The thing about algae is it loves sewage and industrial waste, so the water doesn't have to be drinking water, sludge and slime works just as well. That's the added bonus, we can reduce waste while creating fuel, and the by products of the algae can be dumped back in so that their buddies can feast on their rotting remains also.
Open-air ponds of sewage -- YUMM !
Actually, the most beneficial way to increase algae yields is by CO2 enhancement. There are other companies that are taking that route -- approaching coal-powered electrical plants to utilize adjacent property and feed their smokestack output through algae growths. The ones I saw involved clear plastic tubes lying on the ground where the water and CO2 levels were maintained just right to produce 6x the algae growth of open-air ponds.
This seems like a cheap and effective way to grow algae. Suppose you take cheap plastic tubing about 12 inches in diameter and keep an over-pressure of CO2 and air in it so it stays "inflated" while the algae grows. String it out across the ground and the greenhouse effect of the contained system along with the residual heat of the smokestack CO2 would allow growth anywhere, not just desert sun. Then you just reel in the tubing and squeeze the algae and water out like toothpaste into your processing plant for producing bio-diesel and ethanol, and send the water back into the system with minimal new water needed.