Hi Tony-
I've been marginally involved in an algae-to-biodiesel project where they have been growing algae in "photobioreactors" (PBRs), in which they supply scrubbed biodiesel exhaust to the algae as a CO2 source. So they are both using the algae to sequester CO2 emissions, and as an *eventual* fuel source.

However, there are some technical issues even before you get to the "how do you make fuel out of these buggers" stage. For example, you need to cultivate a LOT of algae to capture the CO2 emissions of even one relatively small generator. So, what do you do with those algae? Well, you can use it for food (but maybe not human food chain if the diesel exhaust ends up filling them up with PAHs and various heavy metals-- it wouldn't exactly be "organic" algae), or fertilizer, or compost, but either way you end up with a materials handling issue-- tons and tons of wet algae that you have to strain from the water and dry (and in the mean time, find somewhere to store a growing pile of dead algae).

There are still technical issues involved with extracting oil from algae (solvent extraction? centrifuges? thermal? etc), but even then you have a pretty good mass of algae cake "byproduct" to deal with (and "waste" if you can't find a use).

none of this is to say that it's "impossible" (since that word is really just a challenge to do something new, not a statement of fact!), but these are some technical difficulties you will be confronting, and areas in which there is currently a lot of investigation, research, interest, and change.

So my advice, based on the limited amount that I know about this

Think through and sketch out the whole system-- what goes into it (and where are you going to get it?) and what comes out of it (and what are you going to do with it?). As you do this, you can identify both suppliers and markets, and if there aren't any, issues that need to be dealt with to make your project feasible. Also, relevant to investors, you will be a lot more attractive to investors once you can demonstrate that you've got this all worked out than beforehand.

Some resources that I'm aware of:
1) there is a tribe on Tribe called the "Chlorophyll Collective" not sure how active, but these folks are trying to develop open-source methods that will allow anyone to cultivate algae for bio-fuel.
2) there is a yahoo group called oil-from-algae that may be a resource. They have people ranging from folks who have been working on "home-brew" methods for several years to folks that are engineers or marketing directors for companies that are looking at algae to bio-fuel as either a market opportunity and/or a way to sequester CO2 from power plant emissions, etc.

sorry for the length of this post, but hope the info helps-
~C

I agree with you completely. It doesnt have to be the way it is right now. There are better ways to make biofuels and one of the best has been completely ignored. Methanol is far better than Ethanol in quite a few ways and does not impact the food production industry at all, rather it builds and supports it.

I have been working on a plan to put a large scale methanol operation into place in every city in american and have gotten some great praise even from members of the US congress.

There are workable ecotechnical solutions available and coherent and well established methods and comprehensive packages that can be put in place if people would just wake up and get their priorities right.

The sad part it is that it is also cheap, proven in all of it's component stages and systems, reliable and efficient, and thus even profitable, yet it has not been built yet.