Viewed from a biofuels perspective, biological plants waste huge amounts of energy: they use sunlight to make cellulose, starch, lignin, and seeds, some of which can then be broken down and converted into fuels. A growing body of research is seeking to genetically engineer organisms to make liquid fuels directly. Organisms optimized in this way could theoretically be an order of magnitude more efficient than technologies that make fuels from biomass.

Joule Unlimited, a startup based in Cambridge, MA, is genetically altering photosynthetic microörganisms so that over their lifetime, they devote only 5 percent of the solar energy they absorb to growing and staying alive. The rest goes to secreting a steady supply of diesel fuel. The company, which is building a pilot plant in Leander, TX, says its process will generate 15 to 25 times as much fuel per acre as technology for making fuels from cellulosic biomass, but that it will take several years to demonstrate at a large scale. Synthetic Genomics, with funding from ExxonMobil that could exceed $300 million, is taking a similar approach, working with algae.

To replace all petroleum with biofuels, however, it might be necessary to genetically engineer organisms that get energy through potentially more efficient mechanisms. And the U.S. Department of Energy's Advanced Research Projects Agency-Energy (ARPA-E) is funding 13 projects that are engineering organisms to convert electricity and hydrogen--ideally from renewable sources--into liquid fuels for conventional cars.