What if averting peak oil meant not turning up more rocks but growing oil in a lab?

Since 2006, Virent, a Madison, Wisconsin-based venture founded by chemical engineering Ph.D Randy Cortwright, has been doing just that.

Earlier this year, the company announced it had completed a pilot refinery sponsored by Shell to help the oil giant meet renewable fuel standards.

The process is a quantum-leap improvement on how ethanol gets made. While it uses similar materials like corn starch, sugar cane and wood, the end product has a much higher energy content than regular ethanol.

Virent says its products, unlike ethanol, can literally be "dropped in" to existing fuel supply chains, meaning manufacturing facilities, pipelines, tanks and fueling stations would not need to change anything about the way they currently operate.

Virent's technology uses hydrogen gas and metal compound agents to catalyze plant products, then uses a decades-old refining formula first pioneered by Mobil to convert them into the complex hydrocarbons that constitute premium fuel products.

Here's how it looks in chart form. Ru stands for ruthenium; Pt, platinum; and Re rhenium. ZSM-5 is the Mobil-inspired process:

Here's how it looks in illustrated form:

And here's how it compares with regular fermentation, which is far less efficient and more wasteful than Virent's process.

Virent is no flash in the pan. Besides the Shell endeavor, they've already partnered with Coca-Cola to convert their entire bottling system to plant-based material. Plus, Formula One teams are already using Virent fuel to meet FIA fuel standards.

The company still faces some obstacles to getting to an economically-feasible scale. For example, the renewables industry does not enjoy the same tax breaks and flexible corporate statute rules afforded to the fossil fuel industry (the Senate recently introduced a proposal to change this; its sponsors believe it would gain more traction than the ending-subsidies debate).

CEO Lee Edwards told us that the Solyndra debacle has unfairly left clean tech with a black eye.

"It's really unfortunate," Lee said. "A loan guarantee ... all these companies have risk that can't mitigate" external market forces.

Still, Edwards believes Virent will have its first commercial factory up within the decade, which could shake the petroleum industry to its core.