A fungus that lives inside trees in the Patagonian rain forest naturally makes a mix of hydrocarbons that bears a striking resemblance to diesel, biologists announced today. And the fungus can grow on cellulose, a major component of tree trunks, blades of grass and stalks that is the most abundant carbon-based plant material on Earth.

"When we looked at the gas analysis, I was flabbergasted," said Gary Strobel, a plant scientist at Montana State University, and the lead author of a paper in Microbiology describing the find. "We were looking at the essence of diesel fuel."

While genetic engineers have been trying a variety of techniques and genes to get microbes to create fuel out of sugars and starches, almost all commercial biofuel production uses the century-old dry mill grain process. Ethanol plants ferment corn ears into alcohol, which is simple, but wastes the vast majority of the biomatter of the corn plant.

Using the cellulose from plants — the stalk instead of the ear, or simply wood from poplars — to make liquid fuel is a long-held dream because it would be more environmentally efficient and cheaper, but is far more difficult.

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First, the cellulose must be broken down into its constituent parts — sugars bearing carbon — and then those pieces must be synthesized into more complex hydrocarbons.

Both steps have proven difficult to do without applying large amounts of heat, pressure or chemicals.

"Traditionally that's been an energy-intensive process that also involves lots of chemicals," said Andrew Groover, a plant geneticist studying cell wall formation at the U.S. Forest Service's Pacific Southwest Research Station.

"So, one approach is to look for situations in nature where there are organisms that can break down wood as part of their natural lifestyle:

wood rot, fungi, termites."

What's exciting about the Gliocladium roseum fungus, however, is that it can both break down cellulose and synthesize the liquid fuel.

"A step in the production process could be skipped," Strobel said in a press release.

That said, the paper's authors admit that the technique is far from any sort of industrial production.

"This report presents no information on the cost-effectiveness or other details to make G. roseum an alternative fuel source," they write. "Its ultimate value may reside in the genes/enzymes that control hydrocarbon production, and our paper is a necessary first step that may lead to development programmes to make this a commercial venture."

The genome of the fungus is being analyzed at Yale University under the direction of Scott Strobel, a molecular biologist and Gary Strobel's son.

But beyond the biofuel implications, Strobel said that because the fungus can manufacture what we would normally think of as components of crude oil, it casts some doubt on the idea that crude oil is a fossil fuel.

"It may be the case that organisms like this produced some — maybe not all — but some of the world's crude," Strobel said.

Images: 1. *Gliocladium roseum. 2. Gary Strobel on one of his many international journeys to find novel species.

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