A statistic to note: At 1500 gallons per acre, 868,700,000 acres or roughly 1.4 million (warm, sunny) square miles covered in algae ponds would be required to replace current annual oil consumption…not to mention the enormous amounts of phosphorus, ammonia, etc. that would be required to feed the algae.

Biofuels produced from algae, rather than from crops, have entered the spotlight lately, and several companies now say that they are close to overcoming the technical hurdles to making algae-derived biofuels competitive on a commercial scale. However, experts caution that significant obstacles still need to be dealt with to make algae competitive with energy from fossil fuels.

For several years, entrepreneurs, investors, and even oil companies have been quietly looking to turn the photosynthetic powers of the once lowly and obscure but now coveted green slime, algae, into energy. Industry giants such as Dow Chemical Co., ExxonMobil Corp., BP p.l.c., and Chevron Corp. have recently made major investments in companies seeking to develop renewable fuels from algae, pushing this group of prolific organisms to center stage.

With thousands of strains of algae to choose from-each possessing varying ratios of oils, proteins, and starch in their cells-experts are exploring a wide range of possibilities for harnessing energy from these microbes. For example, the algae can be indigenous strains or genetically engineered organisms. And companies can choose from a diverse range of growing techniques, from inexpensive open ponds to carefully controlled enclosed tanks, to coax algae into secreting the desired product, which might be ethanol, biodiesel, or pump-ready gasoline.

Algae thrive in the presence of sunlight, CO2, and water. They multiply quickly and can be harvested year-round. Unlike conventional biofuel feedstocks such as corn, soy, palm, and canola, algae do not require vast and often valuable tracts of land and ample freshwater to grow, advocates say. Instead, algae can be grown on nonagricultural land in a fraction of the space and with brackish water or wastewater.

In addition, algae are potentially far more productive than other leading oil crops such as palm, canola, and soy. Some companies are reporting that they can produce up to 6000 gallons of fuel per acre per year (gal/ac/yr) from algae, even though they’re not yet operating on a large scale. In comparison, palm yields 650 gal/ac/yr; canola, 150 gal; and soy, 50 gal. And because algae consume CO2, algae companies plan to link up with power plants, cement factories, and other industrial plants to capture heat-trapping CO2 that would otherwise waft into the atmosphere. “There are a lot of opportunities to address multiple problems that might make algae all the more attractive,” says Martha Groom, a conservation biologist who is at the University of Washington Bothell and studies land and habitat issues associated with energy development.