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Here’s an update on a project at an ethanol plant in Iowa (one of your neighbor states) funded in part by the Iowa Office of Energy Independence. I don’t know if they are simply growing the stuff or harvesting it as well. If they're only growing and not harvesting, it may not be tremendously useful. On the other hand, a successful farming operation could have harvesting technology, such as MBD is putting together with OOIL’s help, plugged in to it. But anyway, this is an example of a state government providing funding to move the process forward. Maybe you're aware of it.

http://www.ethanolproducer.com/articles/7454/algae-project-advances-at-gpre-plant

Algae project advances at GPRE plant
By Kris Bevill | February 02, 2011

BioProcess Algae LLC has begun operating commercial-scale algae bioreactors at Green Plains Renewable Energy Inc.’s 65 MMgy ethanol plant in Shenandoah, Iowa. The project is a joint venture among GPRE, BioProcessH20 LLC, a division of Tennessee-based water filtration company Clarcor Inc., and international renewable energy investment group NTR plc.

This is the second phase of a project designed to utilize waste products at ethanol facilities such as waste water, CO2 and waste heat along with sunlight and nutrients to produce algae that can in turn be used to produce saleable coproducts such as biodiesel and animal feed. The $11.5 million project has received $4 million in financial assistance from the state of Iowa—$2 million for each phase of the project. Phase I was deployed in October 2009 and consisted of operating small-scale bioreactors continuously for one year. The trademarked Grower Harvester bioreactors used for Phase II are 20 times larger than the Phase I bioreactors and are horizontal and vertical, whereas the Phase I reactors were only vertical reactors.

“After achieving 100 percent uptime in Phase I of the project and exceeding productivity targets at varying harvest intervals, we are excited to have Phase II of this project deployed and fully functional,” BioProcess Algae CEO Tim Burns said. “Our goal for Phase II is to satisfactorily demonstrate the commercial viability of our technology. We plan to utilize third-party verification for productivity, harvest densities and product value concerning lipid content and composition.”

GPRE CEO Todd Becker said the goal of the project is to manufacture feedstock. “We’re focused on acting as a farmer in the process,” he said. “There’s a lot of money being deployed into using algae for fuels and things like that. We wanted to focus first on making sure we had the feedstock.”

A report issued in December by the Iowa Office of Energy Independence stated that BioProcess Algae plans to identify what natural algae can be used in Iowa’s climate and verify that it can produce continuously at a level in excess of 200 tons per acre per year. At that level of production, a 50 MMgy ethanol plant could be expected to churn out enough algal oil to produce 5.8 MMgy of biodiesel and 51,000 tons of high-protein meal product annually.

Once the algae production process is validated and ready for distribution, BioProcess Algae will seek to license the technology to existing ethanol producers. It also plans to break ground on its first commercial algae farm, integrated with an existing ethanol facility, next year. Iowa’s Office of Energy Independence stated that the company expects to create up to 10 commercial algae farms in Iowa by the end of 2015.