Alternative fuels is an industry crawling with big promises, but they don’t come much bigger than this one: one billion gallons of carbon-neutral biofuel per year. Made from algae.

That’s the promise from Sapphire Energy, which is positioning itself to lead an emerging industry by working with airlines on test flights and ramping up its production facilities in New Mexico. If all goes as planned, the company says, it will be in the position to supply one million gallons of biofuel annually by 2011, 100 million gallons annually by 2018 and one billion gallons each year by 2025.

That’s all well and good, but biofuels are just another thing for us to burn for energy – what’s the big difference?

Another big benefit: algae sucks up lots of CO2. According to the Biodiesel Times, algae-based biofuel is considered carbon neutral because CO2 generated in its use is offset by what’s consumed during production.

OK, good. But here’s the bit that really struck me:

While Sapphire’s high-profile aviation tests have gotten the headlines, the company says that because its biofuel is a “drop in” fuel chemically identical to crude oil, it is compatible with anything on the road or in the air right now. It also plays nicely with existing refineries and pipelines. That’s another benefit over ethanol, which is corrosive and typically transported to terminals via truck or rail and then mixed with regular gasoline.

“We are 100-percent convinced that the only way to address climate and energy security is to use the same infrastructure we already have,” Sapphire’s Zenk said.

Now that’s a little more interesting. I don’t have the data or expertise to run the numbers on this sort of thing (is there a quant in the house?) but a replacement for mineral oils that wouldn’t require a huge investment in new peripherals has got to be worth looking into. Of course, as the article points out, it’ll take certification and industry take-up to make algal biodiesel truly viable as an industry, but it’s reassuring to see companies like Sapphire are thinking of the bigger picture. [image by Lee Nachtigal]

But maybe that’s the siren song of the easy option we’re hearing – would we really be better off keeping the systems we have, or should we be overhauling the entire global infrastructure of fuel production from the ground upwards?