Cheaper Cellulosic Ethanol

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The Q was first discovered in the lab of Susan Leschine, a professor of microbiology at the University of Massachusetts Amherst and Qteros's chief scientist. Leschine and her coworkers were studying microbes that were able to break down biomass in dark places without oxygen, such as at the bottom of lakes and in wet soil. "What was striking was that they were all pretty similar, except for one Q microbe, which was found in wet forest soil collected near the Quabbin Reservoir in Western Massachusetts," Leschine says.

The researchers discovered that the microbe could grow on many different plant components, which was very unusual, Leschine says. In 2005, the lab made the discovery that when it is given high concentrations of plant material, the microbe makes pure ethanol. "That was the 'aha' moment," she says.

Jattra Ventures, based in Amherst, MA, put together a business plan, negotiated an exclusive license for the technology, and lined up investors for the first round, launching the company as SunEthanol in 2006.

The company is now working to get the microbe to make more ethanol faster and to make higher concentrations of ethanol, Leschine says. This year, the team has already improved the microbe's productivity fifteenfold and is 60 to 70 percent of the way to reaching its technology targets for commercialization.

Qteros, like many other biofuels companies, faces plenty of challenges. Rick Kment, a biofuels analyst with DTN Research, says that capital is tough to coax out of today's risk-averse investors, especially for newer technologies. It doesn't help that gasoline prices have plunged, making it much harder for biofuels to compete.

Regulatory uncertainly is another challenge, Kment says. The national renewable fuels standard mandates that fuel producers use one billion gallons of cellulosic ethanol by 2013 and at least sixteen billion gallons by 2022. But with the current economy, changes could be coming, Kment says. "It could be a significantly different playing field a year from now," he says.