APAC Biofuel Consultants joint chief executive Mike Cochran said that South Australia had taken a lead in producing biofuels from algae.

Mr Cochran said SA seemed to be on the right track with its focus on biofuel production from algae which was backed by the Premier's Department and the Government.

Alternative fuel sources were becoming an imperative as Australian crude-oil production declined and imports increase, he said.

"Australia is facing a large fuel security problem in the next 20 years as demand grows and domestic production declines,'' Mr Cochran said.

"A significant benefit of algae is it is not competing with food supply.''

Mr Cochran said SA had the right strain of algae with high oil content, good sunlight, water and land and the intellectual resources.

"It is a high-yielding crop, an absorber of carbon dioxide, low cost and does not compete with other plants as a source of food,'' Mr Cochran said.

"This includes having an excellent research capability, through organisations such as the Commonwealth Scientific and Industrial Research Organisation (CSIRO), the South Australian Research and Development Institute (SARDI), universities and private investors.''

Mr Cochran said a benefit of algae was that it was many times more productive than canola or other similar food crops.

"CSIRO makes the statement that 100 square miles of algae farm can produce Australia's diesel requirements,'' he said.

The report said that global interest in algae research and development was at an all-time high.
Major world oil companies were investing hundreds of millions of dollars in developing the technology.

SA's leadership includes the Algal Fuels Consortium, comprising SARDI and CSIRO, which has a pilot plant on Torrens Island.

General Atomics, which owns the Beverley Uranium project has also committed to support it.
Mr Cochran said fuel company Exxon Mobil had committed $600 million to algae research. Shell was also looking closely at algae development as an alternative to fossil fuels.

Copyright 2009 News Limited.