Skip to comments.Exxon’s $100m Algae Investment Falls Flat
Posted on 05/30/2013 11:20:15 PM PDT by Vince Ferrer
Exxon Mobil Corp. (NYSE: XOM) is cutting its losses on algae biofuels after investing over $100 million only to find that it couldnt achieve commercial viability.
Earlier this week, Exxon announced that while it wasnt throwing in the towel, it would be forced to restructure its algae research with partner California-based Synthetic Genomics Inc (SGI).
(Excerpt) Read more at oilprice.com ...
That seems to be common sense, yet there is an algae "farm" or whatever they call it, doing research not far from me...in the desert, where temperatures any day now will be over a hundred for the rest of the summer. Where water is from deep wells with rapid evaporation on the surface. Hubby and I have zero knowledge of the research or much knowledge of algae other than cleaning it out of livestock drinkers but it just seems odd that there would be an algae farm in the desert.
Here in SE Texas a lot of independent operators on the domes run the cold gun-barrel separators.
The truck would show up to pick up a load, drop the thief and check the oil, oil wouldn’t meet specs, and the truck drove off without a load.
If the operator wanted to sell his oil he would first have to run it through a hot separator.
There were operators that offered the gathers their oil for $5, but they wouldn’t take it for that price without running it through a hot separator first.
A lot of people didn’t make it, myself included, there just wasn’t any money coming in to improve the production and it was costing more to produce from stripper wells than you were getting out of it.
On the west coast, the prices were further driven low by a ban on the exports. When it was finally lifted, less than 5% of the Alaskan oil was exported for a few years before it stopped.
The ability to export actually helps stabilize the market including investments for future production. I wish those fighting the LNG exports could understand that.
I’ll bet they did the algae experiment for PR, knowing it wouldn’t work.
Honestly, I don’t know why they would even try; because of their success, Exxon will always be THE top target of capitalism-haters, no matter how much good they do.
The recession Bush inherited from Clinton was an orchestrated recession created by driving the price of oil so low the oil companies stopped spending, the oil producing countries were running out of money, royalty checks to property owners dried up, it was a complete domino effect. It wasn’t just this county, it was a worldwide recession.
Consumers in this country without a rat’s ass of sense thought low prices were great, not having the slightest clue how much the oil industry contributed to the worldwide economy.
You could insert the word “quietly” into any sentence in the article. We won’t see this information in any MSM story.
Nice of you to use charts where the vertical axis is an order of magnitude greater on one to try to prove a point.
$12-15 are about what it’s worth. Everything else is slush.
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Did you want me to compress one down so it was hard to read the scale? Oil is priced in barrels and gasoline is priced in gallons.
How would changing the scales not show oil at less than half the price you claimed or gasoline consistently above the price you claimed?
You try producing oil for that price today. The easy-to-get oil is running out. The cost of the deep shale wells with multi-stage fracking and mile or two long laterals are not cheap.
If the cost to produce was like you suggest, the profit margins from the oil companies would be more than a magnitude higher.
So prices went up that much in 15 years due to costs of production? Right.. And they’ve fluctuated as your graph shows from just that as well?
imho the big winner in the algae oil space is not an algae company but rather a bacteria company called Joulle Unlimited. They have engineered bacteria to make ethanol, diesal and jet fuel or whatever exactly to spec so there is no refining. They can bring the fuel in for 1.28@ gallon. They’re currently scaling up to a 1000 acre facility in new mexico.
I know you have a personal high level stake in this stuff, but c’mon. You know they’re laughing it up to the bank. I’m not saying oil companies are ‘evil’, but they did fake out their problems in the 90’s in order to mega merge to kill competition in the market which is why prices are so high.
Oil prices have always jumped around. I've been in this industry a couple decades. Boom and bust is normal. Long term companies have to invest for the future or they won't be around. For every barrel of oil that is taken out of the ground, they have to find a new one. That can either be new exploration or they can spend money to get more from the fields they already have, like CO2 flood, water injection, etc.
In the bust times, the cut way back on that investment and hope they can ride out the down time. Most shutdown projects they planned and people like me get let go. If they didn't plan well, they usually get bought out by some company that planned far better. Nothing new in the oil business. Is this really news to you?
Obviously you don’t have the slightest clue what it cost to get a barrel of oil out of the ground and to market.
Stick to something you know something about, oil isn’t it.
They are public traded companies. Buy some stock if you believe that they are magic money machines. You too can be big oil.
Snicker snicker : )