Algae fuel or algal biofuel is an alternative to liquid fossil fuels that uses algae as its source of energy-rich oils. Several companies and government agencies are funding efforts to reduce capital and operating costs and make algae fuel production commercially viable. Like fossil fuel, algae fuel releases CO2 when burnt, but unlike fossil fuel, algae fuel and other biofuels only release CO2 recently removed from the atmosphere via photosynthesis as the algae or plant grew. The energy crisis and the world food crisis have ignited interest in algaculture (farming algae) for making biodiesel and other biofuels using land unsuitable for agriculture. Among algal fuels' attractive characteristics are that they can be grown with minimal impact on fresh water resources, can be produced using saline and wastewater, have a high flash point, and are biodegradable and relatively harmless to the environment if spilled. Algae cost more per unit mass than other second-generation biofuel crops due to high capital and operating costs, but are claimed to yield between 10 and 100 times more fuel per unit area. The United States Department of Energy estimates that if algae fuel replaced all the petroleum fuel in the United States, it would require 15,000 square miles (39,000 km2), which is only 0.42% of the U.S. map, or about half of the land area of Maine. This is less than 1⁄7 the area of corn harvested in the United States in 2000.
According to the head of the Algal Biomass Organization, algae fuel can reach price parity with oil in 2018 if granted production tax credits. However, in 2013, Exxon Mobil Chairman and CEO Rex Tillerson said that after committing to spend up to $600 million over 10 years on development in a joint venture with J. Craig Venter's Synthetic Genomics in 2009, Exxon pulled back after four years (and $100 million) when it realized that algae fuel is "probably further" than 25 years away from commercial viability. On the other hand, Solazyme and Sapphire Energy already began commercial sales of algal biofuel in 2012 and 2013, respectively, and Algenol hopes to produce commercially in 2014.