According to a Reuters report, in 2009 the Pentagon paid Solazyme $8.5 million for 20,055 gallons of algae-based biofuel, which works out to $424 a gallon. Last year the order was 450,000 gallons, the biggest-ever biofuel order from government, at a cost of $12 million, which works out to more than $26 a gallon. Blended with conventional fuels, the cost is supposed to be $15 a gallon but under no scenario is the cost of biofuels less than twice as much as conventional fuel. Even so, the plan is 50 percent biofuels for the Navy by 2016. But some analysts see a problem on the practical side.

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