The Aquatic Species Program was launched in 1978 by president Jimmy Carter to explore the potential of algae as an energy source. About $25 million was put into the program until it was shelved by the Clinton administration in 1996.  They never found the 'lipid trigger' -- the trick to making the organisms produce lipids capable of being turned into biofuels in a high-volume low cost manner.  

Since then, scores of firms, startups, and Fortune 500 companies alike have worked on algae-based biofuels.  Hundreds of millions of dollars have been invested. So far, maybe a few thousand gallons of very expensive algae oil have been produced. The algae oil hype machine has slowed a bit, even as the concept of algal biofuels has slimed its way into the public consciousness.  Still, at the moment, the only people making money in the algae biofuels business are artists doing graphic renderings of what algae plants might someday look like.

The question remains: can algae be economically cultivated and commercially scaled to make a material contribution to the world's liquid fuel needs?  The jury is still out.  GTM Research has authored a report on algae and next generation biofuels -- learn more here.  

Why Algae?

On paper, algae is perhaps the perfect feedstock for biofuels. It grows in a wide variety of climates. It looks to have lower water intensity than corn or cellulosic ethanols.  It might be able to mitigate carbon dioxide. The liquid fuels produced by these single-celled creatures are only one of their byproducts, and potentially not even the most valuable. Cosmetic supplements, nutraceuticals, pet food additives, animal feed, and specialty oils for human consumption could win higher per-gallon prices.

The allure of algae is that some species contain up to 40 percent lipids by weight.  And therefore, according to some sources, an acre of algae could yield 5,000 to 10,000 gallons of oil a year, making algae far more productive than soy (50 gallons per acre), rapeseed (110 to 145 gallons), mustard (140 gallons), jatropha (175 gallons), palm (650 gallons), or cellulosic ethanol from poplars (2,700 gallons).