With a little help from genetic engineering, researchers at one Massachusetts company say they've created an organism that takes sunlight, water and carbon dioxide and creates liquid fuel.

Bill Sims, CEO of Cambridge-based Joule Unlimited, says the process utilizes a bacteria, produces a chemical product and secretes it. The result? A fuel that can fill demands for diesel and ethanol.

"The product that we make is diesel. It's very high cetane to very premium diesel. It is fungible, so it's infrastructure compatible," said Sims.

The product can be used in trucks, heavy equipment and further refined into jet fuel. Simply put, the organism created secretes the fuel in a direct process, working faster than current biofuel technology that often uses algae.

"The organism lives naturally in the wild and we thought it would be an ideal platform organism that we can then use for our engineering efforts," explains Sims. "We do a process that we call genome engineering. And that is a combination of systems biology, synthetic biology and genetic engineering; and that work that we do in our biology labs when we are here allows us to create the process that converts the key elements of photosynthesis directly into molecules of interest."

Officials with the Energy Information Administration report that diesel consumption in the United States has steadily risen in recent years. In 2005, 9.4 million barrels were used. In 2009, 1.04 billion barrels were consumed. In 2010, diesel supplied 5.9% of the U.S. energy needs.

Joule is taking the first big step toward commercialization, leasing more than 1,000 acres of land in Lea County, New Mexico. They hope to prove the organism can produce fuel quickly, on a large scale, nearly anywhere.

Sims believes the technology can revolutionize part of the fuel industry, meeting transportation needs virtually anywhere around the world.

"What this approach brings is not only environmentally friendly, but it also brings localization to the fuel business for the first time. It also provides for consistency of availability or supply and cost. None of this has ever been present in the oil business in the past," said Sims. "It brings energy security. It brings job creation."

Sunlight, water and waste CO2 are widely available. Sims says the process is environmentally friendly and can even take advantage of waste CO2 from traditional power plants nearby.

"We believe it's quite green. We are taking waste water and waste CO2, so tapping into flu stacks, so, therefore, turning something people generally view as bad directly into something that fungible that burns cleaner than gasoline. The only other output from our process, besides the product itself, is pure oxygen. So there's no CO2 being produced as part of the process," said Sims.

The company could seek to locate near coal-fired plants, natural gas plants or factories where an abundance of waste CO2 is available.

Ian Bowles, the former Energy and Environment Affairs Secretary in Massachusetts, acts as managing director of RHUMB Line Energy, a consulting firm that specializes in emerging and existing energy supplies and creating partnerships in the industry.

Bowles says one of the greatest challenges new suppliers face is raising capital.

"In the case of an energy product, you're talking often times of hundreds of millions of dollars of infrastructure to build the plant that produces something whether it's electricity or a fuel -- and that's been the challenge for clean energy is getting over that commercialization gap," said Bowles.

One selling point Joule can utilize may be its need for CO2. There is no shortage of supply, but companies are seeking ways to get rid of it. "That's been one of the great questions over time is what do you do with all that CO2 coming out of traditional fossil fuel plants?

People have been exploring injecting it into recovery of natural gas or petroleum wells, sequestering it underground in giant caves, burying it in the deep ocean and people have tried for a generation to figure out how to make algae efficiently and haven't been able to do that and so the idea of recycling CO2 which we're creating in our power plants into a fuel source is absolutely a vital challenge," says Bowles.

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