I always love a healthy debate, so when my Foolish colleague Travis Hoium wrote that Solazyme (NAS: SZYM) was a "green-energy money pit," I couldn't resist taking the bait.

While I certainly agree with Travis -- there will be obstacles along the way -- I'm willing to dub Solazyme as my home run stock for 2012. Read below to find out why, and get access to another alternative energy play I'm excited about.

What they do
I've written about the specifics of Solazyme's business model before, but here's the view from 30,000 feet: The company can take a number of inputs (corn, switchgrass, sugarcane, waste streams), feed it to their patented microalgae, and those microalgae can produce different types of oils for different industries.

The company is specifically developing three different revenue streams moving forward. The first is to use the oil to produce biofuel. The company already has a partnership in place with Chevron (NYS: CVX) , and its fuel was successfully tested on a United Continental (NYS: UAL) flight earlier this year.

Solazyme also tailors its oils for healthy dietary products available at both Whole Foods (NAS: WFM) and GNC stores.

The company's last revenue stream is in producing industrial chemicals for larger companies. Solazyme already has partnerships in place with Dow Chemicals (NYS: DOW) and Unilever to help the company test its products in this market.

Here's what to focus on
As Travis rightly points out in his piece, securing feedstock (the sugarcane, corn, etc. that is fed to the microalgae) is the key to this company's future.  Drawing from our past experience with ethanol, Travis states: "Moving to a large scale means sourcing more fuel and building larger plants. When it became time for corn ethanol to make that jump the increased demand for corn resulted in higher prices and any advantage ethanol had evaporated."

It is here that I believe Solazyme has an upper hand over both those who tried and failed to use ethanol, and rival Amyris (NAS: AMRS) . Amyris produces biofuels using plant-sourced sugars as feedstock. Solazyme, much like Rentech (ASE: RTK) , has multiple inputs for its feedstock -- not just plant-sourced sugars -- including several forms of biomass, and even waste streams.

This means that whereas ethanol failed when its popularity raised the price of corn to a point where it was no longer cost effective, Solazyme and Rentech can spread their feedstock across many sources, including human waste streams, which I'm sure we'd be OK with using up altogether.

As things stand now, it seems that Rentech is more focused on their fertilizer business, and Solazyme already has feedstock agreements in place to meet 90% of expected capacity through 2015.

As I reported in August: A joint venture with French Roquette Freres has ensured that feedstock will be provided for Solazyme's food brands. A similar venture with Bunge Limited in Brazil promises to provide Solazyme with access to the sugarcane in a new 100,000 metric-ton facility.

And adding to the string of good news that's been coming from the company lately, the Navy just announced it'll be buying $12 million of advanced biofuels in an agreement that includes Solazyme.

These trends, both in terms of gaining customers and securing feedstocks, clearly put Solazyme in the driver's seat among biofuel producers.

Tread carefully
As any baseball fan knows, your favorite home run hitter is usually the one who leads the team in strikeouts as well. The same goes for the stock market. The companies with the greatest potential are often the riskiest.

Travis is right to point out that if Solazyme (or its competitors) don't secure sustainable feedstock streams as they ramp up their production and scale, they will join the long list of has-been green energy stocks. If, however, they continue to innovate and find ways to take the things we truly consider garbage (landfills, anyone?) and turn it into oil, then the sky could be the limit. That's why I've initiated a green-thumb on my CAPS profile for the company.

I currently hold about 1.4% of my portfolio in Solazyme, so I'm not placing heavy bets here. I will, however, be following the company's progress closely. Add Solazyme to your Watchlist, and you'll be able to do the same.

Finally, if you'd like to find out about another alternative energy play that I've actually put more of my money into than Solazyme, I suggest you check out our special free report: "One Stock to Own Before the Nat Gas Act Becomes Law."

Inside you'll find out about a company that can benefit from the natural-gas movement without having to actually extract the stuff from the earth. I've already put twice as much of my money into this company as I have into Solazyme. Get your report today to find out which company this is; it's absolutely free!

At the time this article was published Fool contributor Brian Stoffel owns shares of Whole Foods Market and Solazyme. You can follow him on Twitter at @TMFStoffel. The Motley Fool owns shares of Solazyme, Whole Foods Market, and Amyris. Motley Fool newsletter services have recommended buying shares of Chevron and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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