Algae has the potential for large-scale biofuel production, but there have been some hold ups with harvesting and conversion to ethanol. Algenol Biofuels says they’ve found a way to convert algae directly into ethanol — and cheaply.

The Florida-based company claims to have found a way to pass Go and collect their $200: they’re using algae, sunlight, CO2 and seawater in a closed bioreactor to produce ethanol. While ethanol is a perfectly respectable biofuel, most algae companies haven’t pursued it. Biodiesel has seemed to be a more practical avenue of investigation.

But Algenol’s process seems to be significantly less expensive than the approaches other algae companies have taken. They expect to have a production facility in Sonora, Mexico online by the end of 2009. This seems to be a wait-and-see situation: Algenol has made claims that within five years, they’ll produce 1 billion gallons. Since I’m not too familiar with Algenol’s methods — most of which are patented — I don’t know just how scalable they actually are. Down the road, we’ll take another look at it and see if the company is actually producing biofuel on such a grand scale. If Algenol does pull it off, they may be selling the cheapest fuel available anywhere in the world.

Photo courtesy Algenol Biofuels