The need to find a new generation of fuels has never been greater. Earlier this month, the cost of oil hit $100 a barrel for the first time, leading to sky-high prices at petrol pumps all over the world. And consumption shows no signs of slowing as the new economic powerhouses of China and India continue to develop a seemingly insatiable thirst for the black gold. In smog-choked Beijing alone, more than 1,000 new private cars hit the roads every day – that's about one every 90 seconds.
No surprise, then, that in recent months the race to develop alternatives to four-star and diesel has really started to hot up. Some of the solutions proposed by white-suited engineers in the world's fuel labs sound closer to science fiction. Take the Counter Rotating Ring Receiver Reactor Recuperator (CR5), for example. The prototype, unveiled in the desert of New Mexico, has an eight-metre-wide dish of mirrors that focus sunlight on a "solar furnace". There, the heat from all that energy breaks down carbon dioxide into oxygen and carbon monoxide.
The CR5 was developed by scientists at Sandia, a US government-funded laboratory. If the dish goes into production, the C02 fed into the furnace would come from power stations run on fossil fuels. And perhaps, Sandia hopes, it may also come straight from the air around us.
In the race to find a practical and renewable fuel, producing carbon monoxide from air – without having to plug any equipment into the grid – is a significant achievement. Carbon monoxide is a building block for hydrocarbons, the key compounds in crude oil. Petrol from thin air? No wonder the US government is backing that idea, although it could be 20 years before the CR5 hits the market.
Meanwhile, in Hawaii, the petroleum giant Shell has more immediate plans. Its ingenious system aims to produce biodiesel from pond scum. It might sound outlandish, but algae has become something of a buzzword in future-fuel circles. If Shell, the first oil major to invest in algal oils, can show the technique to be a viable alternative to standard diesel and existing biofuels, algal fuels could soon appear on a forecourt near you.
Of course, biofuels – fuels produced from crops – aren't new. Henry Ford designed a car to run on ethanol 100 years ago, but gasoline made from oil became the fuel of choice thanks to its low price. But today, sky-high prices caused by the combined threats of emptying oil wells, climate change and Middle East instability mean that production of biofuels has soared in recent years.
Even President George Bush, a notorious heel-dragger on environmental issues, said in 2006 that the US should replace 75 per cent of imported oil with biofuel by 2025. The UK Government wants 5 per cent of transport fuel sold at the pumps to be biofuel by 2010. Biofuels now comprise 1 per cent of global transport fuel and its share is growing fast.
But in recent months, a growing band of experts has raised doubts about the biofuels bandwagon, and about the environmental credentials of these supposedly "green" new fuels. Problems include the demands they make on arable land, the need for water for irrigation, and the amount of energy they actually produce.
Across the US and Brazil, among other countries, crops such as sugar cane, maize, rapeseed and palm are being grown to produce millions of gallons of biodiesel and bioethanol (an alternative to petrol). Globally, about 12 million hectares – or about 1 per cent of the world's fields – are devoted to biofuel crops. In many cases forested areas, as well as land that could be devoted to producing food, are being stripped to make way for biofuels.
That cannot continue, researchers say. The International Institute for Applied Systems Analysis in Austria has estimated that there are no more than 300 million hectares of land in the world that could be used for biofuels, but that it will require 290 million hectares to meet one-tenth of global energy demands in 2030. But by then, a further 200 million hectares will be needed just to feed the three billion more people in the world. The figures don't add up.
And then there is the water needed to cultivate these thirsty crops. Scientists at the Stockholm Environment Institute in Sweden predict that switching just half of the fossil fuels that will be needed for transport and electricity by 2050 to biofuels would use up to 12,000 extra cubic kilometres of water per year. That almost matches the annual flow of water down all the world's rivers.
Also, producing biofuels soaks up generous quantities of nitrogen-based fertilisers. Some of the nitrogen is converted into nitrogen oxide, which, in the long term, has 300 times the warming effect of carbon dioxide. Factoring in these emissions, scientists have shown that some biofuels produce more – not less – greenhouse gases than their oil-derived predecessors. The warming caused by nitrous oxide emissions in rapeseed biodiesel, for example, is up to 1.7 times as much as the cooling effect of replacing fossil fuels.
A slew of such studies has led to a demand for genuinely sustainable, or "second generation", biofuels. Shell thinks the answer could lie with algae. "I think we should be very excited about this kind of technology," says Darran Messem, Shell's vice-president of fuel development. "It's very important that we diversify oil supply away from food sources."
Unless you are a goldfish, algae are not a food source, which is one of their biggest advantages as a biofuel source. Another is low demand on land. "We estimate we can achieve 15 times the biofuel yield per hectare using algae rather than conventional crops," Messem says. Algae achieve this thanks in part to their remarkable growth rate; they can double their mass several times a day and can be grown in high density in man-made coastal ponds that don't compete with agricultural land.
An acre of maize can produce just over 1,000 litres of ethanol a year, and an acre of soybeans just 227 litres. In theory, an acre of algae could produce 19,000 litres of biofuel a year – and the organism can be harvested daily rather than annually. What's more, algae have an extraordinary capacity for absorbing CO2, owing to the organism's ultra-efficient photosynthesis. This efficiency is also the reason for the rapid growth.
Like the CR5 dish, it is hoped that algae farms could use the CO2 waste from power stations, creating the possibility of power plants that produce fuel simply as a by-product of electricity, rather than pumping tons of CO2 into the atmosphere. Shell says a 1,000-hectare algae facility would absorb 300,000 tons of CO2, which, even factoring in the fossil fuels that would be consumed in processing algal oils, would be the equivalent of taking 70,000 medium-sized cars off the road.
To test these impressive statistics, Shell's pilot facility in Hawaii will measure just 2.5 hectares in area – about the size of three football pitches – and will produce biodiesel for two years. If the trial is successful, a 1,000-hectare facility will follow. "A full-scale commercial facility would need to be much larger, at around 20,000 hectares," Messem says. "Those are big numbers, but not in the context of overall agricultural production, particularly in the US."
Shell isn't yet explaining exactly how its Hawaii plant will turn algae into fuel, but it goes something like this: natural algae, which flourish in the warm sea off Hawaii, are fed sea water in concrete pools. Carbon dioxide is bubbled through the ponds, and a small amount of proprietary fertiliser is added. The fully grown algae are then skimmed off the surface and processed into biodiesel. "I can't go into details, but we want to work on low-energy methods that extract oils from the lipids in algae and convert them into biodiesel," Messem says.
Shell is by no means alone in these plans. There are small-scale pilot plants in the deserts of Arizona and Utah, where algae are grown in sealed bags or on hi-tech solar racks and flushed with water. This means that algae fuel plants might not need to be beside the sea.
At the Science Museum in London, a small algal system is the centrepiece of an exhibition titled Can Algae Save the World?. "The area's really blown up again just in the past six months," says Dr Geraint Evans, head of biofuels at the National Non-Food Crops Centre in York.
While the techniques sound hi-tech, the fuels derived from algae are not new. The US Department of Energy began researching them in the 1970s as the oil price rose, but abandoned them in the 1990s as the cost of a barrel fell again.
Dr Evans is upbeat about algae's potential as it comes back into vogue. "If algal oils can show they are genuinely sustainable, I think they could be a very attractive alternative."
But Evans predicts that it will be at least 50 years before petrol and diesel are replaced, whether by fuels from solar furnaces or algae beds. "I think of these things as wedges," he says. "Conventional biodiesel is a wedge that I don't see providing more than 10 per cent of transport fuel needs. Oils from maize, say, might be another 10 per cent, with algae providing a further wedge. Oil will be replaced eventually, but not by one thing."