Genetically engineered algae for biofuel?

Scientists in the US are developing genetically engineered strains of algae, mostly cyanobacteria ("blue green algae") to produce alkane fuels in quantity. They are confident that algal biofuel avoids many of the drawbacks of corn- or grass-biofuels, such as competition with food supply, low yields per hectare, and need for extensive processing.

However, they're running into problems of their own: need for large volumes of water, difficult in scaling up the process from the lab to the field, and the high volume of carbon dioxide consumption that these algae have. Some of the problems were unexpected, however:

"Shrimp think algae are good food," says CEO Pyle [of the company Sapphire Energy]. "If you don't pay attention, you will ultimately have a shrimp farm."

The returns on such an investment might not be too bad either!