Based on this analysis and consistent with some earlier research, there are a few approaches and areas of opportunity where innovations would make the biggest impact in terms of improving the energy balance, economic profitability, and water intensity of algal biofuel production. These im­provements include:

1. using waste and recycled nutrients (e. g., waste water and animal waste) [11,15,25-28,65,71,72];

2. using waste heat and flue-gas from industrial plants [44,59], car­bon in wastewater [28], or developing energy-efficient means of using atmospheric CO2;

3. developing ultra-productive algal strains (e. g., genetically modi­fied organisms) [73-75];

4. minimizing pumping [58,76,77];

5. establishing energy-efficient water treatment and recycling meth­ods [55];

6. employing energy-efficient harvesting methods, such as chemical flocculation [66,78,79], and

7. avoiding separation via distillation.

The development of genetically modified organisms that secrete oils might provide parallel reductions in energy expense, as the oil might be more easily collected. Policies (e. g., carbon legislation) and externalities could change algal biofuel economics, but not energy accounting. Addi­tionally, algae can produce nutraceutical and pharmaceutical co-products, which could significantly improve the overall process economics. For comparison, co-products account for approximately 20% of the energy value for corn ethanol [13]; because co-products from algae find markets in higher value industries, algal fuels will likely have higher co-product al­location than from corn seed. The most favorable scenario for algal biofuel production is one that can use each of the improvements listed above. Im­plementing growth and processing technology advancements, in conjunc­tion with co-locating facilities with discounted energy and materials (i. e., electricity plants, waste water treatment plants, livestock feed lots, etc.) offers the potential for profitable algal biofuel production, and this concept has been proposed by several researchers [11,15,25,26,28,44]. However, relying on waste materials as feedstock relegates algal biofuel production to relatively low volumes [11,28,71].

Overall, it is most important that the EROI for the energy sector is greater than unity, including contributions from all energy resources. Al­though the results of this study suggest that the EROI for algal fuels will remain less than one without significant biotechnology innovations, algae represent one of the few alternative feedstocks capable of producing pe­troleum fuel substitutes directly (without expensive gasification or Fisch — er-Tropsch processes) for applications that require high energy-density, such as aviation. Thus, even though algal biofuels face significant hurdles before becoming large-scale substitutes for petroleum, they have the po­tential to satisfy niche markets in the short-term, while implementation of “game-changing” biotechnology advances are needed for sustainable large-scale algal biofuel production.

When looking forward towards those potential advances, it is the au­thors’ hope that the analytical approach presented in this manuscript will provide a useful framework with which progress can be tracked. Specifi­cally, we think this framework will be useful for tracking energy, cost, water and other resource inputs and outputs of cultivation.