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In 2004, Iogen, a Canadian biotechnology company based in Ottawa, began selling modest amounts of cellulosic ethanol, made using common wheat straw as feedstock and a tropical fungus genetically enhanced to hyperproduce its cellulose-digesting enzymes. But Iogen estimates that its first full-scale commercial plant, for which it hopes to break ground in 2007, will cost $300 million – five times the cost of a conventional corn-fed ethanol facility of similar size.

The more one can fiddle with the ethanol-producing microbes to reduce the number of steps in the conversion process, the lower costs will be, and the sooner cellulosic ethanol will become commercially competitive. In conventional production, for instance, ethanol has to be continually removed from fermentation reactors, because the yeasts cannot tolerate too much of it. MIT’s Greg Stephanopoulos, a professor of chemical engineering, has developed a yeast that can tolerate 50 percent more ethanol. But, he says, such genetic engineering involves more than just splicing in a gene or two. “The question isn’t whether we can make an organism that makes ethanol,” says Stephanopoulos. “It’s how we can engineer a whole network of reactions to convert different sugars into ethanol at high yields and productivities. Ethanol tolerance is a property of the system, not a single gene. If we want to increase the overall yield, we have to manipulate many genes at the same time.”

The ideal organism would do it all – break down cellulose like a bacterium, ferment sugar like a yeast, tolerate high concentrations of ethanol, and devote most of its metabolic resources to producing just ethanol. There are two strategies for creating such an all-purpose bug. One is to modify an existing microbe by adding desired genetic pathways from other organisms and “knocking out” undesirable ones; the other is to start with the clean slate of a stripped-down synthetic cell and build a custom genome almost from scratch.

Lee Lynd, an engineering professor at Dartmouth University, is betting on the first approach. He and his colleagues want to collapse the many biologically mediated steps involved in ethanol production into one. “This is a potentially game-changing breakthrough in low-cost processing of cellulosic biomass,” he says. The strategy could involve either modifying an organism that naturally metabolizes cellulose so that it produces high yields of ethanol, or engineering a natural ethanol producer so that it metabolizes cellulose.

This May, Lynd and his colleagues reported advances on both fronts. A team from the University of Stellenbosch in South Africa that had collaborated with Lynd announced that it had designed a yeast that can survive on cellulose alone, breaking down the complex molecules and fermenting the resultant simple sugars into ethanol. At the same time, Lynd’s group reported engineering a “thermophilic” bacterium – one that naturally lives in high-temperature environments – whose only fermentation product is ethanol. Other organisms have been engineered to perform similar sleights of hand at normal temperatures, but Lynd’s recombinant microbe does so at the high temperatures where commercial cellulases work best. “We’re much closer to commercial use than people think,” says Lynd, who is commercializing advanced ethanol technology at Mascoma, a startup in Cambridge, MA.

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