"Essentially we start with a bale of wheat straw, add enzymes to convert the straw into sugar, and then let fermentation and distillation make the sugar into ethanol."
What's more, producing ethanol with this process creates a byproduct called lignin, a mix of polymers found naturally in woody plants that binds plant fibers together.
The lignin extracted from farm waste can be burned like coal to power the ethanol production facility, according to Iogen.
"Almost a quarter of plant fiber is lignin, which can be extracted to run the boiler," Easterly, the energy consultant, said.
Hosein Shapouri of the U.S. Department of Agriculture says that such factories wouldn't need energy from fossil fuels to run the plant.
"[They] can even produce extra electricity that can be sent to the public power grid," Shapouri said. "These plants will be self-sufficient."
And farmers operating near the plants will be offered a new source of income for their previously discarded agricultural waste.
So far Iogen has built a demonstration plant in Ottawa that is providing ethanol to local users.
The hitch is getting the first commercial-scale plant operational.
"The truth of the matter is that someone has to build the first [commercial] plant, and no one wants to do that," Shapouri said.
"They want to be the ones building the second plant, learning from the first's mistakes."
Scaling up from a test facility to a commercial plant can be a difficult path to navigate. But with rising energy prices worldwide, the venture seems to be a risk Wall Street is willing to take.
Investment banking firm Goldman Sachs announced last week that it was putting 30 million U.S. dollars into Iogen, adding to money already in place from the Royal Dutch/Shell group and various other big partners.
"It looks like this process for producing ethanol offers distinct advantages to traditional ethanol production," Easterly said.
"By using agricultural residue you can dramatically expand the renewable fuel source in an environmentally benign way."
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