As a result of the algal screening efforts by SERI subcontractors and in-house researchers, several algal species were identified as good candidates for biodiesel production during the early 1980s. This was facilitated by the development of a cytochemical staining technique for intracellular lipids that allowed researchers to visualize storage lipid droplets in algal cells (see Section II. A.Lf. and Lien 1981a). Two of the most promising candidates were the green alga N. oleoabundans, which showed a high lipid content and rapid growth, and a Chlorella strain (CHLS01) isolated from a local site.

First, a sensitive method to monitor nitrate levels in liquid cultures using ion chromatography was developed to study the effects of N limitation on lipid accumulation in these organisms. Algal growth, lipid content, and chlorophyll a content were measured in batch cultures of N. oleoabundans and CHLS01. Cell division and chlorophyll accumulation occurred rapidly in the cultures as long as N was present. When N was depleted, cell division stopped, although biomass accumulation continued for several days. The major portion of the new biomass was composed of lipids and storage oils. N depletion resulted in a rapid decrease in the level of chlorophyll a in the cultures, suggesting that the cells might metabolize chlorophyll during periods of nitrogen stress. There was also an increase in the ratio of carotenoid to chlorophyll and a significant decrease in the complexity of the intracellular membranes in N-starved cells. These last three observations indicated that the photophysiology of the cells was affected, suggesting that the lipid trigger could also directly or indirectly alter photosynthetic efficiency in the treated cells (discussed in more detail below).