The future of biofuel may lie in one word: algae. The tiny primitive plants can produce a lot of oil in a little space. Solix Biofuels has a pilot plant in the New Belgium Brewing Company in Fort Collins, Colo., that uses the excess carbon dioxide from beer making to feed algae growing in indoor tanks. Global Green Solutions has a test facility in

El Paso, Tex., that grows algae in tall, thin, sunlit bioreactors.

One company prefers to stay in the dark, however. Solazyme in South San Francisco leases the vast fermentors used in industrial processes to grow specially tailored strains of algae in the dark. The algae swim in a bath of sugar water that delivers the sustenance they need to produce copious quantities of oil. The company can select different types of algae and alter the conditions they grow in to produce various oils that can be turned into diesel fuel, plastics or other products. “Some strains come from a swamp in Africa; some strains come from a high-altitude snowfield in South America,” says Harrison Dillon, a microbiologist and co-founder.

The firm has already produced thousands of gallons of oil, though not at “commercial economics,” as Dillon puts it. Notably, the company car, a diesel Jeep, runs on the stuff. And the U.S. military and the American Society for Testing and Materials have certified the diesel for a broad range of vehicles; the company plans to open its first dedicated production facility later this year. Dillon says refining production and scaling up processes will allow Solazyme to make algal oil a feedstock for diesel fuel that will cost only $2 per gallon. Because sunlight is not needed, improvements are easier to come by, he maintains. Solazyme may be the algae company furthest along in producing different oils at commercial volumes, which could potentially be used in everything from jets to kitchens. “My birthday cake was made with oil from algae: no butter, no oil, no eggs,” Dillon notes. “And it was delicious.”

Note: This article was originally printed with the title, "Dark Horse: Oil from Algae".