4 new ways to solve the energy challengeJanuary 5, 2012: 5:00 AM ET
4. Tapping fuel from the ocean floor
In the race to find an economically viable biofuel, researchers are now looking at a surprising source: seaweed. While making cheap fuel from pond algae has proved difficult, the potential advantages of seaweed, or macro-algae, are big. It's one of the world's fastest-growing plants, doesn't need fertilizer, requires less acreage than land-based crops (plus, no clear-cutting to make way for farms), and its fuel would emit less CO2 than the current ethanol champion, corn.
More important, more than half the dry mass in seaweed is sugar, which is the new crude, fuel scientists say. That's because sugar can be easily converted to ethanol or butanol. Bio Architecture Lab, a startup, has partnered with DuPont (DD), the Department of Energy's ARPA-E labs, and the venture arm of Norway's Statoil (STO) to develop the chemistry that would unlock the energy in that sugar and create a fuel that's cheaper than the alternatives.
Bio Architecture Lab, headquartered in Berkeley, has built three seaweed farms off the coast of Chile. Workers using winches and lines harvest giant strands of seaweed from boats. The company recently broke ground on a pilot ethanol manufacturing plant in the Los Lagos region of Chile, slated to start operations next year. The challenge: It's one thing to make small amounts of fuel in a lab, but fuel production is a big global business. Will this technology be able to scale affordably? --A.V.
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This article is from the January 16, 2012 issue of Fortune.