The other thing that can drive the economics is the price of oil. Biofuels took off in the last decade as the price of oil rose from $20 to nearly $150 a barrel. A global recession has reduced demand, and fracking is usefully augmenting supply, but a price spike on oil could change the equation overnight.
Philosophically, I'd make the same argument about solar power. A lot of people on FR react reflexively against any favorable mention of solar. This is the understandable result of decades of trench warfare against greenies who are opposed to all conventional fuels and want to launch us into a solar future, on the basis of truly massive subsidies and much higher energy costs. And of course, I agree that such utopian schemes must be resisted.
But that said, enormous work has been done in the labs, and the costs of solar have come down dramatically. People need to pay attention to the current numbers. Solar is winning ever-larger markets for off-grid applications, and there are a number of solar technologies that could, at long last, emerge as game changers. I support robust research and modest investments in demonstration scale deployment. I would not be surprised if big changes happen in the future.
I think the article raises serious issues that put doubt on the entire algae process, even assuming it could be economic on a micro level. How many square feet of water surface and water volume will be needed. Where will the water come from and who want’s to donate their reservoir to pond scum? We will obviously be driven (assuming we ever get there) to creating enormous systems of artificial lakes (the size of a medium size state) and getting the water from somewhere. Who knows where?
Until good answers may be had for problems like that, subsidizing companies to produce algae energy seems stupid. Reducing spending seems like a much better idea to me.