HONG KONG, China (CNN) -- Thirty years ago, the last time the world faced an oil crisis, the U.S. Department of Energy (DoE) launched a program to analyze the potential algae had as a renewable fuel. It didn't take it long to realize algae was a godsend.
Algae might be a problem when it chokes lakes, but could have a part to play as a biofuel.
Actually being able to take advantage of it was another matter.
The program, run by the DoE's National Renewable Energy Laboratory (NREL) lasted nearly two decades, but by 1996, it came to a close. Getting an algae biodiesel program running was deemed economically unfeasible when faced with the technology costs at the time versus the costs of using other fuels.
At that time, the price of oil was less than $20 a barrel.
With oil prices now looking like they won't drop below $100 a barrel for some time -- if ever -- and technology costs relatively lower than a decade ago, algae's time in the sun could finally have arrived.
The greenest of the green?
Algae have been touted as the greenest of all green fuels and it's not hard to see why. They are oil-rich themselves, with some strands carrying more than 50 percent oil content.
They can grow in the most hostile of regions such as deserts so don't infringe on land set aside for food crops. They don't require freshwater to flourish, and can thrive off saltwater or wastewater, making sewage farms a natural habitat.
Algae also reproduce at an astonishing rate; they are able to double in size in a matter of hours. They are amongst the fastest growing plants on Earth.
What make algae particularly useful as a feedstock is that they thrive off carbon dioxide (C02), which makes them great carbon sequesters. That also means that the other natural places to cultivate algae are power stations.
The algae can absorb as much as 75 percent of the exhaust gas, claims U.S. firm GreenFuel Technologies, using its bespoke bio-reactor. Algae doesn't just grow in the sun, contrary to previous belief. San Francisco start-up company Solazyme says it can now generate biofuels from algae grown in the dark.
The sun is replaced by sugar, essentially, which is fed to the algae, which then produces different types of oil that can be processed into a variety of fuels, suitable for cars and planes. These algae produce more oil than they would in the sun, the company claims.
Compared to other types of feedstock, algae is incredibly productive.
Most agree it can eclipse any other type of fuel crop grown today -- palm oil can yield around 6,000 liters per hectare per year (per/h/y) of fuel, for example while algae can yield more than four times that amount.
Production: A murky issue
But there is some level of disagreement over just how productive algae is or can ever be. Current yield estimates are 25,000 liters per/h/y, while conservative future yield predictions are around 50,000 liters per/h/y. The more ambitious claims of productivity have been as high as a quarter of a million per h/y.
But micro-algae expert John Benemann PhD, who was part of the NREL algae task force, says this is little more than hype, arguing in a recent presentation that the figure of quarter of a million "exceeds theoretical limit of photosynthesis".
NREL itself said in its 1996 report that an area around the size of the U.S. state of Maryland -- approximately 15,000 square miles (3.8 million hectares) -- would be enough to cultivate enough algae to serve the entire transportation needs of the U.S.
That would represent around 140 billion gallons (530 billion liters) of biodiesel it said, working out at around 140,000 liters per h/y. Achieving production levels of such a scale in theory is one thing however; being able to do it in reality is another.
In 1996, the DoE estimated that it would cost twice as much to produce algae-sourced biodiesel than it would gasoline.
Today, the University of New Hampshire's (UNH) Biodiesel Group estimates it could cost as much as $308 billion to build enough farms across the U.S. to meet these production levels and another $47 billion to run them.
The U.S. currently spends up to $150 billion a year on importing oil, UNH says.
UNH says the technology isn't yet available to produce the yields algae are capable of producing anyway, and is seeking private financing in the absence of government funding to develop the technology further.
Just skimming the surface
There is also some dispute over the methods employed to farm algae. Some believe closed methods of production such as bio-reactors are the only way to control conditions sufficiently to guarantee good quality feedstocks.
But proponents of open algae farms say their way is more productive - they have more space available to them - and they are cheaper to run. New Zealand company Aquaflow Bionomic Corporation claims you can achieve productivity levels at an affordable rate. In early 2006 it said it had successfully produced biodiesel crude from wild algae (it is keeping the process secret).
This biodiesel generates "at least as much energy as went into creating it," Aquaflow told The Guardian, claiming it is so cheap to produce that the company is planning on teaching local communities how to make it themselves so they can be self-sufficient. E-mail to a friend
(Sources: Technology Review; "Microalgae Biofuels" by John R. Benemann, New Zealand Energy Efficiency and Conservation Authority; CNN.com; Energy Bulletin; The Washington Post; University of New Hampshire Biodiesel Group; Clean Tech; Treehugger; The Economist; National Renewable Energy Laboratory)