Algae soup: biofuels didn't work out so well the first time around. Will the next generation be better?

• Author: Rice-Oxley, Mark
• Position: SPECIAL REPORT

Think of it as a watercooler moment. Only the water in the balloon drum is not particularly cool. And its definitely not drinkable. For a start, the liquid is green. For another, it's teeming with carbon dioxide. And for a third, it's growing something slimy but precious that could promise a breakthrough in the quest for a sustainable, carbon-free motor fuel of the future: algae.

Call it algae alchemy, and if it's not a subject of conversation at a watercooler near you, then it's certainly become a talking point in laboratories and research centers of a dozen or more countries. This inauspicious organism is oily, feeds on carbon dioxide, and, unlike other crops cultivated for fuel, can take just a few days to grow. It's even the right color for a green revolution.

"It takes a matter of days to produce our harvest. With first-generation biofuel crops like corn, soy, and sugar cane it takes months," says Andy Beck, a former U.S. Energy Department public affairs chief who is now a vice president of the company PetroAlgae. At an eighteen-acre "farm" in Florida, PetroAlgae staff nurture the blooms through their brief life cycle: from green indoor tubes to watercooler-style drums and then on into small outdoor pools where the water is circulated by large paddles so the algae gets the right amount of light. The hope is that algae can be far more productive than edible crops for producing fuel--and use much less arable land. Beck sees a "very bright" future for this kind of renewable fuel.

Zip eastward across the Atlantic to a laboratory at Cambridge University, and Dr. Paul Dupree is no less enthusiastic about something equally unprepossessing: grass. Well, miscanthus grass, to be exact, a thick, hardy crop that could well end up in your tank someday. Dupree and his team are striving for an alchemy of their own: how to unlock the sugars in grasses and willow, which can then be fermented into ethanol.

The potential advantages, he says, are compelling: you don't need high-quality land, you don't need to use a lot of fuel to grow the crop, and you aren't using foodstuffs that might otherwise be used for human consumption. "You can harvest it each winter, you don't need to fertilize it, and you get good yields," he says.

A third promising type of crop being looked at is jatropha, a tropical bush whose seeds contain oil. It promises much because it can survive in harsh terrain not normally used for edible crops, and needs little fertilizer. Commercial plantations are springing up in the tropics on marginal land. In December last year, Air New Zealand successfully flew a Boeing 747 on a blend of jatropha and kerosene in one of the plane's engines.

Another and more controversial feedstock for second-generation biofuels involves forestry. Wood fibers are rich in cellulosic materials--as much as 50 percent in some cases--and companies in the U.S. and South America are already working on creating a biofuel feedstock from trees grown for that purpose. Not surprisingly, environmentalists are aghast at the...