The energy giant BP and Martek Biosciences, a Maryland based company that uses micro algae to produce oil-based nutritional and dietary supplements, signed a Joint Development Agreement (JDA) earlier this month to produce microbial oils for biofuels applications.

Under this agreement, BP will provide the cash — up to $10 million for just the first phase — and Martek will provide the research expertise in algae fermentation technology. The idea is to develop a cost effective method of converting basic sugars derived from biomass into lipids, or microbial oils, with fermentation microorganisms. Chemical and thermocatalytic processes would then convert the oils into various types of biofuels.

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Those cute little creatures shown in the video are represent what may be the future of carbon sequestration.

CARS is the acronym for Carbon Algae Recycling System, it’s a system under development in Canada to clean up tailing ponds and greenhouse gas emissions left by the Alberta Tar Sands project.

As the video shows, exhaust CO2 is pumped into algae-rich tailing ponds where it’s digested. The plumped-out algae, full of hydrocarbons and heavy metals, are harvested and turned into biofuels.

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