As oil surpasses $75 a barrel and gas hits $3 a gallon, Americans might find it hard to imagine higher costs. But this auto-centric perspective overlooks the hidden costs of our petroleum addiction.

"The diesel engine is the backbone of the American economy," says Matt Atwood, project manager for Biodiesel Systems, LLC, an independent, Madison, Wis.-based start-up. "While accounting for only 12 percent of our total fuel consumption, it transports 70 percent of the nation's goods to market in shipping containers hauled by semi-trucks." Diesel also accounts for transporting 18 million tons of freight and 14 million people every day, to the tune of $6 trillion a year, or about 51 percent of our GDP.

But what if diesel and petrochemicals could eventually be replaced by localized, sustainable industries of natural, renewable materials that are non-toxic and biodegradable?

This is the solution offered by the European Association for Bioindustries, known as EuropaBio. EuropaBio claims that industrial biotechnology has the potential to revolutionize industry by reducing pollution and waste, decreasing the use of energy, raw materials and water, and creating new materials and biofuels from our waste products-including biodegradable plastics and building materials, as well as renewable fuels like biodiesel and ethanol.

The key to industrial biotechnology, according to Novozymes, the "world leader" in enzyme technology, is new "cellulosic" technology. This involves genetically engineered enzymes that break down agricultural and forestry waste (and eventually, garbage and other unused organic matter) into usable energy and building material.

BIO (Biotechnology Industry Organization), the American biotech lobby group, has recently begun promoting a sustainable "bio-based economy." But opponents have called this new industrial paradigm everything from a "Trojan Horse to push the acceptance of GMO crops" to something "worse than fossil fuels."

They are concerned that the production of biofuel from crops consumes more energy than it produces, and therefore causes more air pollution, soil and water depletion and pollution, forest destruction and harm to animals.

In April, John Peck of the National Family Farm Coalition led a panel discussion in Chicago on GMOs during BioETHICS 2006, a conference that took place the same week as the annual BIO convention. Peck dismissed ethanol outright, explaining its recent vogue as an industry response to "vast quantities of [surplus] low quality Bt [GMO] corn that has hardly any market" and that producers want to "dump it at taxpayer expense into domestic ethanol production."

Peck says the ethanol industry is almost exclusively controlled by Big Agro corporations like Cargill and Archer Daniels Midland, subsidized to the tune of $.51 per gallon. But, BIO has not been shy about their enthusiasm for government funding of this industry. They have called it a means to "end U.S. addiction to oil" and they envision turning the "nation's breadbasket" into "the energy fields of the United States."

Regardless of whether ethanol is the answer, many believe that the paradigm shift itself is the imperative-but point out that it will take time and effort. "New technology must be introduced in gradients, and significant investment is needed to do it, regardless of corporate corruption," says Vinay Gupta, who worked on the Pentagon-co-funded report, "Winning the Oil Endgame."

Gupta points out that even the U.S. Department of Energy said a successful transition to the post-petroleum era would require several decades and a significant portion of our remaining fossil fuels. "The first step is conservation, which frees up the necessary oil to begin building the new infrastructure, like Biodiesel refineries," he says.

Novozymes CEO Steen Riisgaard acknowledged that concerns about arable land use are valid, but argued that cellulosic enzyme technology will redress them. EuropaBio claims that biomass is still attractive as a fuel source because "the CO2 it produces is offset by the CO2 absorbed by the plants that go into making it as they grow."

Both sides agree that biomass can be grown without planting vast new fields of GMO crops. Advocates like Peck believe that the burgeoning biomass supply market should remain localized and democratic, outside of corporate control.

This was one of the factors that convinced Biodiesel Systems' Atwood to get into this business. "Biodiesel can take this faucet of money being pointed at other nations to purchase oil and point it back at Midwest farmers," he says.

But even for a new technology with clear benefits, principled opposition runs deep. "For almost every problem you can imagine, a non-biotech approach is cheaper, more effective, and healthier for land and people," says Friends of the Earth's Bill Freese. "Only political will is lacking. Many of us who oppose biotech do so in part for the sake of creating space for these healthier alternatives."