Algae Fuel Gets Funding: USDA, Energy Dept. 'Invest' $62 Million

The Obama administration is quietly sinking millions into biofuel advancement while Republicans on the Hill are decrying strong-arm tactics being used to push the president's latest "all-of-the-above" alternative to oil.

On Monday, the Energy Department announced it is sinking $32 million in new biofuel investments into "earlier stage research that will continue to drive technological breakthroughs and additional cost reductions in the industry." The U.S. Department of Agriculture simultaneously announced $30 million in federal funding "to match private investments in commercial-scale advanced drop-in biofuels."

Obama's March 2011 Blueprint for a Secure Energy Future directed the USDA, Energy Department and Navy to collaborate on commercialization of "drop-in" biofuel substitutes for diesel and jet fuel. The funding comes from the Defense Production Act, under the stated goal of enhancing "national security by supporting the creation and commercial viability of a defense-critical domestic biofuels industry to advance alternatives to petroleum."

Participating agencies will be coming back to Congress to ask for more funding, the USDA  confirmed.

"This is an important time for the biofuels industry to step up and show the Department of the Navy how they have developed biofuels that are certified and certifiable for military use," said Agriculture Secretary Tom Vilsack. "The ability for U.S. industry to make, create and innovate has never been more important to our national and energy security. I know that through this DPA effort the nation will be able to harvest an aviation biofuels industry to satisfy the world's needs, not just our U.S. military."

Aside from that matching grant program, though, the Energy Department announced its "new investments" to "complement" the military end of the program, including $20 million "to support innovative pilot-scale and demonstration-scale biorefineries that could produce renewable biofuels that meet military specifications for jet fuel and shipboard diesel using a variety of non-food biomass feedstocks, waste-based materials and algae."

Energy also announced $12 million to support "up to eight projects focused on researching ways to develop biobased transportation fuels and products using synthetic biological processing."

"Advanced biofuels are an important part of President Obama's all-of-the-above strategy to reduce America's dependence on foreign oil and support American industries and American jobs," said Energy Secretary Steven Chu. "By pursuing new processes and technologies for producing next-generation biofuels, we are working to accelerate innovation in a critical and growing sector that will help to improve U.S. energy security and protect our air and water."

In a February energy speech at the University of Miami, Obama famously touted algae as the next frontier in biofuels.

"We're making new investments in the development of gasoline and diesel and jet fuel that's actually made from a plant-like substance -- algae," Obama said. "You've got a bunch of algae out here, right? If we can figure out how to make energy out of that, we'll be doing all right."

Republican presidential hopeful Newt Gingrich began mocking Obama as "President Algae" afterward.

"He says, now, drilling is not the solution and then he proposes a solution. Does anyone here remember what it was? Algae. The president's solution for the price of gasoline was algae," Gingrich said at an April campaign event in Delaware. "So, we went and checked out algae and it's true. We have research underway to eventually develop the equivalent of oil from algae and within 10 years we may actually have a commercially viable version. And the people who are working on it believe we could get it for somewhere between $140 a barrel and $800 a barrel. Now, the question is and this is sort of like Solyndra and the other -- you know, they've had five major solar power grants that have gone bankrupt, totaling billions of dollars."