Over the last 25 years, significant research efforts have focused on algae for biofuel production and particularly biodiesel production. Algae can be grown in both salt and fresh water environments, in shallow ponds, tubes, or raceways utilizing waste mineral micronutrients. One area of research is the development of algae that have high lipid productivity [33, 34]. The algal oil would be extracted from the collected algae and converted to transportation fuels. Alternately if algae could be developed that excrete the lipids or excrete specific hydrocarbons, the algal collection could be eliminated reducing the cost. Progress had been made in the early 1990s, but due to decreased interest, efforts greatly slowed about a decade ago. Recent reevaluation suggests that current costs are well over $4.00 per gallon of fuel, and much more progress is needed if this technology is to have an impact in the foreseeable future . Many of the challenges are engineering challenges associated with how and where to grow the algae and how to achieve needed productivity. It appears that algal growth needs to be in closed systems to avoid contamination from other strains. Strains that consume large quantities of energy producing lipids tend to multiply slowly; whereas strains that do not produce substantial quantities of lipids multiply rapidly, quickly outnumbering and overwhelming the desirable strains in the "soup". This is a particular problem with open system algal growth. Alternatively, algae could be grown as a source of cellulose for biofuels production.
With the rapid developments in synthetic biology and the increasing ability to engineer new metabolic pathways into organisms to produce specific chemical or fuel products, the areas of synthetic biology and metabolic engineering for renewable fuel production offer significant potential and are receiving intense interest . The approaches being followed include using well-established recombinant DNA techniques to insert genes into microbes to make specific fuel precursors or even direct synthesis of hydrocarbon fuel components. Redesigning genes with computer assistance to accomplish specific synthesis and then synthesizing the desired genes for insertion into microbes hold significant potential. Yeasts can also be engineered to produce larger amounts of lipids which with additional metabolic engineering could be converted to useful products, potentially fuels. This work has not progressed as far as the work on bacteria to date. All of this work is far from the stage of being able to reliably estimate costs for fuels produced, but the intermediate to longer-term offers large potential.
Engineered microbes that produce and excrete specific hydrocarbons minimize the energy-consuming separation costs, although developing organisms that excrete the fuel products are a major challenge since most synthesis products, including hydrocarbons accumulate within the cell. However, properly designed hydrocarbon products in either the diesel range or gasoline range would not require significant refining and could fit directly into the existing infrastructure without building new infrastructure, as is needed for ethanol at larger scale. Although there are no specific processes that are approaching commercial evaluation, the level of activity and the current rate of progress could change that in the future. One example is 
employing synthetic biology to produce bacteria that make increased amounts of fatty acids and also inserting genes that produce enzymes that convert the fatty acids into hydrocarbons which are then excreted. The bacteria are claimed to make and excrete hydrocarbons of any length and structure that is desired. The hydrocarbon phase-separates from the growth medium, markedly reducing separation costs. The feedstock for the bacteria is renewable sugars which can be obtained from sugar cane or grain or from cellulosic biomass . A number of other attempts [35, 37] are under way.
In another approach, biomass is gasified, producing syngas, and the syngas mixture of carbon monoxide, carbon dioxide, and hydrogen are converted to alcohols using an aqueous bacterial culture . The challenges here are substantial in that this hybrid approach incurs the costs of thermal-chemical conversion and biochemical conversion and must resolve some of the challenges that each has to offer. At the same time, it can also take advantage of the benefits of each.
The array of activities, approaches, and start-up companies that are addressing these challenges offers the potential of evolving successful technology for the production of liquid biofuels that can compete with conventional fossil-based fuels. This potential is increased when (1) a longer-term increase in petroleum prices, and (2) a price or cost associated with CO2 emissions are considered. The occurrence of these latter two could well correspond with the timing required to develop to commercial readiness any one these bio-based options. Their potential is increased significantly when the on-going advances in synthetic biology and metabolic engineering are considered. Predicting the technology that will and will not succeed commercially is not possible, nor can reliable cost estimates be made at this point. Those technologies in early research and development need to advance further to evaluate their potential for commercial development and economic competitiveness.
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