Biofuel yes, but the algae and alcohol and all others I've heard of so far don't seem to have this sort of efficiency. They aren't designed at the genetic level to actualy produce the fuel. And it seems much more efficient to have the bugs excrete the fuel rather than burning the algae.. I'm not sure how algae works but I don't think it would be as efficient a process, from aenergy in/energy out ratio.
The existing biofuel processes don't (as far as I recall) feed on a noxious compound either... This solution is outside the box compared to the classic biofuels. It does seem like it deserver the "4th gen" tag.
It probably does have its problems to be worked out, but so do algae and alcohol, hyrdrogen and all the others. They're on equal footing in that respect.
Ego-maniac or not, Venter's done a crap load of stuff for genomics. We're talking about this being ready in 2 years. At this rate the CO2 extraction problem will be fixed, if it can be, within a decade at most. This sets a precedent for any other bug-based solution for waste management and/or resource production; "anything we can imagine" as he says.
I don't see what being an ego-maniac has to do with any of that.
Re: the grey-goo risk, someone in the spotlight as he is couldn't get away with it. His track record doesn't support it either.. Like you say, you're frightened.. It doesn't sound like you actualy know enough facts to actualy say what the risks are in this specific case.