Algaculture, from Wikipedia,
From 1978 to 1996, the U.S. National Renewable Energy Laboratory experimented with using algae as a biodiesel source in the “Aquatic Species Program”. [32] A recent paper from Michael Briggs, at the UNH Biodiesel Group, offers estimates for the realistic replacement of all vehicular fuel with biodiesel by utilizing algae that have a natural oil content greater than 50%, which Briggs suggests can be grown on algae ponds at wastewater treatment plants.[26] This oil-rich algae can then be extracted from the system and processed into biodiesel, with the dried remainder further reprocessed to create ethanol.
The production of algae to harvest oil for biodiesel has not yet been undertaken on a commercial scale, but feasibility studies have been conducted to arrive at the above yield estimate. In addition to its projected high yield, algaculture — unlike crop-based biofuels — does not entail a decrease in food production, since it requires neither farmland nor fresh water. Some companies[9][10] are pursuing algae bio-reactors for various purposes, including biodiesel production.
On May 11, 2006 the Aquaflow Bionomic Corporation in Marlborough, New Zealand announced that it had produced its first sample of bio-diesel fuel made from algae found in sewage ponds. [17] Unlike previous attempts, the algae was naturally grown in pond discharge from the Marlborough District Council’s sewage treatment works.
and:
http://engineering.suite101.com/blog.cfm/increasing_biofuel_efficiency

Much of this is exacerbated by the general loss of farmland to development, a process that’s been going on since before the 50′s.