In response to many comments questioning the exact process(es) used to convert algae into fuel, I would like to further elaborate on these steps.
There are several processes that are under development that can potentially end our dependence on fossil fuels and open the world of algal biofuels to real progress and growth. The first of these processes is referred to as cracking or dry distillation. It is a form of pyrolysis, which is the breakdown of organic materials by pressurizing and heating them without the presence of oxygen. This process separates the gas, liquid, and solids within the algae and produces a crude oil.
Another method is one that does not kill the algae, but instead heats it and causes the naturally occurring ethanol to evaporate out. This evaporating ethanol is collected (similarly to the process of desalinization of seawater) and condensed to produce liquid ethanol.
All the various companies that are investing in algal biofuel are developing many similar processes. Each wants to create the most efficient method at the lowest cost to maximize profit and produce the most reliable product. Nevertheless, most processes are similar; they usually use pressure and heat in some combination to separate the liquid oil from the solids. This oil can then be refined, similar to the way fossil fuels are refined, and can then be used as jet fuel, gas, diesel fuel, etc. The possibilities are seemingly endless and the benefits for the usage of algal biofuels are obvious. There is no doubt that we will eventually depend on alternative energy and I believe algae will be a very large part of this new, cleaner energy.