Is this actually the problem or is there other factors? A lot more is needed for 1kg of beef or certain crops.

I live in the tropics and water usage is just never an issue and if it was they'd actually store some of what falls from the sky. Truly doubt that water is the real bottleneck here.

edit: From the wiki page

    Among algal fuels' attractive characteristics are that they can be grown with minimal impact on fresh water resources, can be produced using saline and wastewater