According to the US Department of Energy, a network of farms totaling an area half the size of Maine could grow enough biofuel to replace all of the oil used in the US. Algae can be converted into various types of fuels, depending on the technique and the part of the cells used. The lipid, or oily part of the algae biomass can be extracted and converted into biodiesel through a process similar to that used for any other vegetable oil, or converted in a refinery into “drop-in” replacements for petroleum-based fuels. Alternatively or following lipid extraction, the carbohydrate content of algae can be fermented into bioethanol or butanol fuel.

Algae fuel or algal biofuel is an alternative to liquid fossil fuels that uses algae as its source of energy-rich oils. Also, algae fuels are an alternative to common known biofuel sources, such as corn and sugarcane. Several companies and government agencies are funding efforts to reduce capital and operating costs and make algae fuel production commercially viable. Like fossil fuel, algae fuel releases CO2 when burnt, but unlike fossil fuel, algae fuel and other biofuels only release CO2 recently removed from the atmosphere via photosynthesis as the algae or plant grew. The energy crisis and the world food crisis have ignited interest in algaculture (farming algae) for making biodiesel and other biofuels using land unsuitable for agriculture.

Among algal fuels’ attractive characteristics are that they can be grown with minimal impact on fresh water resources, can be produced using saline and wastewater, have a high flash point, and are biodegradable and relatively harmless to the environment if spilled. Algae cost more per unit mass than other second-generation biofuel crops due to high capital and operating costs, but are claimed to yield between 10 and 100 times more fuel per unit area. The United States Department of Energy estimates that if algae fuel replaced all the petroleum fuel in the United States, it would require 15,000 square miles (39,000 km2), which is only 0.42% of the U.S. map, or about half of the land area of Maine. This is less than 17 the area of corn harvested in the United States in 2000.

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