Solarzyme is producing biodiesel now from algae. The technology is very intriguing since the final product is something similar to oil, so it can be refined, transported, and consumed by our existing infrastructure.
Solazyme Produces Biofuel from Algae
Chevron has taken a stake in the company causing fears among the conspiracy theorists that big oil would quietly shelve to process to protect Chevron's oil interest. But Big Oil (tm) is in big trouble now. Most of the oil deposits are now out of reach of big oil companies and in the hands of state sponsored oil companies. Big oil should welcome processes like Solazyme's that will them to produce and deliver oil independent of foreign government's whims.
Another video clip here.