A new energy bill that Congress passed late last year sets in motion plans to increase fuel economy to an average of 35 miles per gallon by 2020. The bill also included plans to increase domestic bio-fuel production to 36 billion gallons by 2022. Of that, some 21 billion gallons must come from non-food sources.

Consumers also are now searching for cars that are more fuel-efficient as crude oil tops $100 a barrel and retail gasoline prices seem stuck above $3 a gallon around the country.

G.M. has been solidly behind ethanol, primarily produced from corn, for years. In early 2006, it launched a marketing campaign called "Live Green, Go Yellow" to make consumers aware of its flex-fuel vehicles and E85. The "yellow" in the tagline referred to corn.

Coskata maintains that it can produce ethanol from old tires, municipal waste, even debris from hurricanes through its bacterial process for about 50 cents to a $1 a gallon. William Roe, the company's president and C.E.O., says gasoline costs between $1.90 and $2 to produce.

Ethanol from corn also has other downsides. It takes almost as much energy to produce as it saves when used. Coskata claims that its process makes ethanol that produces up to 7.7 times more energy than is consumed in production.

Those numbers were arrived at by a study that Coskata commissioned from the Argonne National Laboratory. The figures are based on the company's existing research and development, not on real-world manufacturing plants.

Coskata's process is part science fiction and part simple chemistry. "Feedstock," or the primary ingredient used to create the fuel is put through a feedhandler. That feedstock can be any carbon-based material. But Roe did say that "bone dry, free and easy to handle" feedstock works the best.

While Roe played up the idea that municipal solid waste could be used, he noted that it is trickier to use. "It can be wet and there are other challenges since the waste coming in differs day to day," he said.

The feedstock is then delivered into a gasifier that breaks down whatever is fed into it into "syngas," a mixture of hydrogen, carbon monoxide, and carbon dioxide. It is then passed through a scrubber to remove particulates. The gas is cooled and sent to a "biofermentation" system that uses plastic tubing instead of the tanks most traditionally used in ethanol production.

This is where science fiction kicks in. Using proprietary bacteria acquired from the University of Oklahoma, the cooled "syngas" is consumed by bacteria in the tubing. The bacteria's digestive process has been manipulated to create only ethanol and water.

Roe claims that Coskata's system can produce 100 gallons of ethanol from a dry ton of carbon-based "feedstock." The ethanol-water mixture is then passed through a membrane that separates the two. The recovered water is then re-used in the bioreactor, leaving only ethanol, the company said.