A new report from the Energy Biosciences Institute (EBI) in California claims that algae-based biofuels could make a "vital if modest" contribution to the US biofuels sector.
The report, from the Berkeley-based Institute claims that resources pose the greatest challenge to algae biofuel production, with CO2 being the most difficult ingredient to access.
Entitled "A realistic Technology and Engineering Assessment of Algae and Biofuel Production", the report is based on the current or imminent use of technologies for five different types of algae production, all of which use water and nutrients from municipal waste water and CO2 from flue gas from a natural gas-fired power plant.
Costs of product are estimated at about $21m for a 250-acre production system for oil-base products, capable of around 12,300 barrels agains an annual operating cost of $1.5m - or $330/barrel based on an 8% capital charge.
While a number of major oil producers are exploring the possibilities of this type of oil, the report states that "algae oil production will be neither quick nor plentiful", estimating that feasibility research alone will require another ten years to provide results. However, the report does state that the potential outcome could be the production of several billion gallons of renewable fuel produced anually in the US.