In the quest for affordable, non-food sources of biofuel, biologists are recruiting an unlikely ally: a bacterium that has historically been the bane of brewers.

The bacterium, Zymomonas mobilis, causes beer to spoil. But it also converts biomass such as switch grass and crop residues into ethanol faster and in larger quantities, cell for cell, than does yeast, the most widely used fermenting agent. It leaves less bacterial biomass at the end of the process. And it carries something yeast doesn't – an enzyme that gives it an ability to draw the nitrogen it needs as fertilizer directly from air, rather than from costly commercial supplements.

Now a team of biologists from Indiana University says it has provided unambiguous evidence that Z. mobilis actually can use simple nitrogen gas as a fertilizer – a matter of some dispute in recent years, even though researchers have known for decades that the bacterium had the biochemical tools to do so. And it does so without sacrificing the amount of ethanol it makes.

"It's a very weird bacterium," says James McKinlay, a microbiologist at Indiana University in Bloomington and the senior author of a formal report on the results of its experiments published Monday by the Proceedings of the National Academy of Sciences.

It takes the sugars present from the initial processing of plant residues and gives ethanol production priority over its own growth, he says.

The team's work is a small piece of a larger effort to move away from food crops such as corn as a source of biofuels and leave it for humans and livestock. So-called cellulosic ethanol from crop residue or woody plants has the potential to offer substantial reductions in CO2 emissions during the course of its production and use compared with gasoline or corn-based biofuels, researchers say.

One key need, however, is to drive down the cost of producing cellulosic ethanol. Most of that cost rests in the initial material used to feed the process, as well as in the interim step of breaking down the cellulose to release the sugars the bacteria can use.

Providing the nitrogen that bacteria need currently falls to a byproduct of corn milling known as corn steep liquor or to commercially made diammonium phosphate. The tab for these runs roughly $2 million a year for production facilities, Dr. McKinlay says.

"That's nothing to sneeze at," he adds. "It's a smaller cost, but something that can be addressed simply by using an organism that can use nitrogen gas, like Zymomonas."

Other hurdles need to fall before the bacterium is ready for prime time. For instance, in the wild, Z. mobilis converts a limited number of sugars compared with the number available after the cellulose-heavy plant material is processed for fermentation. Researchers have been looking for ways to engineer the bacterium to accept a broader range of these sugars.

In addition, much remains to be done to figure out the best ways to incorporate Z. mobilis into cost-effective production technologies.

The need to lower the cost of cellulosic ethanol is vital, says Wallace Tyner, an agriculture economist at Purdue University in West Lafayette, Ind. The US already produces more ethanol from all sources than it can use. Under federal law, the US Environmental Protection Agency sets an overall amount of cellulosic ethanol that refiners and importers must blend into their fuels, he explains.

But the law has an out. In effect refiners, blenders, and importers can buy their way out of meeting the cellulosic ethanol requirement by using either or both of two methods the law permits. If the price of cellulosic ethanol is too high compared with the wholesale price of gasoline plus the going price for these two methods, "You just buy out of your obligations," Dr. Tyner explains.

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On the other hand, with gasoline prices plunging and a cost of less than $1 a gallon for each of the two buyout mechanisms at the moment, cellulosic ethanol producers must sell their product for less than the cost of production to stay competitive with the combined cost of gasoline with the law's buyout approaches.

Little wonder that efforts are under way to look for cheaper approaches to making the ethanol. Adoption of Z. mobilis as the bacterium of choice alone won't save the day. But it could represent low-hanging fruit in the quest for cheaper cellulosic ethanol, McKinlay says.