The term third generation biofuel has only recently enter the mainstream it refers to biofuel derived from algae. Previously, algae were lumped in with second generation biofuels. However, when it became apparent that algae are capable of much higher yields with lower resource inputs than other feedstock, many suggested that they be moved to their own category. As we will demonstrate, algae provide a number of advantages, but at least one major shortcoming that has prevented them from becoming a runaway success.