"Algae produces a significant amount of oil and biomass in a short time." My understanding is that most algae produces a significant amount (per cell) when it is stressed; but by definition under those conditions it is not going to produce a lot of biomass.

"[C]ellulosic ethanol which likely will be produced commercially in the next three to five years." Really, in three to five years? What is your definition of "produced commercially", Todd? Produced in volumes to satisfy a mandated amount, while benefitting from a $1.01/gallon producer tax credit? Or able to compete -- without those props -- with other fuels (even assuming a significant carbon price, such as $100 per metric ton of CO2-equivalent on petroleum fuels)?

Ronald - are you publicly stating then that the petroleum fuels industry receives no "props" of any kind from the government?

Commercial-Scale plants (5 mmgy and up) will be online in 3-5 years. I think Todd made a pretty accurate statement. Are they going to be cheap? Of course not. And given the favorable post-ILUC emissions ratings that cellulosic has gotten so far, is it really unable to compete (minus supply subsidies) supposing a carbon price of $100/ton CO2e?

"[A]re you publicly stating then that the petroleum fuels industry receives no 'props of any kind from the government?" No, Energy User. But we have been through this before. Petroleum products are sold at world-market prices. The budgetary subsidies and tax breaks are mainly on the upstream (exploration and production) side, making domestic production more profitable than it would be otherwise -- not reducing the price at the pump. I am not defending those subsidies. But eliminating them (which Friends of the Earth estimate come to around $0.08 per gallon), though it would help the federal budget, would not make much of a difference to gasoline or other product prices. Some people claim that more than $40 billion dollars a year in security services is provided by the U.S. military for oil shipments. For the sake of argument, assume that such subsidies plus the other ones are as high as $100 billion a year (the extreme end of the range of estimates), and that eliminating them would translate into an equivalent cost being borne by oil companies. That would come to $0.33 per gallon. A carbon tax of $100/tCO2-eq (three times as high as the highest traded value of carbon allowances traded on the European Carbon Exchange to date, and eight times the IPCC's estimate of the current social cost of carbon) would add $0.92 to a gallon of gasoline. Add those two together and you get $1.25 per gallon on top of whatever is the current gasoline price. (Of course, with that kind of increase in end-user prices, demand would fall, and so probably would the world price for petroleum.) That is still less than the producer tax credit alone, which works out to $1.50 (= $1.01/0.67) per gallon of gasoline equivalent for cellulosic ethanol. To that can be added extra subsidies provided by several states. "Commercial"? Not by my definition. "Pre-commercial"? If you insist.