It will take alot of land, but according to this one article algea gives yeilds of up to 10 000 gallons/acre. Even at half that, its an awful lot compared to some sources of biofuel. Here is an article where they say that, and it uses a brewery as the CO2 source:
Algae+brewery=biofuel article
And here is the video that I saw where I first heard about this type of thing
Algae Power