Opinion
Seaweed And Biofuel’s Aquatic Future
The long-term impact of yesterday startling announcement by Standard & Poor’s that it was downgrading United States Government bonds to one notch below AAA, a rating that the US had maintained since 1917, has yet to be seen on Wall Street.
But there is little doubt that it will spook the investor community, all of whom are looking for the next Big Thing to park their cash and hopefully make piles more money.
One of the few financial markets certain to prosper over the next decade is that of renewable biofuels. The ASTM as certified them for civilian aircraft used, and the Pentagon is busy scrambling to fulfil federal mandates are upping their use of biofuel: the Air Force is to get 50 per cent of its fuel needs from biofuel in 2015, and the Navy at decade later.
But, where to go for the most reliable feedstock? In Pentagon test, three leading contenders have emerged – camelina, jatropha and algae. While all three have their merits, “micro” algae still seems like the longest shot, remaining largely within the realm of the Pentagon’s Defence Advanced Research Projects Agency laboratories, and most analysts believe that it will be some time before we see pond scum fuelling the Pentagon’s aircraft and warships.
Now however, disillusioned scientific researchers in India, having spent more than two years investigating microalgae, have directed their research elsewhere, resulting in a start-up company that may eventually resemble nothing so much as the early days of Xerox and Apple Computers.
Sea6 Energy, an Indian start-up company based in Chennai, (formerly Madras), the capital of the Indian state of Tamil Nadu, located on the Coromandel Coast of the Bay of Bengal, have begun experimenting with macro algae, more commonly known as seaweed.
Sea6 Energy’s founders, four postgraduate students and their professor at the Indian Institute of Technology Madras, eventually concluded that algae’s possibilities as a biofuel feedstock lay many years in the future, noting that the micro-organism needs significant amounts of fresh water, large amounts of nutrients and significant areas of land for establishing growing ponds. Sea6 Energy chairman Shrikumar Suryanarayan noted simply, “We were preparing to abandon the project when we realized that we were chasing the wrong idea.”
Suryanarayan and his team noted that seaweed has a number of advantages over its microscopic cousin, particularly since it grows in shallow ocean waters and doesn’t need land, water or nutrients, as the ocean provides them.
Sea6 Energy was formed in July 2010 when Shrikumar and a few IIT Madras alumni contributed about $20,000 in start-up funds.
Sea6 Energy’s location has a number of advantages, including the fact that technology for its cultivating seaweed is already well established, as it is being grown along the Tamil Nadu coast as a raw material for some cosmetics. Multination Pepsi had also hired people in coastal Tamil Nadu to cultivate seaweed for its food products.
The new start up faced a number of technical problems. Tamil Nadu farmers cultivate seaweed on floating bamboo rafts in calm waters. In order to ramp up the scale to industrial production, Sea6 realised that bamboo rafts break because they were rigid structures, developing instead an offshore farming system, based on a marine plastics polymer, within six months of the company’s incorporation, for which it has filed a provisional patent application.
Sea6 energy’s structures would allow seaweed to be cultivated in rougher waters, where it could not be done earlier, potentially opening up vast stretches of coastline for farming and providing increased employment opportunities to rural communities.
Sea6 Energy is now tackling the problem of finding a biological method to break down the plant into sugars and then converting the sugars into alcohol. Seaweed biomass is rich in carbohydrates, which can be converted into sugars. Unlike plants, seaweed contains no lignin and is easier to break down. Sea6 needs a microorganism that works in seawater and its research has discovered a few.
Converting the sugars into alcohol or other fuels is the easiest task. “Once you have sugars,” says KB Ramachandran, professor of biotechnology at IIT Madras, who is involved with the company, “we can make any petrochemical product.”
Macro algae produce oil directly and when compared to plants, the economics and technology are loaded heavily in favour of seaweed; while sugarcane produces 30 tons in a hectare, a similar area can produce 100 tons of seaweed.
Sea6 Energy estimates would need $1.1-$1.34 million over the next four years to develop a farm of one square kilometre with a demonstration plant that produces ethanol and other petrochemical products.
Sea6 Energy noted that, “Seaweeds, technically known as macro-algae, offer an unmatched potential for scalability by growing directly on the ocean surface and extracting nutrients from flowing water.”
So, gentle readers, do the potential “scalability” of potentially investing in such a project. India has approximately 4,000 miles of coastline, bounded as it is on three sides by seas, and 0.13 million square kilometres of territorial waters. That is as lot of aquatic biomass.
Remember, you read it here first.
Dr. Daly wrote this piece from London for Washington, DC-based OilPrice.com.
John Daly
From all indications, Nigeria possesses enough human and material resources to become a true economic powerhouse in Africa. According to the National Population Commission (NPC, 2023), the country’s population has grown steadily within the last decade, presently standing at about 220 million people—mostly young, vibrant, and innovative. Nigeria also remains the sixth-largest oil producer in the world, with enormous reserves of gas, fertile agricultural land, and human capital.
Yet, despite this enormous potential, the country continues to grapple with underdevelopment, poverty, unemployment, and insecurity. Recent data from the National Bureau of Statistics (NBS, 2023) show that about 129 million Nigerians currently live below the poverty line. Most families can no longer afford basic necessities, even as the government continues to project a rosy economic picture.
The Subsidy Question
The removal of fuel subsidy in 2023 by President Bola Ahmed Tinubu has been one of the most controversial policy decisions in Nigeria’s recent history. According to the president, subsidy removal was designed to reduce fiscal burden, unify the foreign exchange rate, attract investment, curb inflation, and discourage excessive government borrowing.
While these objectives are theoretically sound, the reality for ordinary Nigerians has been severe hardship. Fuel prices more than tripled, transportation costs surged, and food inflation—already high—rose above 30% (NBS, 2023). The World Bank (2023) estimates that an additional 7.1 million Nigerians were pushed into poverty after subsidy removal.
A Critical Economic View
As an economist, I argue that the problem was not subsidy removal itself—which was inevitable—but the timing, sequencing, and structural gaps in Nigeria’s implementation.
- Structural Miscalculation
Nigeria’s four state-owned refineries remain nonfunctional. By removing subsidies without local refining capacity, the government exposed the economy to import-price pass-through effects—where global oil price shocks translate directly into domestic inflation. This was not just a timing issue but a fundamental policy miscalculation.
- Neglect of Social Safety Nets
Countries like Indonesia (2005) and Ghana (2005) removed subsidies successfully only after introducing cash transfers, transport vouchers, and food subsidies for the poor (World Bank, 2005). Nigeria, however, implemented removal abruptly, shifting the fiscal burden directly onto households without protection.
- Failure to Secure Food and Energy Alternatives
Fuel subsidy removal amplified existing weaknesses in agriculture and energy. Instead of sequencing reforms, government left Nigerians without refinery capacity, renewable energy alternatives, or mechanized agricultural productivity—all of which could have cushioned the shock.
Political and Public Concerns
Prominent leaders have echoed these concerns. Mr. Peter Obi, the Labour Party’s 2023 presidential candidate, described the subsidy removal as “good but wrongly timed.” Atiku Abubakar of the People’s Democratic Party also faulted the government’s hasty approach. Human rights activists like Obodoekwe Stive stressed that refineries should have been made functional first, to reduce the suffering of citizens.
This is not just political rhetoric—it reflects a widespread economic reality. When inflation climbs above 30%, when purchasing power collapses, and when households cannot meet basic needs, the promise of reform becomes overshadowed by social pain.
Broader Implications
The consequences of this policy are multidimensional:
- Inflationary Pressures – Food inflation above 30% has made nutrition unaffordable for many households.
- Rising Poverty – 7.1 million Nigerians have been newly pushed into poverty (World Bank, 2023).
- Middle-Class Erosion – Rising transport, rent, and healthcare costs are squeezing household incomes.
- Debt Concerns – Despite promises, government borrowing has continued, raising sustainability questions.
- Public Distrust – When government promises savings but citizens feel only pain, trust in leadership erodes.
In effect, subsidy removal without structural readiness has widened inequality and eroded social stability.
Missed Opportunities
Nigeria’s leaders had the chance to approach subsidy removal differently:
- Refinery Rehabilitation – Ensuring local refining to reduce exposure to global oil price shocks.
- Renewable Energy Investment – Diversifying energy through solar, hydro, and wind to reduce reliance on imported petroleum.
- Agricultural Productivity – Mechanization, irrigation, and smallholder financing could have boosted food supply and stabilized prices.
- Social Safety Nets – Conditional cash transfers, food vouchers, and transport subsidies could have protected the most vulnerable.
Instead, reform came abruptly, leaving citizens to absorb all the pain while waiting for theoretical long-term benefits.
Conclusion: Reform With a Human Face
Fuel subsidy removal was inevitable, but Nigeria’s approach has worsened hardship for millions. True reform must go beyond fiscal savings to protect citizens.
Economic policy is not judged only by its efficiency but by its humanity. A well-sequenced reform could have balanced fiscal responsibility with equity, ensuring that ordinary Nigerians were not crushed under the weight of sudden change.
Nigeria has the resources, population, and resilience to lead Africa’s economy. But leadership requires foresight. It requires policies that are inclusive, humane, and strategically sequenced.
Reform without equity is displacement of poverty, not development. If Nigeria truly seeks progress, its policies must wear a human face.
References
- National Bureau of Statistics (NBS). (2023). Poverty and Inequality Report. Abuja.
- National Population Commission (NPC). (2023). Population Estimates. Abuja.
- World Bank. (2023). Nigeria Development Update. Washington, DC.
- World Bank. (2005). Fuel Subsidy Reforms: Lessons from Indonesia and Ghana. Washington, DC.
- OPEC. (2023). Annual Statistical Bulletin. Vienna.
By: Amarachi Amaugo