Algae, as well as other biologically sourced feed stocks, has been the subject of a lot of research in oil production, for what should be obvious reasons. There are several things about using some bio-sources that concern me, however. Using food cropland to grow corn or soy intended for conversion to fuel, for one, resulting in less food production (and contributing to higher food prices).
The bio-sources that don't bother me in this way are things like manure or other waste to bio-fuel. Even wood waste and scrap paper can be turned into either oil or syngas (which can be turned into oil, among other things).
But, an interesting comment in a recent press release about oil from algae caught my eye: "byproduct stream of material containing phosphorus that can be recycled to grow more algae."