By Suzanne Bohan

Researchers in Emeryville have engineered a microbe that produces biodiesel fuel directly from plant waste and grasses, according to a study published Thursday in the Journal Nature.

The development was hailed as a major milestone in a federal initiative to develop new forms of transportation fuels to ease the country’s dependence on foreign oil and to reduce carbon dioxide emissions.

“This is a very important advance,” said Jay Keasling, chief executive of the Joint Bioenergy Institute and acting deputy director of Lawrence Berkeley Laboratory, which manages the Joint Bioenergy Institute.

“One, we engineered (the bacteria) to produce a diesel fuel. What’s important about that is, it’s not ethanol.”

Energy Secretary Steven Chu sent an excited message praising the advance, Keasling said. The institute, which opened in late 2008 with the mandate of developing commercially viable alternates to corn-based ethanol within five years, has a $125 million Department of Energy grant.

It opened following the passage of a federal law mandating for energy security and environmental reasons production of at least 36 billion gallons per year of biofuels by 2022. It also limits the amount allowed for conventional biofuels, such as those made from corn, to 15 billion gallons annually by 2022.

Energy officials are pushing to limit ethanol production, partly because it uses a human food crop and valuable cropland to produce fuel. Ethanol also has to be delivered in trucks — a pollution source — because it corrodes pipelines.

“This was about making a fuel that would work with our existing infrastructure” for diesel, Keasling said.

Institute scientists in Emeryville collaborated with researchers at LS9, a biotechnology firm in South San Francisco, to engineer a bacteria that overcame the primary challenges of extracting fuel from tough plant material called “cellulosic biomass.” The biomass can be taken from agricultural waste material or can be grown on marginal land unsuitable for farming.

The bacteria, a strain of the laboratory workhorse E. coli, can convert materials such as straw, wood chips or grass directly into fatty acids used as fuels. These plant-derived fatty acids are called “nature’s petroleum.”

To enable that, scientists spliced in genes that allowed the E. coli to create an enzyme that breaks down the plant material, releasing complex sugars.

“It just reduces the overall cost, and now you have the possibly of doing it in a single pot instead of two,” Keasling said.

But scientists didn’t stop there. To produce enough fatty acids to make it commercially feasible, they had to rig the bacteria to keep eating, even after it no longer needs to, and to release the fatty acids it produces.

They succeeded in taking off the bacteria’s internal controls over fatty acid, or biodiesel, production.

The challenge now is going from laboratory flask to commercial-scale fermentation tanks to produce vast quantities of fuel. Institute scientists will continue working with LS9 researchers on that, with hopes of developing an economically viable production system within two years.

Worldwide for diesel fuel is growing, the Nature study noted. The Emeryville scientists also plan to manipulate bacteria to produce biodiesel for jet planes.