The biofuel industry has had a bumpy few years: Ethanol is still a Department of Energy golden child, but recent studies raise serious questions about its viability. Production could eat up half of America’s corn crop this year, potentially causing food shortages, and some say that ethanol manufacturing uses more energy than it produces. What’s more, the fuel’s corrosiveness makes it unsuitable for distribution via existing petroleum pipelines. But two new biotech companies believe biofuels can leapfrog past these problems, and they’re each engineering fuels that are virtually identical to the gasoline and diesel we use today.

“We said, ‘What does nature make that looks like a fuel?’” explains Kinkead Reiling, cofounder of Amyris Biotechnologies in Emeryville, California. Every living organism efficiently converts sugar from food into fat to store energy, and fats are chemically similar to the hydrocarbons that make up fuels. So by tinkering with a few genes, scientists at Amyris and San Carlos, California, biotech firm LS9 have designed bacteria that eat almost any type of plant—mostly sugarcane, corn, and other forms of cellulose—digest it, and convert it into “fuel."

The companies’ plans are feasible because of how quickly and cheaply scientists can now sequence and synthesize genes. It took thirteen years and $3 billion to order the first human genome, but last year, Nobel Laureate James Watson had his own sequenced in two months for less than $1 million. Amyris and LS9 isolated and arranged the genes necessary to make petroleum-like fuels in 2005 and 2007, respectively, and introduced those genes into bacteria, creating billions of live biofuel factories for a fraction of what it would have cost five years earlier. “Because we have this genetic control over the organisms, we can really tailor the set of molecules that come out the other side,” says Greg Pal, LS9’s senior director of corporate development.

Amyris and LS9 are producing fuels that are slightly different from one another. Amyris is making gasoline and diesel similar enough to conventional forms that they can be pumped through existing pipelines and directly into cars. In doing so, the company, which raised $20 million in 2006 and another $70 million last year, could bypass one of biofuel’s biggest problems in the short term: distribution.

Whereas Amyris is creating a product similar to conventional refined fuels, LS9 is touting the real deal. “If you took all the constraints off, what would you make?” Pal asks. The answer: crude oil. LS9, which secured $15 million in phase two funding last year and was recognized by the World Economic Forum as one of the 39 Technology Pioneers of 2008, is engineering bacteria to make crude that can be shipped directly to refineries.

Conventional crude oil can contain thousands of types of molecules—that’s why it’s called “crude”—but LS9’s will have only about ten, which Pal says is ideal: The company’s oil will have the molecular diversity necessary to make a number of fuels and petroleum products but will be free of unwanted chemicals that can muck up engines. It’s “a pretty optimal solution,” he says.

The magic year for both companies is 2011, when LS9 expects its crude oil to be in full-scale production, and Amyris’ diesel, which solidifies at a lower temperature than vegetable-oil biodiesel, should come to market, too. Amyris’ jet fuel and gasoline and an LS9 biodiesel will follow several years later.

What’s so green about fuels practically identical to conventional ones? The answer lies in how they’re made. These newer biodiesels start out as plants that suck carbon dioxide out of the air, so burning them releases little, if any, net CO2—it’s a closed loop, Pal argues. LS9 estimates that its bacteria produce 90 BTUs of fuel for every 100 BTUs of sugar they eat. And although genetically engineered, the bacteria are not producing something completely synthetic. “The molecules we’re creating are made in nature by plants and organisms,” Reiling says. “We’re just changing the setting in which they’re made.”

Story by Melinda Wenner. This article appeared in "Plenty" in May 2008.

Copyright Environ Press 2008