Algae have significant potential compared to other biomass feedstocks to supplement current transportation fossil fuel usage. To determine the acceptability of algal biodiesel as a replacement for petroleum, a life cycle analysis (LCA) with parameters of aerial productivity, culturing, CO2 mitigation, water use, nutrient loading, biomass harvesting, lipid extraction, and energy conversion was explored on algae production in Louisiana. High and low energy estimates found in several published LCAs were compared to current realistic estimates and analyses completed by the authors. Considering a system with an aerial biomass productivity of 15 g/m2/day and cell lipid concentration of 20%, the energy inputs exceeded the outputs from biodiesel production by 53% under the most ideal conditions. However, slight increases in biomass productivities and lipid contents are anticipated to tilt the overall energy balance more favorably. Considering the current conservative estimates (for biomass productivity and lipid content), incorporation of value added processes such as wastewater treatment and biogas production from residual biomass, could improve the sustainability of the system, allowing it to potentially achieve a 13.2% energy surplus.