I’ve been very skeptical about the viability of getting fuel from algae. Now it seems Exxon

is cutting its losses on algae biofuels after investing over $100 million only to find that it couldn’t achieve commercial viability.

They were planning to invest a lot more (as reported by the NYTimes in 2009, up to $600 million). Among other issues, there’s the nettlesome problem of what to do with the organic algae waste after extracting the fuel compounds.

The military is still getting in on the act, however. And back in 2010, Darpa was saying its fuel from algae program

could be cost competitive with fossil fuels within months.

Somehow it didn’t pan out. It would be interesting to learn how much tax-payer money has been spent on large algae projects.

The key, as always, is to save money on unproven ideas like this by proving them in step-wise fashion: first show it can work in the lab, then do a small demonstration. Too often, large amounts of funds are lost by attempting to go large-scale early on.