ZeaChem is just one of a number of companies pursing cellulosic biofuel production. Warrenville, IL-based Coskata is also developing a hybrid thermochemical-biological process. Its feedstocks are first gasified under high temperatures, yielding synthesis gas, a mix of carbon monoxide and hydrogen. The synthesis gas is then digested by anaerobic bacteria that convert the gas directly to ethanol.

Wesley Bolsen, chief marketing officer for Coskata, says the company is getting yields of 100 gallons of ethanol for every ton of wood chips or carbon-equivalent feedstock at a pilot plant it recently opened in Madison, PA. "We can get one of the highest yields in the industry, and it's demonstrated yield, not theoretical yield," Bolsen says.

Mascoma, a cellulosic biofuels company based in Lebanon, NH, is pursuing an approach that uses genetically engineered microbes to simultaneously break cellulose into sugars and ferment the sugars into ethanol without the need for expensive enzymes. Michael Ladisch, chief technology officer for Mascoma, says its theoretical production limit is 100 gallons of fuel per ton of feedstock, but by having the microbes perform both tasks, the company has reduced cellulosic ethanol's production costs by 20 to 30 percent compared to conventional processes.

Mascoma is testing different engineered microbes at its pilot plant in Rome, NY, and Ladisch says the company plans to break ground on a commercial-scale facility in Kinross, MI, in the next year or two.

According to McMillan, all three approaches could play a role in future fuel production. "There is room for more than one winner here," he says. "If they can compete with the price of gasoline, then they can play."