In our model, our starting strain, with characteristics in brackets, has a break-even price of US$21.33. Significant improvements in all factors (blue) or exceptional improvements in all factors (pink) have break-even prices of US$4.23 or US$1.58 before co-products are considered. Our model consists of seven major factors: 1) annual maintenance costs: this includes personnel, land taxes, fertilizer costs, upkeep, water and power; 2) harvesting costs: this cost is incurred every time algae reaches harvesting stage which is a function of growth rate, and maximum growth density (it includes costs for water extraction, oil extraction and oil transport from harvest site to sales destination); 3) pond depth: this is how deep the ponds can be made while the algae still maintain optimal growth rates. The remaining four are characteristics of the algae; 4) lipid content; 5) growth rate; 6) maximum growth density; 7) marketable co-products produced by the algae. Based on our analysis, improvements in all seven factors are required for algae to come close to competitive with petroleum. Maximizing the last four characteristics require good crop protection, stressing the importance of developments in this field before the large capital investment required to build full scale algae biofuel farms. It is important to note this economic model does not include the initial capital costs to build the initial farms.