Bugs the missing link to ending oil addiction?

Fungus put to work
Ottawa-based 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 theater 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 factory in 2004 to show it can produce cellulosic ethanol in commercial quantities. In the last two years, it has produced 65,000 gallons of ethanol that is blended with 85 percent gasoline to fuel about three dozen company and Canadian government vehicles. Oil giant Royal Dutch Shell PLC has invested $40 million for a 30 percent ownership stake in Iogen; Petro-Canada and the Canadian government are also investors.

Now the company is ready to build a $350 million, 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.

Hurdles include infrastructure
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.

While no commercial interest has advanced as far as Iogen, other biotech companies are engineering bacteria to spit out similar sugar-converting enzymes, and academics are pursuing more far-out sources.

At the California Institute of Technology, Jared Leadbetter is mining the guts of termites for possible tools to turn wood chips into ethanol. Leadbetter said there are some 200 microbes that live in termite bellies that help the household pest convert wood to energy.

Those microbes or their genetic material can be used to produce ethanol-making enzymes. So scientists at the Energy Department’s Joint Genome Institute in Walnut Creek, Calif., are now sequencing the microbe genes in hopes of finding a key to ethanol production.

“We have this idea that microbes are pests,” said Leadbetter, who has been studying termite guts for 15 years. “But most microbes are beneficial.”

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