Algaeus, the first plug-in hybrid vehicle to cross the U.S. on fuel containing a blend of algae-based fuel, finishes its cross-country tour today in New York City. The event kicks of the nationwide premiere of FUEL, a Sundance Film Festival award winning documentary addressing the country’s reliance on foreign oil, but also suggesting solutions. To view a trailer, visit www.thefuelfilm.com.

The vehicle, fueled by an algae-blend product developed by Sapphire Energy, San Diego, CA, gets 150 miles per gallon. It is based on a 2008 Toyota Prius that has been equipped with an added battery pack, a plug and an advanced energy management system. The engine has not been modified.

Sapphire Energy has attracted the likes of Bill Gates, who has invested in the company.

Entrepreneurs and researchers are working to developed algae strains that can be grown and harvested cheaply and then converted into fuel. In an article this week in The New York Times (http://www.nytimes.com/gwire/2009/09/17/17greenwire-algae-as-fuel-of-the-future-faces-great-expect-71147.html), Stephen Mayfield, one of the founders of Sapphire Energy and head of the Mayfield Lab at the Scripps Research Institute in San Diego, said that, currently, algae fuel costs about $10 per gallon to make now. He is confident, however, that the cost can be brought down to compete with gasoline.

Mayfield has brought together other algae researchers in a consortium called the San Diego Center for Algae Biotechnology (http://algae.ucsd.edu), which has just applied for a Department of Energy grant that would provide $50 million over three years. SD-CAB has teamed up with the Lawrence Berkeley National Laboratory, University of Nebraska, John Hopkins University, Rutgers University, Princeton University, Cornell University, University of California-Davis and Brooklyn College in New York on this application.

Winning this grant could also attract significant contributions from several corporate partners.

Several other players in the algae business have been discussing the economics of algae-based fuel commercialization this week at the National Algae Association’s (www.nationalalgaeassociation.com) conference in Houston, TX.