Well this company called
http://solazyme.com/ makes stuff out of Algae!!! Ranging from fuel to even food from algae! But they use lots of strains of algae, to make what they want, for example if they were gona make fuel from them, they would use a specific one, they can even make gasoline to rocket fuel!!! Your probably thinking how they do this, well they put the algae in some fermenter, and just add some kind of substance that gives it raw energy, they were gona use sugar, but it cost's to much, but in minecraft we have to use sugar to make it. So anyways it turns out that algae dont need sun light, as long as they have some sort of energy. So in minecraft you will have to make a fermenter, then put that strain of algae into it, then add water, some eu, and sugar to it ever day, then it will make fuel or plastic.
To make food that's a different story, once you fermented that algae, you have to grind it in your macarator, then mix it with some stuff, thenn bake it. Or you can turn it into some energy drinks
To cross breed, just put 2 kinds of algae in the fermenter, and wait to ferment.