SAN DIEGO -- The San Diego Center for Algae Biotechnology announced a regional partnership with the city and the University of California, San Diego Tuesday for developing fuel from algae.

Mayor Jerry Sanders said San Diego, home to more than 500 biotechnology companies, could become a major center for renewable energy.

"San Diego has a unique combination of life science research institutions, biotechnology companies and venture capital support to lead the nation in the development of this environmentally friendly source of transportation fuel," he said. "As the algal biofuel industry develops, we are confident that San Diego will become a major center for renewable energy development."

UCSD Chancellor Marye Anne Fox said she hoped the partnership would make sustainable algae-based fuel production a reality in the next five to 10 years.

"This consortium will strengthen our ability to obtain grants and attract resources to the area," Fox said. "Algal biofuels will allow us to reduce our dependence on fossil fuels and other economies and will provide opportunities for a new economy and workforce."

According to a San Diego Association of Governments study cited by UCSD, research into algal biofuels already has a $63 million economic impact in the region and employs 513 people.

Various fuels can be made from algae, including a kind of biodiesel and butanol, which is similar to gasoline. On Jan. 8, Continental Airlines successfully tested a twin-engine jet that burned a 50-50 blend of traditional jet fuel and biofuel derived from algae.

Algae grows faster than some other food crops used for producing biofuels -- it also takes in carbon-dioxide and gives off oxygen -- and contains a high percentage of combustible oils.