I’ve had some response to my post expressing some skepticism about the viability of oil from algae.

One reader suggested the cost of fuel from the process is in the range of $1.50 a gallon. Of course, if that were true, we’d likely see a lot of algae farms out there.

In fact, because of the thorny problem of separating the hydrocarbons from the algae, one source discussed in the Independent last October figures it costs upwards of $100 per gallon right now, and might be brought down to $40 a gallon:

Where algae is very nice is, it’s prolific. It’s everywhere… and you don’t have to do much. Mother Nature has kind of figured it out,” said Roy Swiger, a molecular geneticist and director of the Florida division of the non-profit Midwest Research Institute.

MRI began studying algae as an energy source three years ago. Swiger warned that algal fuels are not ready for prime time yet. Even though algae grows like gangbusters, it currently costs up to 100 dollars to make a gallon of algal fuel– hardly a savings.

The rub is bringing cost down, and production up. To do this, scientists must find cheap ways to dry algae and extract the lipids, where energy is stored.

Swiger noted that it would not make sense to spend five dollars of electricity to run a centrifuge to dry out algae, that in turn would only produce one dollar of fuel.

If research goes well, Swiger thinks it will take five years to bring down production costs to 40 dollars per gallon.