One of Cobalt Biofuels' key advances is a technique for genetically engineering strains of Clostridium so that they produce a luminescent protein whenever they produce butanol. "When the Clostridium are happy and producing butanol, they're also producing light," Contag says. When they're paired with light detectors, the company can quickly sort through new strains of the bacteria, as well as tailor their environment, to increase production. The company has further increased butanol production by engineering a bioreactor in which biomass flows in, the bacteria processes it, and a mixture of primarily butanol and water flows out.

While increasing the amount of butanol produced can decrease costs, two other factors are also important: the consumption of energy, and the consumption of water. Cobalt Biofuels has reduced both of these by 75 percent. To reduce energy, the company has licensed a new technology, called vapor compression distillation, for separating the butanol and water. The addition of pressure to the distillation process, together with the use of an effective heat exchanger that reduces wasted heat, lowers energy consumption. To reduce water use, the company has turned to proprietary water purification and recycling systems.

Eventually, the company plans to produce butanol using waste from paper manufacturing and sugar refining, as well as other sources, and then sell it as a fuel additive for reducing carbon monoxide emissions. As Cobalt Biofuels scales up production, it plans to sell the butanol as a substitute for gasoline.