Consumers will have more than gasoline and diesel to choose from when they pull up to the pump.

When talk turns to the need for alternative fuels, ethanol made from corn often comes to mind. But for 25-some years, researchers at a pilot facility at National Renewable Energy Laboratory (NREL) in Golden, Colorado, have been quietly and steadily working on developing biofuels made from nonedible plants like prairie grasses, wood chips and harvested corn and wheat leftovers. They’re close to achieving a DOE goal: producing by 2012 “cellulosic” ethanol cheap enough to compete with conventional gasoline.

NREL researchers refer to the facility as a “glorified brewery.” Here corn husks and stalks and switchgrass are fed into giant vats and churned into a tarry sludge that smells like molasses. After this “pretreatment,” which releases sugars locked in cellulose, the sugary paste is mixed with fermenting microorganisms and water, then left to “brew” for several days in giant fermentation tanks.

The facility, constructed in 1995, produces primarily liter-sized portions of ethanol and operates in intermittent runs. Its capacity is about one ton of biomass per day. If run around the clock, it would produce some 75 gallons of ethanol for every ton of feedstock. In contrast, a commercial-scale plant could process some 700 to 1,000 tons of biomass daily.

The goal of NREL’s pilot plant is to perform the research and development necessary to make cellulosic ethanol production cost-effective and to demonstrate how it could be produced on an industrial scale.

Currently, cellulosic ethanol produced for commercial markets would sell for roughly $2.43 per gallon compared to the approximate $1.33 per gallon price needed to be commercially viable by 2012, reported Andy Aden, a biomass group engineer. Consequently, NREL researchers are working to overcome significant hurdles, such as dismantling cellulose molecules, that require enzymes (natural proteins), to help the process. But these enzymes are expensive and drive up ethanol production costs. Unlike corn kernels, which are made up of starches that readily dissolve into simple sugars, cellulose does not release sugars easily. It’s the part of the plant that gives cell walls their structure, and nature has made it especially hard to break down.

“Nobody really knows the magic that goes on when these enzymes break down material into sugars,” said George Douglas, NREL spokesman. But NREL is working with industry partners to find out.

Also necessary for lowering cellulosic ethanol production costs is improving the efficiency of the fermentation process. Cellulose breaks down into five different sugars, all of which must be fermented by different microorganisms. NREL and its industry partners are engineering microorganisms that can ferment several sugars simultaneously and with higher yields. They are also experimenting with temperature ranges and nutrients to find the most suitable conditions to speed up the process.

Another NREL goal is to quadruple today’s current production by producing 36 billion gallons of renewable fuels per year by 2022. While corn-based ethanol currently meets most of the U.S. demand for biofuels, important drawbacks include the fact that corn is a staple of the world’s food supply. Its use for fuel has an impact on food prices. In addition, corn is grown on valuable agricultural land and involves energy-intensive processes for growth and harvesting.

In contrast, most cellulosic biomass, like sawdust and corn stover, is a byproduct of other processes. So-called “energy crops,” such as switchgrass, thrive in marginal soils, use much less water and yield about 7 tons more per acre than corn. Another benefit, cellulosic biomass contains the molecule lignin, which acts as glue for the plant’s cells and, as a byproduct of the fermentation process, can be used as a combustion fuel. Cellulosic ethanol produced on a commercial scale produces sufficient lignin residue to provide heat and electricity for the entire production and refining process.

To meet both goals, NREL is in the process of expanding its biofuels plant to double its geographic footprint and expand its research capabilities. After 2012, when the goal of producing cost-effective cellulosic ethanol is met, the industry will likely expand to other “green” fuels, such as butanol, Aden said.

In the meantime, cellulosic ethanol has the potential of curtailing gasoline use significantly and making the U.S. energy portfolio much more sustainable. “Right now, when you pull up to most pumps, you’ve got two choices: gasoline and diesel,” Aden said. “But in the not-too-distant future, consumers will have more choices, and that’s exciting.”