'We think it is a really elegant solution," said Matt Atwood, the chief executive. At its heart is a "hydrothermal liquefaction" system that heats the algae and other solids in the sewage to more than 550 degrees Fahrenheit, at 3,000 pounds per square inch, turning out a liquid that resembles crude oil from a well.
The company sent the liquid to Auburn University, where scientists added hydrogen (a common step in oil refining) to produce diesel fuel. An independent laboratory, Intertek, confirmed that the diesel fuel met industry specifications. The thermal processing has caught the attention of independent scientists. The Department of Energy recently awarded a $4 million grant to a partnership led by SRI International for further work on Algae Systems' hydrothermal processing system…
Some companies have tried gene-altered algae, but Algae Systems uses naturally occurring forms drawn from the bay. Whichever strain flourishes in the bags is what the company uses. "We call it the Hunger Games," Mr. Atwood said.
The early results were promising enough for IHI, a Japanese conglomerate, to invest $15 million.'