July 31, 2011 -- Genetically modified blue and green algae could be the answer to the world's fuel problems. Bioengineers have already developed algae that produce ethanol, oil and even diesel -- and the only things the organisms need are sunlight, CO2 and seawater.

Biochemist Dan Robertson's living gas stations have the dark-green shimmer of oak leaves and are as tiny as E. coli bacteria. Their genetic material has been fine-tuned by human hands. When light passes through their outer layer, they excrete droplets of fuel.

"We had to fool the organism into doing what I wanted it to do," says Robertson, the head of research at the US biotech firm Joule Unlimited. He proudly waves a test tube filled with a green liquid. The businesslike biochemist works in a plain, functional building on Life Sciences Square in Cambridge, Massachusetts.

His laboratory is sparsely furnished and the ceiling is crumbling. Nevertheless, something miraculous is happening in the lab, where Robertson and his colleagues are working on nothing less than solving the world's energy problem. They have already created blue algae that produce diesel fuel.

Scientists rave about a new, green revolution. Using genetic engineering and sophisticated breeding and selection methods, biochemists, mainly working in the United States, are transforming blue and green algae into tiny factories for oil, ethanol and diesel. Betting Millions on Algae

A green algae liquid sloshes back and forth in culture vats and circulates through shiny bioreactors and bulging plastic tubes. The first tests of algae-based fuels are already being conducted in automobiles, ships and aircraft. Investors like the Rockefeller family and Microsoft founder Bill Gates are betting millions on the power of the green soup. "Commercial production of crude oil from algae is the most obvious and most economical possible way to substitute petroleum," says Jason Pyle of the California-based firm Sapphire Energy, which is already using algae to produce crude oil.

The established oil industry is also getting into the business. "Oils from algae hold significant potential as economically viable, low-emission transportation fuels and could become a critical new energy source," says Emil Jacobs, vice president of research and development at Exxon Mobil. The oil company is investing $600 million (€420 million) in genetic entrepreneur Craig Venter's firm Synthetic Genomics.

The technology holds considerable promise. Indeed, whoever manages to be the first to sell ecologically sustainable and climate-neutral biofuel at competitive prices will not only rake in billions, but will also write history.

Do-it-yourself diesel barons launched the biofuel industry decades ago when they used old French-fry grease to fuel modest agricultural machines. Today, hundreds of thousands of cars run on ethanol derived from grain. In the United States, for example, more than 40 percent of gasoline contains ethanol additive. The fuel is produced in huge fermenters the size of blimps, by fermenting a mash of corn or rye with yeast.

But ethanol as a biofuel has a bad reputation. One hectare (2.47 acres) of corn produces less than 4,000 liters of ethanol a year, and 8,000 liters of water are required to produce a liter of ethanol. Besides, crops grown for ethanol take away valuable farmland for food production. The last growing season marked the first time US farmers harvested more corn for ethanol production than for use as animal feed. One of the adverse consequences of the biofuel boom is that it is driving up food prices.

Astonishingly Productive

For this reason, many environmentalists now believe that growing energy plants is the wrong approach. Algae, on the other hand, do not require any farmland. Sun, saltwater, a little fertilizer and carbon dioxide are all the undemanding little organisms need to thrive. And because they consume about as much CO2 during photosynthesis as is later released when the oil they produce is burned, algae-based fuels are also climate neutral.

Algae are also astonishingly productive. A hectare of sunny desert covered with algae vats can yield almost eight times as much biofuel per unit of biomass in a year than corn grown for energy purposes.

Sapphire is one of the pioneers of the industry. CEO Pyle has a vision of transforming desert areas into fertile, energy-producing land. "We have to grow algae like rice, in shallow patties of water on thousands of hectares," he says. This, he says, is the only way to produce algae-based oil in large quantities and at competitive prices.

Sapphire expects one barrel of its green petroleum to cost between $70 and $100 in the future, which is significantly cheaper than petroleum. However, as with grain production, this requires the use of high-performance varieties. According to Pyle, his company has optimized the yield, resistance to disease and "harvest capability" of the green algae it uses. Sapphire's engineers are already testing their green miracle algae at a small plant in New Mexico. Together with Monsanto, which produces agricultural chemicals, and industrial gas company Linde, the algae makers plan to explore commercial opportunities at a 120-hectare site soon.

'We Simply Have to Build It'

But the Sapphire algae can only be a beginning, because they merely enrich the oil internally. To obtain the oil, the algae must be harvested and the oil extracted in a costly and complex process.

To overcome this obstacle, other scientists are developing algae that don't even have to be harvested. Instead, they essentially ooze the fuel of the future. Evolution has not yielded anything that produces biofuel from CO2 on a large scale, explains biologist Venter, "which is why we simply have to build it."

The first of these miracle organisms can already be admired in the Joule laboratory. The bioengineers' tools include culture mediums, incubators and, most importantly, databases containing the DNA sequences of thousands of microorganisms. Robertson and his team search the databases for promising gene fragments, which they then isolate and inject into the genetic material of blue algae.

'You Could Put Our Product in Your Car'

Dozens of varieties of the microorganisms, also known as cyanobacteria, bob up and down in bulbous beakers at Joule. A green brew fills small photobioreactors, which are used to test the blue algae under various environmental conditions. "Here we simulate for example the day-and-night rhythm of Texas," says Robinson, explaining one of the experiments. The company has a pilot plant in Texas.

The program is as complex as it is costly. Nevertheless, success appears to be proving the genetic engineers right. The microbiologists at Joule have created blue algae strains that pump so-called alkanes outward through their membranes. Alkanes are energy-rich hydrocarbons contained in diesel fuel. "You have to persuade the cell that it stops growing and makes the product of interest and does it continuously," Robinson explains. In contrast to ethanol, the end product is not a low-quality fuel, but a highly pure product that contains no sulfur or benzene. "You could put our product in your car," says Robinson.

The laboratory algae are now doing their work in high-tech bioreactors, where carbon dioxide is constantly bubbling through shimmering green panels that look like solar collectors. Robertson's ultimate goal is to derive about 140,000 liters of biofuel a year from one hectare of land -- a yield 40 times as high as with corn grown for ethanol. Joule has bought about 500 hectares of desert land in New Mexico to build a first commercial plant.

Large Amounts of CO2 Required

But will the laboratory creations really work as well in open fields as they do in the lab? Calculations show that some algae plants will likely consume more fertilizer and energy per hectare than grain crops. And the carbon dioxide in the air won't be enough to feed the microalgae. Scientists estimate that a commercial algae fuel plant would require about 10,000 cubic meters of CO2 a day. Whether and how large amounts of the gas could be derived from the exhaust gases of large coal power plants, for example, and then brought to the algae farms, remains unclear.

The farms could also require enormous tracts of land. In a recent article in the journal Science, researchers at Wageningen University in the Netherlands calculated that, in theory, an area the size of Portugal would have to be filled with algae pools to satisfy Europe's current fuel needs. A "leap in microalgae technology" is needed to at least triple productivity, say experts.

Pyle and Robertson are convinced that this increase is possible. They insist that algae technology can be used to meet a significant portion of our energy requirements in the future. "There is certainly enough non-arable land with enough solar radiation and enough CO2 and water sourcing in the world," says Robertson. Another important advantage, he adds, is that algae-based fuel could easily be pumped into the oil industry's existing pipelines and refineries, and that cars and aircraft would not have to be modified to accommodate the biofuel.

But even the pioneers admit that the switch to algae-based fuel will likely take a while longer. Sometimes completely mundane things still stand in the way of the green revolution.

The algae growers at Sapphire, for example, face competition from little 10-legged creatures. "Shrimp think algae are good food," says CEO Pyle. "If you don't pay attention, you will ultimately have a shrimp farm." Translated from the German by Christopher Sultan