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 ...
Tax loss. Good stuff to lose money on.
Good thing it was only other people’s money that they lost.
Gee... they could have invested that $100 million in drilling for oil and made a killing.
Exxon can throw 100m around like it’s pennies. A billion to them it about a dollar to you. Yet, they’ll still rat out all they can for IT. Kinda amazing how they operate. Nickel and dime here and there.
Doesn’t the FedGov kick in money on this? They may not have lost nearly as much.
If that surprises anyone here, they need to turn in their Freeper posting privileges.
You can’t imagine how tiny Exxon considers 100m. 100b? Maybe they might care. But even then that’s tiny.
It was not going to work without a copious water supply. Those H’s have to come from somewhere when making hydrocarbons. An efficient algae that would grow in sea water would have been a major coup here. I don’t think it ever happened.
I could have told them algae wasn’t going to work, and saved them the 100 million.
True, fracking and deep water will supply more than we can use in the next 1000 years probably.
But, you have a lot of high paid people that’ll need to move onto other areas once this algae goofiness fails.
They move people around all the time at the higher levels. That’s just how the slimey oil industry works.
100M is chump change that benefits them and liberals politically
Carbon credits never took flight and that made pond scum just pond scum.
If they had hired me, I could have helped them lose only $90 million.
Wasn’t the US Navy involved in this algae based BS also?
But their deal wasn't with Exxon -- it was with an Obama donor in the bio-fuel business.
Silly Roccus. I should have known better.
So you buy into the, “Big Oil Obscene Profits”, chant of the liberals? Have you ever looked at the Net Margin on oil versus McDonalds, Apple, etc? Big numbers do not equal big profits.
You pay the price at the pump. I’m just saying that’s how it is. We’re all screwed.
The oil companies are a very small part of the price at the pump. Government induced supply limits, taxes, and regulations are the biggest part of the problem. I hate the price too but I don’t blame the producers.
They are a part, but in the 90’s we were at this level of oil price and 80 cents a gallon.
And that was with Clinton.
There’s just no justification for the gas prices now, it’s all gouging.
It’s a shame your car doesn’t run on crude oil. I knew the gouging angle was coming. No reason to continue this debate since you believe oil companies should deliver the product for free. If you buy a cup of coffee today, that is where you’re being gouged by the producer. Oil drives the economy and the biggest taker is GOVERMENT.
I worked in downstream at exxon, nuff said. I know how they feel about that entire system. The government taxes aren’t even the tiniest bit of how the think.
I am a product manager for a large commercial telecom/data equipment provider. Example: I can buy a widget for $100.00 from a manufacturer but due to loaded costs I have to sell it for $350.00 to make a 10% gross, not net, profit. That 10% gross is dependent on a high volume of widgets sold. The telecom technician “downstream” with great wages and benefits package thinks exactly like you do. I am sure glad the downstreamers don’t run the show. Nuff said.
Indeed, and that’s why gas is 3.50-4 vs 1.50-2 as it should be.
In your world the gasoline pump sits on the crude oil well head that magically appeared there and produces 3 grades of product. No drilling, no refining, no transportation, no taxes or regulations, no shareholders. You really learned a lot working downstream.
Have a great day I have to go get dressed for work making obscene profits and sticking it to the little guy.
You have no clue about how things work or what I said, have fun.
It’s not the accountant, but the engineers who said it would work. Regardless, they took a risk that didn’t pan out, big deal. I like it, it shows that business are willing to take a risk only to “see if something works”. I remember the R&D tax credit - it encouraged companies to spend money to make money. Good capitalist ideas that were taken way when then libtards took over.
I guess I need to work downstream. You’ve said nothing but gas is high because Exxon is evil. I understand what you said but it has no bearing on the subject. Capitalism sux in your world.
Last 3 years XOM spent an average of $32 billion in CapEx and averaged $28 billion in Free Cash Flow. This $100 million is not even a rounding error.
Your memory needs a little update. Oil was about $30 a barrel all through the Clinton years. Here’s a chart:
Disappointing. I love diesel motors, was hoping this algae stuff would work. Much smarter than turning our food into biofuel. I’ve owned a good bit of XOM stock for years. Pays dividends and rises predictably with the price of oil.
Monty said $.80/gal which is close to $30/ barrel. What he doesn’t understand is that is the price at the source not the price at the pump. He has worked down stream though. I got to run and get financial advice from my financial advisor’s barber. Later.
BS. At that time, the price of oil never reached half of today's price.
While gasoline prices were not that low.
The oil prices of the 90’s wasn’t anywhere near where it is today.
The last half of the 90’s the OFF Program and the smuggling of Iraqi oil drove the price so low it caused a worldwide recession.
I had an oil lease, I was selling oil at the time and there was times I only got $12-$15 per barrel and that was because I waited for the price to go up to sell.
Hip waders aren’t high enough for your BS.
I had a lease and was selling oil the last half of the 90’s.
The only reason the price of oil was as high as it was (now there’s a joke for you) the gatherers weren’t buying oil unless it met a very specific set of requirements.
In 1999 a lot of independent operators couldn’t sell their oil at any price.
Others were selling as low as $7.
Except it wasn't an investment, it was either a bribe or protection money.
Partnered with "California-based SGI"?
I bet you anything that if you looked into SGI, you would find a money-laundering operation for OFA, or the Tides Foundation, or some similar Marxist organization.
At $100 million, Exxon probably got off cheap.
Even less than that in some places. Hard to believe how some kept in business.
Look at Average price Dec 1998 - Jan 1999:
Alaska North Slope First Purchase Price
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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