Oregon Public Broadcasting

Fuel made from algae could be the next up and coming source of global energy.

It’s adaptable to different environments and can be fed wastewater and even absorb carbon dioxide from coal-burning plants. In this way it’s unique; it can purify air and water while creating diesel fuel to power cars.

Becca Bartleson reports on the promise of algae oil.

Ann Holland and Mindy Cash park their car in front of a bio-diesel pump at Jay’s Garage in southeast Portland. Holland says she’d love to fill her tank with fuel made from algae.

Ann Holland: "Well what I know is that it doesn’t take the same amount of acreage and resources to grow and so its production of carbon is much more efficient and I even heard it can be used to clean smokestacks and then be turned into fuel, which is really exciting."

The couple probably uses more bio-diesel than most.

Mindy Cash: "We’re running both of our cars and our furnace in our household on...."

Ann Holland: "A hundred percent"

Mindy Cash: "So we’re a totally petroleum free household."

One place that's working hard to make bio-fuel from algae is Oregon State University. Assistant professor Ganti Murthy is growing it in ponds outside as well as in a laboratory setting. He is also experimenting with feeding it wastewater.

Ganti Murthy: "The whole logic behind this process is essentially we are looking at cleaning up the waste water by growing algae in it and then using that algae to produce fuels. Because 85% of the cost comes from the feedstock so if you can reduce the price of the feed stock we can make the bio-diesel more economical."

Murthy says one of main drawbacks of bio-fuels is they take corn and soybeans away from the food market.

This increases the cost of the food, and the fuel is expensive.

Harrison Dillon is co-founder of Solazyme, a renewable oil company that's now producing fuel from algae. His company recently showcased its discoveries at the Governor’s Global Climate Summit in California.

Harrison Dillon: "We can get a lot more gallons of bio-diesel ultimately out of our process per acre of cultivated land than if you were using say that land for soybeans instead."

Solazyme’s diesel is road-ready. It's been tested on regular diesel car engines, without any modification. Dillon says the company's even made jet fuel.

Harrison Dillon: "At the end of the process we have algae that is mostly oil, we then separate that oil from the algae and at that point you basically have crude oil and you can do anything you want with it."

But even if algae oil is not the energy of the future, OSU Professor Ganti Murthy sees many other benefits from his experiments.

Ganti Murthy: "The advantage with algae is you can use almost any kind of water. It’s like pond scum so it grows everywhere! And even if we are running our cars on electricity we need something to clean up our water and it addresses not only the energy issue but it also addresses the water issue."

Murthy expects algae oil to be available nationwide in five to 10 years. And Solazyme’s Harrison Dillon says his company's fuel will go to market in less than  three.