A report from the Energy Biosciences Institute in Berkeley projects that, while algal oil production technology has the potential to produce several billion gallons of renewable fuel annually, development of cost-competitive algae biofuel production will require much more long- term research, development and demonstration. In the meantime, several non-fuel applications of algae could serve to advance the nascent industry.

The replort says that the industry is still in its early gestation stage. Although well over 100 companies are now working to produce algal biomass and oil for transportation fuels, most are small and none has yet operated a pilot plant with multiple acres of algae production systems.

Several companies have recently initiated such scale-up projects, including several major oil companies including ExxonMobil, Shell and the Italian oil company, Eni.The U.S. Department of Defense is supporting several fast-track projects and the U.S. Department of Energy has funded several projects including one 300-acre demonstration project in New Mexico. The Carbon Trust in the UK has engaged a dozen universities and research laboratories on a 10-year effort to develop algae oil production and the European Union recently funded three 25-acre pilot projects.

However, large-scale algal biofuel production still needs the development of:

  • The ability to cultivate stable cultures under outdoor conditions, while achieving both high productivities and oil content,.
  • Increased volume of algae oil produced per unit of surface area per year.
  • Oil-rich algae strains that are biologically competitive with contaminating wild species and that consistently grow well in various climates

The report concludes that “algal oil production will be neither quick nor plentiful – 10 years is a reasonable projection for the research, development and demonstration to allow a conclusion about the ability to achieve, at least for specific locations, relatively low-cost algal biomass and oil production.”