Ethanol

General Motors Corp. and Ford Motor Co. said Wednesday that they would join with energy companies to promote the use of ethanol as an alternative to gasoline in Illinois and Missouri. GM will team with Shell Oil Products U.S. and VeraSun Energy Corp. to add 26 ethanol fuel stations in the Chicago area. Ford and VeraSun will convert 40 gasoline pumps in Illinois and Missouri to dispense E85, a mixture of 85% ethanol, which is made from crops such as corn, and 15% gasoline.

The key to kicking what President Bush calls the nation's oil addiction could very well lie in termite guts, canvas-eating jungle bugs and other microbes genetically engineered to spew enzymes that turn waste into fuel. It may seem hard to believe that microscopic bugs usually viewed as destructive pests can be so productive. But scientists and several companies are working with the creatures to convert wood, corn stalks and other plant waste into sugars that are easily brewed into ethanol.

In a lush valley flanked by the Andes Mountains, sugar is sweet again for cane grower Andres Martinez. Global prices of sugar have doubled in the last year, hitting 15-year highs and creating a windfall. The reason: ethanol, an alcohol made from sugar that is increasingly in demand worldwide as an additive to gasoline to produce so-called biofuels.

Jon Spallino drives a $1-million car to work. Banish any thought of a flashy red Ferrari. Since June, the Redondo Beach resident has been tooling around in a rather pedestrian-looking, two-door Honda FCX. What matters is on the inside: hope for a future without oil. The Honda runs on electricity from a hydrogen-powered fuel cell tucked under the seats. "I was sure I would be giving up something in terms of utility or comfort or performance," Spallino said.

Chevron Corp. is exploring investments in ethanol plants to guarantee steady supplies of the gasoline additive for its refineries. Chevron is examining whether larger ethanol distilleries could be built to lower production costs, Donald Paul, the company's chief technology officer, said in a telephone interview Monday. Chevron would be the first major oil company in 26 years to invest in U.S. production of the grain-based additive.

Chevron Corp. said it formed a biofuels unit to pursue commercial opportunities related to production and distribution of ethanol and biodiesel. The unit will operate within Chevron's technology ventures business, the San Ramon, Calif.-based company said. Chevron now produces about 300 million gallons of ethanol a year for use in gasoline blends.

Wal-Mart Stores Inc. may offer ethanol made from corn at its 383 U.S. gas stations, a company spokesman said Wednesday. Wal-Mart said it was not ready to make any announcements, but corn growers said the retailer's entry into a market now made up mainly of independent gas stations would boost a budding fuel industry. Ethanol made from U.S.-grown corn has become a hot topic this year as the federal government and American drivers look for alternative fuels.

General Motors introduced this week three additional models designed to burn high concentrations of ethanol, part of a major trend in the auto industry to offer flexible fuel vehicles. Although ethanol has a low public profile as an alternative fuel in California, it is rapidly gaining attention in the Midwest, where the corn-based fuel is primarily produced and more widely available. A blend of 85% ethanol (a form of alcohol) and 15% gasoline is sold as E85 fuel at 727 U.S.

Biofuels developer Altra Inc. bought California's largest ethanol plant from Phoenix BioIndustries Inc. of Fallbrook, Calif., for an undisclosed price, the two companies said. The plant, in Goshen, Calif., started operations nearly a year ago. It can produce from corn as much as 27 million gallons of ethanol a year. Los Angeles-based Altra is funded by several major venture capital firms and hopes to expand the San Joaquin Valley plant's capacity to 35 million gallons a year.

Ethanol maker Altra Inc. of Los Angeles broke ground on a 60-million-gallon-per-year ethanol plant in eastern Ohio. The $100-million plant in Coshocton will begin production by October 2007, said Larry Gross, chief executive of Altra, a privately held firm. Altra aims to become one of the biggest producers of ethanol and biofuel in the U.S. by buying and expanding ethanol plants and building new ones.