The present invention is a method for fermentation of algae or algaefaction method. The method includes feeding a hydrocarbon composition into a gasifier and pre-heating a biomass stream from a fermentation reactor. The biomass stream includes a liquid portion, a catalyst, and a biomass solids portion ranging between 15-92% by weight of the biomass stream. The biomass solids portion is algae or algal solids. The biomass stream is pre-heated to a temperature range between 200° F. and 500° F. Both the syngas and the pre-heated biomass stream are injected as a mixture into a reactor, where the mixture is separated into a gas component, liquid component, and solids component. The solids component is algal crude, which can be collected for processing as transportation fuels. The gas component is a lower temperature syngas, which can also be collected for processing as electricity or transportation fuels.