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Here are some excerpts on what companies are doing to reduce the cost of making oil and fuel from algae. This is from a recent article at Scientific American

Costs for algae-based fuel currently range from $10 to $100 per gallon, according to systems engineer Ron Pate at Sandia National Laboratories. “The idea [is] bringing algal oil down to $1 or $2 per gallon at a scale of 50 million gallons [190 million liters] per year.”

High cost is a problem throughout the algal biofuels industry. “It’s energy cost to pump the water,” says Craig Harting, chief operating officer for Vancouver-based Global Green Solutions, which is building 100 bioreactors (large plastic devices used to grow algae) at a pilot plant in El Paso, Tex. “It’s capital cost to build bioreactors. It’s the harvesting and extraction process.”

As a result, most companies say they have yet to determine the consumer price tag for algae-derived oil—or to produce much of the stuff—though Wolfson says Solazyme’s goal is $40 to $80 a barrel—competitive with fossil oil.

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