Global warming and the growing demand for energy and water have spurred efforts to identify carbon neutral transportation fuels. Microalgae are the only lipid-rich biomass capable of offsetting a significant portion of fossil fuel use due to their high photosynthetic efficiency, capacity to grow on saltwater and wastes, and ability to capture CO2 from industrial flue gases. Consequently, recent interest in this energy crop for biodiesel production has skyrocketed, but commercial-scale production remains hindered by the ability to convert algae into liquid fuel at a price competitive with petroleum. Unfortunately, nearly all reported values of algal lipid productivity are based on classic, solvent-intensive extractions which produce hazardous organic wastes and require drying the algae biomass. Identifying algae-to-energy pathways which are net-energy positive, cost competitive, and environmentally sensitive will be crucial to developing this unparalleled biofuel resource. Combining this knowledge with life-cycle analyses of the entire algae-to-energy pathway, we have identified potentially transformative processes for synthesizing inexpensive biofuels from algae.