The Climate Spectator has an article on Qantas' interest in jet fuel derived from algae - Oil and water.

Qantas last week announced the launch of its sustainable fuel strategy, a collaboration with San Francisco-based renewable energy group, Solazyme, to explore opportunities for algae-based sustainable aviation fuel. Qantas and Solazyme will work together over the next year to pursue potential for commercial production of Solazyme’s microbial derived aviation fuel, Solajet, in Australia. This latest move is part of the airline's long-term strategy to accelerate the commercialisation of 'drop-in' alternative jet fuels to help cut greenhouse gas emissions. Qantas already has a similar arrangement with the Solena Group for waste-based sustainable fuel.

In Australia, demand for aviation fuel is currently at about six billion litres a year, and Qantas’ Peter Broschofsky, who is coordinating the biofuels initiative as well as chairing the environment committee of the International Air Transport Association (IATA), says that $180 per gallon fuel in 2008 helped move the concept of lower cost, lower emission biofuels out of the too-hard basket. He also described how Boeing galvanised the industry behind the development of the Bio-SPK jet fuel specification, which most are predicting will be approved in the first half of 2011 and possibly late in the first quarter, says BiofuelsDigest. “Watch the flood,” Broschofsky predicted, “after the fuel is certified, interest will be at a fever pitch, and we want to get in ahead.”

As for the technology, according to Solazyme, it "allows algae to produce oil and biomaterials in standard fermentation facilities quickly, efficiently and at large scale." These can then be tailored for biofuel production, as well for the replacement for fossil fuels and plant oils. According to the company's website, a study undertaken in 2009 concluded that full lifecycle greenhouse gas emissions from field-to-wheels for Solazyme's algal biofuel, Soladiesel, are 85 to 93 per cent lower than standard petroleum-based ultra-low sulfur diesel (ULSD).

The Energy Blog has a post on an algae to biofuel firm making some grand claims about their new operation - Petrosun to Start Commercial Operation of 4.4 MGY Algae Oil Plant". Most commenters seem highly dubious about the company involved. I like the April 1st launch date - pretty funny if it is a scam.

PetroSun, Inc announced that their Rio Hondo, Texas algae farm will commence operations on April 1, 2008 as PetroSun's initial commercial algae-to-biofuels facility. The current algae farm consists of 1,100 acres of saltwater ponds that the company projects will produce a minimum of 4.4 million gallons of algal oil and 110 million pounds of biomass on an annual basis. The company has dedicated 20 acres of ponds for a proposed algae derived JP8 jet fuel research and development program.

The Rio Hondo algae farm will be expanded in the future to provide the feedstock required by present or proposed company owned or joint ventured biodiesel and ethanol refineries. The Company plans to construct or acquire additional plants in the Gulf Coast region that are reachable via barge up the Mississippi River and its tributaries. The previously announced Bridgeport, Alabama refinery will receive algal oil feedstock from this distribution program.

"Our business model has been focused on proving the commercial feasibility of the firms' algae-to-biofuels technology during the past eighteen months Whether we have arrived at this point in time by a superior technological approach, sheer luck or a redneck can-do attitude, the fact remains that microalgae can outperform the current feedstocks utilized for conversion to biodiesel and ethanol, yet do not impact the consumable food markets or fresh water resources."

-- Gordon LeBlanc, Jr., CEO of Petrosun

Petrosun plans to establish algae farms and algal oil extraction plants in Alabama, Arizona, Louisiana, Mexico, Brazil and Australia during 2008. The algal oil product will be marketed as feedstock to existing biodiesel refiners and planned company owned refineries.

I don't think any other algae producing firms have reached this milestone. The production of algae oil is the critical step in producing biofuels from algae. Algae has the potential to produce all the petroleum needs for transportation on 2% of the land area of the US, which could be located on desert or semi-arable land.

"Greensters" (green oldsters) won't forget the gas station waiting lines that were routine under the US Presidential Administration of Jimmy Carter. On the plus side, the inconvenience alone led to people buying more efficient vehicles. This, in turn, had a negative feedback loop: Japan, Inc. got to eat Detroit's lunch with a dash of reliability & quality: efficiency was almost a side-dish by the time Motown car designers smelled the coffee.

Turns out, Jimmy's foresight had another plus side that, to this day, shows no sign of a negative feedback loop. Through a $25 million dollar biodiesel research program, his Administration set in motion the creation of an intellectual property bank that is a foundation of today's booming algae-based biodiesel industry. The private sector payback - although many years delayed - is likely to be significant.

Solazyme are one the companies that seem to be making the most progress in coming up with a viable algae to biofuel process. I'm a little uncertain about their latest innovation (doing away with sunlight and instead feeding the algae sugar - any parent can tell you this is a bad idea when dealing with growing children) but Technology Review says that they produce more oil this way.

Solazyme, a startup based in South San Francisco, CA, has developed a new way to convert biomass into fuel using algae, and the method could lead to less expensive biofuels. The company recently demonstrated its algae-based fuel in a diesel car, and in January, it announced a development and testing agreement with Chevron. Late last year, the company received a $2 million grant from the National Institute of Standards and Technology to develop a substitute for crude oil based on algae.

The new process combines genetically modified strains of algae with an uncommon approach to growing algae to reduce the cost of making fuel. Rather than growing algae in ponds or enclosed in plastic tubes that are exposed to the sun, as other companies are trying to do, Solazyme grows the organisms in the dark, inside huge stainless-steel containers. The company's researchers feed algae sugar, which the organisms then convert into various types of oil. The oil can be extracted and further processed to make a range of fuels, including diesel and jet fuel, as well as other products. ...

The process also has significant advantages over a quite different way of using algae to create biofuels--one that makes use of algae's ability to employ sunlight to produce their own supply of sugar, using photosynthesis. In these approaches, the algae are grown in ponds or bioreactors where they are exposed to sunlight and make their own sugar. In Solazyme's approach, the researchers deliberately turn off photosynthetic processes by keeping the algae in the dark. Instead of getting energy from sunlight, the algae get energy from the sugars that the researchers feed them.

Solazyme's process of growing the algae in the dark has a couple of advantages over approaches that use ponds or bioreactors. First, keeping the algae in the dark causes them to produce more oil than they do in the light. That's because while their photosynthetic processes are inactive, other metabolic processes that convert sugar into oil become active.

Just as important, feeding algae sugar makes it possible to grow them in concentrations that are orders of magnitude higher than when they're grown in ponds using energy from the sun, says Eric Jarvis, a biofuels researcher at the National Renewable Energy Laboratory, in Golden, CO. (Jarvis is not connected to Solazyme.) That's in part because the sugar provides a concentrated source of energy. These higher concentrations reduce the amount of infrastructure needed to grow the algae, and also make it much easier to collect the algae and extract the oil, Jarvis says, significantly reducing costs. High capital costs have so far stymied other attempts to make fuel from algae.

In spite of these advantages over other approaches, Solazyme's method for creating fuel is not yet cheap enough to compete with fuels made from petroleum, Dillon says. Indeed, Jarvis warns that one of the most expensive parts of making fuels from cellulosic sources is processing them to create simple sugars, a part of the process that Solazyme isn't focused on improving. But in the past 18 months, improvements in the amount of oil that the algae produce have convinced the company that competitive costs are within reach. Solazyme hopes to begin selling its fuel in two to three years, Dillon says.