The most recent issue of Science News explores new breakthroughs in the quest to find renewable fuel sources. Engineered E.coli has been found able to digest seaweed cell walls (alginate) to form ethanol. This is promising, as many other biofuel sources require significant water and land resource use in their creation.
According to the original study published in the January 20, 2012 issue of Science, the brown microalgae used require "no arable land, fertilizer or fresh water resources," and "cultivation of these crops circumvents economic concerns associated with land management and...food supplies." The team of Bio Architecture Lab scientists, from Bio Architecutre Lab, headquartered in Berkely, California, found the engineered bacteria to produce ethanol at 80% of theoretical maximum efficiency.
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Photo via How Stuff Works: How Algae Biodiesel Works