cost as its fossil-fuel equivalent. 

The claim, which comes from the Defense Advanced Research Projects Agency (Darpa) that helped to develop the internet and satellite navigation systems, has taken industry insiders by surprise. A cheap, low-carbon fuel would not only help the US military, the nation's single largest consumer of energy, to wean itself off its oil addiction, but would also hold the promise of low-carbon driving and flying for all. 

Darpa's research projects have already extracted oil from algal ponds at a cost of $2 per gallon. It is now on track to begin large-scale refining of that oil into jet fuel, at a cost of less than $3 a gallon, according to Barbara McQuiston, special assistant for energy at Darpa. That could turn a promising technology into a market-ready one. Researchers have cracked the problem of turning pond scum and seaweed into fuel, but finding a cost-effective method of mass production could be a game-changer. "Everyone is well aware that a lot of things were started in the military," McQuiston said.
 


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