Biofuel produced from algae, essentially pond scum, has long titillated green energy boosters as a potential big time player in the U.S. renewable fuels portfolio. Now, a-first-of-its-kind look at industrial-scale freshwater farming of algae suggests it could indeed make a sizeable dent in U.S. oil imports, but drain water resources.

Specifically, the U.S. could produce enough of the algae-derived fuel to eliminate 48 percent of the fuel it currently imports for transportation needs, according to researchers at the Department of Energy’s Pacific Northwest National Laboratory. But doing so would require 5.5 percent of the land area in the lower 48 states and consume about three times the water currently used to irrigate crops.

“The water use is significant,” Mark Wigmosta, a hydrologist at the lab who led the study, told me today.