Ottawa Sweet Fuel Alternative

It may seem hard to believe that microscopic bugs usually viewed as destructive pests can be so productive. But scientists and several companies are working with the creatures to convert wood, corn stalks and other plant waste into sugars that are easily brewed into ethanol -- essentially 199-proof moonshine that can be used to power automobiles.

Thanks to biotech breakthroughs, supporters of alternative energy sources say that after decades of unfulfilled promise and billions in government corn subsidies, energy companies may be able to produce ethanol easily and inexpensively.

"The process is like making grain alcohol, or brewing beer, but on a much bigger scale," said Nathanael Greene, an analyst with the environmental non-profit Natural Resources Defence Council. "The technologies are out there to do this, but we need to convince the public this is real and not just a science project."

TECHNOLOGICAL HURDLES

Using microbes may even solve a growing dilemma over the current ethanol manufacturing process, which relies almost exclusively on corn kernels, a concern throughout the Midwestern corn belt that the 95 U.S. ethanol plants are increasingly poaching corn meant for the dinner table or livestock feed.

The idea mentioned by Bush during this year's State of the Union speech -- called "cellulosic ethanol" -- skirts that problem because it makes fuel from farm waste such as straw, corn stalks and other inedible agricultural leftovers. Cellulose is the woody stuff found in branches and stems that makes plants hard.

Breaking cellulose into sugar to spin straw into ethanol has been studied for at least 50 years. But the technological hurdles and costs have been so daunting that most ethanol producers have relied on heavy government subsidies to squeeze fuel from corn.

Researchers are now exploring various ways to exploit microbes, the one-cell creatures that serve as the first link of life's food chain. One company uses the microbe itself to make ethanol. Others are taking the genes that make the waste-to-fuel enzymes and splicing them into common bacteria. What's more, a new breed of "synthetic biologists" is trying to produce the necessary enzymes by creating entirely new life forms through DNA.

Bush's endorsement of the waste-to-energy technology has renewed interest in actually supplanting fossil fuels as a dominant energy source -- a goal long dismissed as a pipe dream.

"We have been at this for 25 years and we had hoped to be in commercial production by now," said Jeff Passmore, executive VP at Ottawa ethanol-maker Iogen Inc. "What the president has done is -- perhaps -- put some wind in the sails."

$40M FACTORY

Iogen is already producing ethanol by exploiting the destructive nature of the fungus Trichoderma reesei, which caused the "jungle rot" of tents and uniforms in the Pacific theatre during World War II.

Through a genetic modification known as directed evolution, Iogen has souped up fungus microbes so they spew copious amounts of digestive enzymes to break down straw into sugars. From there, a simple fermentation -- which brewers have been doing for centuries -- turns sugar into alcohol.

Iogen opened a small, $40-million US factory in 2004 to show it can produce cellulosic ethanol in commercial quantities. In the last two years, it has produced ethanol that is blended with 85% gasoline to fuel about three dozen company and Canadian government vehicles.

Oil giant Royal Dutch Shell PLC has invested $40 million US for a 30% ownership stake in Iogen; Petro-Canada and the Canadian government are also investors.

Now the company is ready to build a $350-million US, commercial-scale factory in Canada or Idaho Falls, Idaho, next year if it can secure financing -- long one of the biggest stumbling blocks to bringing the stuff to gas pumps.

While conventional lenders are wary of investing in a new technology, the company is banking on winning a loan from the U.S. Department of Energy. Even under a best-case scenario, Passmore said Iogen won't be producing commercial quantities until 2009.

Other significant hurdles include how to widely distribute the fuel; getting auto manufacturers to make engines that will use it; and persuading gas stations to install ethanol pumps. There's hope that funding shortfalls and the remaining technological problems such as how to ship large amounts of ethanol will be overcome in the next few years.

Despite the challenges, Bush's endorsement and advancements in the field have re-energized alternative energy types.