TECHNOLOGY FOCUS - BIOTECHNOLOGY - Preferred Method: The method (I) further comprises: adding a fatty acid alkyl ester to the combination before reacting; drying the feedstock prior to combining the feedstock with the alcohol and acid catalyst. In method (I): the pH is 2-3; temperature is 175-275 degrees C; and the pressure is at least 20 psig above the vapor pressure of the alcohol at the temperature of the reaction. The method (I) comprises: mixing the concentrated algal biomass with an amphiphilic solvent to result in a mixture; heating the mixture to form a dehydrated, defatted algal biomass; separating the amphiphilic solvent from the dehydrated, defatted algal biomass to result in amphiphilic solvent, water (160) and lipids, where the separation is carried out by filtration, settling or decanting; evaporating the amphiphilic solvent from the water and the lipids; and separating the water from the lipids by adding a nonpolar solvent. The method (II) further comprises: adding the fatty acid alkyl ester to the combination before reacting; separating the resulting fatty acid alkyl esters from the resulting cleaved cellulosic material; and fermenting the cleaved cellulosic material to produce ethanol. The mixture is heated: in a pressurized reactor (140), which is a batch or a continuous reactor; or with microwaves, ultrasound, steam or hot oil. Preferred Components: The feedstock comprises at least 10 wt.% cellulosic material and at least 10 wt.% proteins, based on the dry weight of the feedstock. The water content of the: combination before reaction is at least 3 wt.%; and feedstock after drying is 3-5 wt.% of the dry weight of the feedstock. The feedstock is algae and/or dried distillers grain. The alcohol is: methanol or ethanol; and present at 50-320% molar excess of the contained oil in the feedstock. The acid catalyst is: sulfuric acid; and present at 4-8 wt.% of the dry weight of the feedstock. The amphiphilic solvent is acetone, methanol, ethanol, isopropanol, butanone, dimethyl ether or propionaldehyde. The nonpolar solvent is propane, butane, pentane, hexane, butene, propene, naphtha or gasoline. EXAMPLE - Dry distillers grain (100 g), methanol (200 g) and sulfuric acid catalyst (8 g) were mixed and reacted at elevated temperature and pressure for 2 hours. The temperature was maintained at 200 degrees C and the initial pH was 0.5. After the reaction, the ester product mass was filtered and washed with additional alcohol to remove residual ester and sugars. The liquid fraction was heated to remove excess alcohol. The mixture was then neutralized to convert the free sulfuric acid to a neutral salt. The liquid containing the esters, glycerine, derivatized sugars, amino acids was treated in an additional separation stage to remove the ester fraction from the non-ester fraction (sugar, amino acid fraction) which was then neutralized and filtered. The ester fraction was treated in a distillation system to recover the fatty acid alkyl ester as a high grade material resulting in biodiesel fraction.