Genomicist Craig Venter and his company Synthetic Genomics Incorporated (SGI) have entered into a $600m strategic alliance with Exxon Mobil to develop a next-generation biofuel from photosynthetic algae. Algae absorb carbon dioxide and sunlight in aqueous environments, producing an oil of similar molecular structure to contemporary petroleum products. Algal fuel can be refined, transported and distributed using existing refineries, pipelines and service stations and can run the engines of today’s automobiles and airplanes.

Venter, who is best known for his role in sequencing the human genome, said the new partnership was the largest single investment in trying to produce biofuels from algae but said the challenge to creating a viable next-generation fuel was the ability to produce it in large volumes. “This would not happen without the oil industry stepping up and taking part,” he said.

Several advantages of algae over traditional biofuels are that algae produce significantly higher amounts of oil and biomass, aid environmental remediation through the absorption of atmospheric carbon dioxide and do not force the polemical tradeoff of food for fuel by occupying agricultural lands. For more on Craig Venter’s genomic projects, check out his talks on DNA and the sea and creating synthetic life on TED.com.