Other Solazyme strains are being produced for cosmetics and the company signed an agreement with Unilver to use its algae oil in consumer products.
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Many algae make oil, which they store as a foodstuff against an uncertain future.
Other firms are working on ways to break up the cells of oil-rich algae to get at the oil.
These algae produce more oil than they would in the sun, the company claims.
Solazyme, founded in 2003 and headquartered in South San Francisco, uses patented technology that allows algae to produce oil and biomaterials in standard fermentation facilities quickly, efficiently and on a large scale.
High oil-yielding strains of algae can be grown and dried and the oil extracted from the dry algal mass, before being similarly converted to biodiesel in a process called transesterification.
These algae now release their oil, which floats to the surface of the culture vessel.
Also, a recent study found that the DHA component of fish oil from algae helped people with minor memory impairment, but this needs to be replicated in order to be more definitive, he said.
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Algae typically do not produce oil under normal conditions, but they do when they are stressed.
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Sapphire Energy earlier this month began production of a drop-in replacement oil made from algae.
Biodiesel can be produced by extracting the oil from the algae cell.
Then its founders, Jonathan Wolfson and Harrison Dillon, asked themselves whether it might not be cheaper to ignore the photosynthetic step, buy the sugar that photosynthesis produces instead, and concentrate on getting the algae to turn it into oil.
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Biofuels made from algae can be produced in a way that make this energy source cost-competitive with crude oil by increasing the amount of energy algae stores as fat, according to early research from VG Energy, an alternative energy and agricultural biotech company.
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Sapphire Energy's answer is a form of "green crude oil" made from algae, which can be grown on non-agricultural land in shallow paddies full of undrinkable saline water.
The algae consume sugar and excrete crude oil.
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The research team are therefore also looking for a species of algae with a weaker cell wall and high oil content.
The sun is replaced by sugar, essentially, which is fed to the algae, which then produces different types of oil that can be processed into a variety of fuels, suitable for cars and planes.
The U.S. is experiencing a natural gas and oil drilling boom, but Congress still thinks algae and wind will power the future.
Nonetheless, there is a U.S. consortium, the National Algae Association, that is actively seeking a future in which algae are grown on a large scale and converted to oil-alternative fuels.
Another restraint on producing large quantities of algae is that its cell walls are difficult to break, making extraction of the oil inside an energy intensive process.
Algae vary considerably in their composition, and while some varieties contain around 50% of their weight of oil, others hold as little as 5%.
For all the hope and hype surrounding algae-based biofuels, producers like Solazyme are finding perhaps more success in selling their low-carbon oil for use in cosmetics, lubricants and food.
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Certainly, it is likely that algae will become an essential component of the mix of means to keep transportation going by means other than crude oil.
It is possible that the designer method can overcome some of the drawbacks involved with making fuel from algae, namely robustness and competitiveness of particular strains over other organisms, enhanced growth rate and yields of algal oil.
In both cases of new engines or biorefineries, there will be huge new engineering required on a scale that can only be guessed at if algae really can be exploited to make a nation the size of the United States independent of cheap imported crude oil.
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