U.S. land and water resources could support the growth of enough algae to produce up to 25 billion gallons of algae-based fuel a year, researchers say.

Algae contain significant amounts of oil, and several research teams and companies are pursuing ways to improve the creation of biofuels based on algae, based on its chief requirements of sunlight and water, U.S. Department of Energy researchers reported Tuesday.

They said their analysis suggested the Gulf Coast and the Southeastern Seaboard -- hot, humid and wet -- were especially favorable regions for algae growth.

"While there are many details still to be worked out, we don't see water issues as a deal breaker for the development of an algae biofuels industry in many areas of the country," study author Erik Venteris of the energy department's Pacific Northwest National Laboratory in Richland, Wash., said.

Oil based on algae has the potential to replace a significant portion of the nation's oil imports, researchers said, and the United States has regions well suited to such production.

"The Gulf Coast offers a good combination of warm temperatures, low evaporation, access to an abundance of water and plenty of fuel-processing facilities," hydrologist Mark Wigmosta, the leader of the team that did the analysis, said.

"I'm confident that algal biofuels can be part of the solution to our energy needs, but algal biofuels certainly aren't the whole solution," he said.

The researchers said they estimated 25 billion gallons of algal oil produced in a year would be enough to fill the nation's current oil needs for one month, about 600 million barrels.