Biofuels are a controversial topic.  Some support switching to using natural gas (primarily methane), a substance that is in great abundance in America.  Others, particularly corn farmers and the U.S. Department of Agriculture suggest switching to an ethanol-based economy.  Still others advocate using sugar cane in more limited ethanol or biodiesel deployments.

All of these approaches, though, share fundamental inefficiencies -- they require a car engine redesign to full take advantage of them.  Modern dual mode vehicles can lose 15 percent or more efficiency.

Houston, Texas-based Terrabon believes they have the answer.  They have refined and improved on a Texas A&M University acid fermentation called MixAlco, which can convert "anything that rots" (including lawn waste) into a gasoline-like substance.  The company has built a $3.5M USD Energy Independence I facility to test the process.  Malcolm McNeill, Terrabon’s chief financial officer states, "One of the reasons we built this was to find out what we didn’t know."

By the end of the summer the facility will be using chopped sorghum (a fast growing plant), to produce 300 gallons per day (7.14 barrels of gas).  While that might not seem like much, that's over 2,500 barrels of gasoline over the next year. 

Terrabon plans to soon open a larger plant in Port Arthur, Texas, with the help of San Antonio’s Valero Energy Corp.  The company believes it can produce $1.75/gallon gas at the facility.

The company's plans are boosted by the 2007 Energy Law, signed by President Bush, which promises 36 billion gallons of biofuels to be used by 2022.  Oil from algae and processes like Terrabon's seems the most promising mid-term solution (along with cellulosic ethanol).  However, the company still faces tough challenges ahead as the ethanol industry is the favorite child of the biofuels world.  Despite its significant detractions, ethanol has won significant political support and receives large tax breaks and other incentives. 

Companies like Terrabon, meanwhile enjoy some federal support, but to a lesser extent.  They have to pursue their own funding, much more aggressively.  Fortunately, that's exactly what they're doing.