Out of all the clean energy options in development, it is algae-based biofuel that most closely resembles the composition of the crude oil that gets pumped out from beneath the sea bed. Much of what we know as petroleum was, after all, formed from these very microorganisms, through a natural heat-facilitated conversion that played out over the course of millions of years.

Now, researchers at the U.S. Department of Energy's Pacific Northwest National Laboratory in Richland, Washington, have discovered a way to not only replicate, but speed up this "cooking" process to the point where a small mixture of algae and water can be turned into a kind of crude oil in less than an hour. Besides being readily able to be refined into burnable gases like jet fuel, gasoline or diesel, the proprietary technology also generates, as a byproduct, chemical elements and minerals that can be used to produce electricity, natural gas and even fertilizer to, perhaps, grow even more algae. It could also help usher in algae as a viable alternative; an analysis has shown that implementing this technique on a wider scale may allow companies to sell biofuel commercially for as low as two dollars a gallon.

"When it comes down to it, Americans aren't like Europeans who tend to care more about reducing their carbon footprint," says lead investigator Douglas C. Elliott, who's researched alternative fuels for 40 years. "The driving force for adopting any kind of fuel is ultimately whether it's as cheap as the gasoline we're using now."

Scientists have long been intrigued by the laundry list of inherent advantages algae boasts over other energy sources. The U.S. Department of Energy, for instance, estimates that scaling up algae fuel production to meet the country's day-to-day oil consumption would take up about 15,000 square miles of land, roughly the size of a small state like Maryland. In comparison, replacing just the supply of diesel produced with bio-diesel from soybeans would require setting aside half of the nation's land mass.

Besides the potential for much higher yields, algae fuel is still cleaner than petroleum, as the marine plants devour carbon dioxide from the atmosphere. Agriculturally, algae flourishes in a a wide range of habitats, from ocean territories to wastewater environment. It isn't hazardous like nuclear fuel, and it is biodegradable, unlike solar panels and other mechanical interventions. It also doesn't compete with food supplies and, again, is similar enough to petrol that it can be refined just the same using existing facilities.

“Ethanol from corn needs to be blended with gas and modified vegetable oil for use with diesel," says Elliott. "But what we're making here in converting algae is more of a direct route that doesn't need special handling or blending."

Or, as algae researcher Juergen Polle of Brooklyn College puts it: "We cannot fly planes with ethanol. We need oil," he tells CBS News.

But while the infrastructure for corn-based ethanol production has expanded to the extent that most cars on the road run on gasoline blends comprised of 10 percent biofuel, the ongoing development of algae fuel has progressed ever-so glacially since the initial spark of interest in the 1980s. Industry experts attribute this languishing to the lack of a feasible method for producing algae fuel running as high as 10 dollars a gallon, according to a report in the New York Times. However, the promise of oil from algae was tantalizing enough that ExxonMobil, in 2009, enlisted the expertise of world renowned bioengineer Craig Venter's Synthetic Genomics lab to fabricate a genetic strain of lipid-rich algae, as a means to offset the expense of cultivating and processing the substance into a commercially attractive resource. Yet, despite investing $600 million into a considerably ambitious endeavor, the project was beset with "technical limitations," forcing the company to concede earlier this year that algae fuel is “probably further” than 25 years away from becoming mainstream.

The hydrothermal liquefaction system that Elliott's team developed isn't anything new. In fact, scientists tinkered with the technology amid an energy crisis during the 1970s as a way to gasify various forms of biomass like wood, eventually abandoning it a decade later as the price of gasoline returned to more reasonable levels. PNNL's lab-built version is, however, "relatively newer," and designed simply to demonstrate how replacing cost-intensive practices like drying the algae before mixing in chemicals with a streamlined approach makes the entire process much more cost-effective across all phases. Elliott explains, for example, that the bulk of the expenditures are spent on raising algae, which is either grown in what’s called an open-pond system, similar to natural environments, or in well-controlled conditions found in closed-loop systems. The open-pond system isn't too expensive to run, but it tends to yield more contaminated and unusable crops while artificial settings, where algae is farmed inside clear closed containers and fed sugar, are pricey to maintain.

"People have this slightly inaccurate idea that you can grow algae anywhere just because they'll find it growing in places like their swimming pool, but harvesting fuel-grade algae on a massive scale is actually very challenging," Elliott says. “The beauty of our system is you can put in just about any kind of algae into it, even mixed strains. You can grow as much as you can, any strain, even lower lipid types and we can turn it into crude."

Forbes energy reporter Christopher Helman has a good description of how this particular hydrothermal liquefaction technique works:

"You start with a source of algae mixed up with water. The ideal solution is 20% algae by weight. Then you send it, continuously, down a long tube that holds the algae at 660 degrees Fahrenheit and 3,000 psi for 30 minutes while stirring it. The time in this pressure cooker breaks down the algae (or other feedstock) and reforms it into oil. Given 100 pounds of algae feedstock, the system will yield 53 pounds of 'bio-oil' according to the PNNL studies. The oil is chemically very similar to light, sweet crude, with a complex mixture of light and heavy compounds, aromatics, phenolics, heterocyclics and alkanes in the C15 to C22 range."

Operating what's essentially an extreme pressure cooker at such a constant high temperature and stress does require a fair amount of power, though Elliott points out that they've built their system with heat recovery features to maximize the heat by cycling it back into the process, which should result in a significant net energy gain overall. As a bonus, the ensuing chemical reaction leaves behind a litany of compounds, such as hydrogen, oxygen and carbon dioxide, which can be used to form natural gas, while leftover minerals like nitrogen, phosphorus and potassium work well as fertilizer.

"It's a way of mimicking what happens naturally over an unfathomable length of time," he adds. "We're just doing it much, much faster."

Elliott's team has licensed the technology to the Utah-based startup Genifuel Corporation, which hopes to build upon the research and eventually implement it in a larger commercialized framework. He suggests that the technology would need to be scaled to convert roughly 608 metric tons of dry algae to crude per day to be financially sustainable.

"It's a formidable challenge, to make a biofuel that is cost-competitive with established petroleum-based fuels," Genifuel president James Oyler said in a statement. "This is a huge step in the right direction."