Like the rest of Big Oil, Royal Dutch Shell is like a party-goer on St. Patrick’s Day: desperately looking for something green. Its latest move? A joint-venture with a Hawaiian firm to develop biofuels out of algae.

 
Power source of the future? (Wikipedia)
 

What’s interesting about Shell’s plan is that it bucks recent trends in the field and harkens back to Carter-era efforts to coax oil out of algae, relying on open ponds of the green stuff which can then be mashed or chemically-treated to wring out oil.

Shell is no stranger to the green game. The Anglo-Dutch oil giant is already fairly active in wind power and dabbles in second-generation solar panels. (Maybe not for long: the Guardian reports that Shell is selling out of its unprofitable Asian solar business.)

It’s no stranger to biofuels, either — the company says it is the world’s biggest distributor. And with gas prices soaring, biofuels are the new frontier, even for Big Oil.

So-called second-generation, or celluosic biofuels — green fuels made out of stuff no one wants to eat anyway — are all the rage, given concerns in much of the developing world that thirst for biofuels derived from edible plants like palm oil, corn, canola, sugar cane, and the like is stealing farmland and water from people who need to eat.

In that sense, algae always seemed promising as a biofuel feedstock. They devour CO2, multiply like rabbits, are oily, and don’t need much land. The U.S. Department of Energy spent almost twenty years studying more than 3,000 varieties of algae to see what would work. Nothing did; Clinton pulled the plug in 1996.

That is because algae-to-oil is a balancing act: Only the hardiest strains thrive with temperature variations, and they have fewer lipids. Really greasy algae aren’t outdoors types. So a lot of small algae biofuel companies prefer “photobioreactors,” or grow closets for algae. Others go back to the farm, but keep algae under wraps.

Shell says its pilot project will determine which strains of algae are commercially viable and which will best be able to suck up CO2 emissions from power plants. In the meantime, its Hawaiian project will be using bottled CO2.