If I had to name an underdog of the alt-fuel world, it would have to be algae-based oil. One of the most abundant lifeforms on the planet, algae fuel has been a darling of the U.S. Navy, but has otherwise failed to impact the light vehicle market. But new research shows that our existing oil refineries could process crude algae oil, meaning most of the infrastructure is already in place.

OriginOil, a leader in algae fuel research, has announced that it has developed a drop-in crude oil version of its algae fuel that can be processed at existing petroleum refineries. That is great news, and will give OriginOil’s algae fuel a lot of appeal among those looking for an easy fix to our foreign oil issues. OriginOil is working with the U.S. Department of Energy and the University of Idaho to develop an “integrated system” for the direct conversion of raw algae into a renewable source of crude oil. This breakthrough could also negate the necessity of huge oil pipelines like the recently-rejected Keystone XL pipeline that would have cut 1,700 miles from Canada to the Gulf of Mexico.

Which brings us to one of the hold-ups of algae fuel; farming the algae. There are multiple strains of algae, and while in theory it could be farmed locally at giant retaining ponds, it would take a lot of algae pools to replace the 20 million or so barrels of oil that America consumes every day, though OriginOil has been working on solutions to that issue too. Another option would be to farm it at sea, or in places like the Gulf of Mexico. But that could raise other environmental concerns. And keeping older refineries online may not be such a good thing either. The last oil refinery opened in the U.S. was in 1976, and there are currently 149 operating oil refineries in the U.S., about half the number that existed in 1981. Oil companies have been closing refineries as advances in refining allow them to process more oil at fewer facilities, allowing about 17.9 million barrels of oil to be refined every day.

But I think algae oil has a lot of promise as a replacement for oil, and in the short term at least we could theoretically wean ourselves off of imported oil, at the very least. Some estimates argue that algae alone could cut foreign oil imports by as much as 17%. Convert a handful of refineries to algae oil production gradually, and soon enough we’ll be using a whole lot less oil from unfriendly nations like Venezuela.

That is, if Big Oil will cooperate…which seems rather unlikely without a Congressional mandate similar to the ethanol blending credit. And Americans don’t seem to have much tolerance for such subsidies these days…

Source: OriginOil | Image: Nagel Photography via Shutterstock