Several companies in Germany and in The Netherlands have been working toward creating biofuel out of algae.  Though the technology has been moving forward full steam ahead, the practice has been financially untenable.  However, as long as oil stays above $100 per barrel, the production of fuel from algae becomes financially competitive.  Some producers believe they can get to commercial production within 5 years while other scientists are not quite that optimistic.

(Photo Credit: The AP)

The AP via The Huffington Post has more details about the benefits and challenges:

"This is the ultimate fast-growing organism," says Peter van den Dorpel, chief operating officer of AlgaeLink, which makes bioreactors for speeding reproduction. "Algae is lazy. It eats carbon dioxide and produces oxygen." It has no roots, no leaves, no shoots. "It grows so fast because it has nothing else to do. It just swims in the water."

 

Farming algae doesn't require much space or good cropland, so it avoids the fuel-for-food dilemma that has plagued first and second generation biofuels like corn, rapeseed and palm oil.

 

It can grow in fresh water, polluted water, sea water or farm runoff. It can purify a city's sewage while feeding on the nitrogen and phosphates in human waste.

 

One other really cool benefit of fuel production from algae is that all of the carbon produced in it's manufacturing process can be fed back to the algae as it's food.