U.S. Sen. Bill Nelson remembers when he was a kid and diving into ponds covered in algae was considered fun.
Today, growing algae to turn into biofuel is serious business, and Nelson wants to give the fledgling industry a tax break.
Nelson, D-Fla., toured the headquarters and research labs of Algenol Biofuels off Alico Road in south Lee County on Monday morning to showcase his plan.
Algenol, which has a patent on technology to turn algae into ethanol, represents a promising step toward reducing U.S. foreign dependence on oil and creating new jobs in a weak economy, Nelson said.
With its plentiful sunshine and heat, Florida is perfect for growing algae and stands to be a leader in an algae-based fuel frontier.
“I want you to succeed and I want you to succeed big time,” Nelson told Algenol executives gathered around a conference room table.
The $1-per-gallon tax credit and a related proposal to allow algae biofuel companies to speed up their tax write offs for biofuel plant property would cost an estimated $500,000 before it expires in 2013, according to congressional estimates.
Algenol executives said the value of Nelson’s bill goes beyond the relatively meager tax break dollars.
“It’s the signal it sends to Wall Street,” Algenol CEO Paul Woods said.
Nelson’s bill gives algae-based fuel producers the same tax advantages already enjoyed by companies that produce biofuels using corn or wood, so-called cellulosic biofuel.
That puts the two types of biofuel on a level playing field that matters when it comes to attracting financing for projects to take algae-based biofuels from the laboratory to market, Woods said.
“Your bill isn’t a little bit important,” Woods said. “It’s massively important.”
A similar bill passed the U.S. House in September, but Sen. Tom Coburn, R-Okla., has put a hold on the Senate bill.
If he can’t convince Coburn to lift the hold, Nelson said he will use his position on the Senate Finance Committee to try to insert the algae biofuels provision into an overarching tax bill expected to come up by the end of the year.
Woods said Algenol doesn’t want “subsidies forever,” just long enough to put the industry on the path to commercial viability.
By 2025, Algenol wants to produce more than 20 billion gallons of ethanol a year at various locations.
The company’s plans include building a pilot production plant on 40 acres next to its offices and laboratories off Alico Road.
Algenol got a $10 million grant from Lee County to build the 40,000-square-foot headquarters, which it unveiled last week.
Last year, Algenol received a $25 million grant from the U.S. Department of Energy to build a pilot plant in Texas.
The company has about 100 employees, 65 of which are in south Lee County.