Synthetic Genomics has favored processes that use sunlight. They also tend toward bioengineered plants, but they will experiment as well with naturally occurring algae that optimize output and other parameters. Researchers have searched all over the planet for candidate species, said Jacobs.

So far, converting algae to fuel has been tried only on a small scale, and whatever process is used will require building massive new infrastructure for water management, feedstock supplies, nutrients, cultivation, and transportation, even if algae oil can be refined at existing facilities.

Algae can be grown on land unsuitable for food crops, but no one yet knows how to optimally produce the vast quantities of algae necessary to supply even a small fraction of the world’s appetite for fuel. A study in 2004 at the University of New Hampshire concluded that 30 million acres–a space the size of South Carolina–would be required to grow enough algae to satisfy U.S. transportation needs.

ExxonMobil’s investment comes after a mini-boomlet last year of investment in algae as oil prices skyrocketed. Other oil companies such as Chevron, Royal Dutch Shell, and BP have invested in algae. Last year, Bill Gates’s Cascade Investment fund invested a reported $50 million in Sapphire Energy, based in San Diego.

The investments slowed down considerably after oil prices fell, though the current collaboration suggests that more investments will be coming. The Department of Energy has just announced that it will invest $85 million in stimulus money on “advanced” biofuels that can be derived from algae and other feedstocks.

If successful, the collaboration between Venter’s company and ExxonMobil could mean an investment of billions of dollars, said Jacobs–numbers Craig Venter hasn’t seen in a commercial enterprise since the headiest days of Celera back in the late 1990s.

That venture produced exceptional science, but was less successful as a business. Time will tell if this latest high-risk gambit into a new and promising, but untried, technology will create a revolution in business and science or turn out to be just so much pond scum.