As oil becomes increasingly costly and difficult to find, Royal Dutch Shell said yesterday that it was developing an unusual new fuel source: algae.

The Anglo-Dutch energy giant has begun to grow marine algae at a pilot facility in Hawaii to produce vegetable oil for processing into biofuel.

The research project has been undertaken as part of a joint venture, called Cellana, with HR Biopetroleum, an American micro-algae specialist.

Shell, which has taken a majority stake in the venture, said that algae was potentially a promising source of biofuel because it grows rapidly, is rich in vegetable oil and can be cultivated in ponds of seawater, minimising the use of fertile land and fresh water.

“Algae have great potential as a sustainable feedstock for production of diesel-type fuels with a very small CO2 footprint,” Graeme Sweeney, Shell’s executive vice-president, future fuels and CO2, said. “This demonstration will be an important test of the technology and, critically, of commercial viability.”

Algae can double its mass several times in a day and can produce more than 15 times more oil per hectare than alternatives such as rape, palm, soya or jatropha. Alternative sources of biofuel, particularly palm oil, have been linked with deforestation and the loss of agricultural land in developing countries.

Marine blooms of algae have the ability to absorb CO2 , so farming it also has the potential to absorb waste emissions directly from industrial or power plants. Globally, it is estimated that algae is responsible for more than 85 per cent of the net global production of oxygen through photosynthesis.

Sceptics have suggested that the use of algae to produce biofuels is prohibitively expensive compared with conventional fossil fuels. One study, by Krassen Dimitrov, an academic in Brisbane, Australia, indicated that it would be uneconomic unless oil prices reached as much as $800 per barrel.

Yesterday, Shell dismissed this claim. “We believe it would be economically viable,” a spokesman said.

Mr Sweeney said that Shell hoped that the initial 2.5 hectare pilot project could be expanded to 1,000 hectares and ultimately to 20,000 hectares if the fuel proved to be commercially viable.

He declined to comment on the size of the investment so far.

Construction of the demonstration facility on the Kona coast of Hawaii Island is set to begin immediately at a site leased from the Natural Energy Laboratory of Hawaii Authority.

The site will use open air seawater ponds to grow unmodified marine strains of algae that are native to Hawaii or have been approved by the Hawaii Department of Agriculture.

Once the algae is harvested, the vegetable oil will be extracted and processed into fuel using proprietary technology.

Academic researchers from the universities of Hawaii, Southern Mississippi and Dalhousie, in Nova Scotia, Canada, are involved in the project, which will identify which species of algae produce the highest yields of vegetable oil.

Algae has a long history of practical uses, variously as a plant fertiliser, in sewerage treatment and pharmaceuticals.

Weird science

—Algae may seem like one of the odder sources of energy, but there is no shortage of others. McDonald’s and Stagecoach, the coach group, have started to use recycled chip fat to power some of their vehicles. In theory, there is enough waste cooking oil in the UK to meet 1/380th of the country’s demand for road transport fuel

—San Francisco has started to experiment with converting pet faeces into methane. Scientists are also developing ways to convert human sewage into a fuel source

—Researchers at the California Institute of Technology believe that it could be possible to harvest energy from eddies and currents in water and the air, which conventional turbines are unable to do. The idea uses the principle that fish can use their bodies to gain an energy boost from surrounding vortices created by other fish or by stationary objects in the water

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