In an East Side laboratory, across from Madison Area Technical College, a pale liquid flows through tubes and vats, a liquid that could eventually shake up the powerful petroleum industry and even alter the global economy.

That's the dream of Virent Energy Systems, a company that is rapidly moving ahead with its product: biofuel derived from plant sugars. It is gasoline for cars and jet fuel for airplanes -- not a gasoline substitute or add-in but actual fuel with the same chemical composition as the stuff that cost more than $4 a gallon over the summer.

Virent, established in 2002 based on patented UW-Madison research, is off to such a strong start that it has lured an executive from BP, the world's third-largest oil company, to become the new chief executive officer.

Lee Edwards will officially join Virent in January as CEO, but already he is eagerly finding his way around and bubbling with enthusiasm about prospects for the company, citing the uniqueness of its people, its products and the dozens of patents supporting the technology.

"They are making a hydrocarbon that's exactly the same as gas. That was very unique. It's a high-performance molecule, very similar to what comes out of (oil) refineries today. It's a product that consumers will want to buy," Edwards said.

Edwards, 51, a native of Morristown, N.J., had been president and chief executive of BP Solar, a global solar technology company with 2,200 employees and $1 billion in sales. He has lived around the world, including London, Brussels, Philadelphia and Chicago.

Now he's looking for a place to live in Madison. Edwards says there is something different about the culture here that's a draw for him. For one thing, employees at Virent are united in a single purpose: to develop sustainable transportation fuels that won't harm the environment.

"There's a humility and confidence that (co-founder) Randy (Cortright) and his team have. It's something I want to be a part of," Edwards said.

Liquid fuels

When Virent was established, both its product and its mission were a little different. The process discovered by UW-Madison scientists Cortright and James Dumesic involved turning sugars into a hydrogen mixture. Initially, the idea was to use the hydrogen for fuel cells.

A 2006 Virent demonstration project used soybean and corn byproducts to create a mixture of hydrogen and components of natural gas that then-CEO Eric Apfelbach called Supernatural gas. The gas fueled a generator that produced 10 kilowatts of power, enough to light about five homes. In a project with Madison Gas & Electric, Virent's electricity was sent to the grid that carries power to homes and businesses, and the heat, a waste product of generating electricity, was used to warm Virent's building, Apfelbach said.

Then the company's researchers discovered that by combining the hydrogen-formation process with other catalytic technologies, they could produce conventional liquid fuels. They call the technology BioForming, and can use it to make gasoline, diesel fuel and jet fuel.

That development has fueled Virent's growth. From a company with 20 employees in January 2006, Virent now employs 75. It occupies one full building at the TEC (Technology, Education and Commerce Center) campus at 3571 Anderson St. and a second is under construction, adjacent to the first.

The company has raised more than $30 million in private financing and $11 million in federal grants. Virent also is collaborating with Royal Dutch Shell in a five-year collaboration to develop the biogas.

"Virent's become a fuel company," Apfelbach said in a recent interview. "Since we're making biogasoline, getting somebody from that industry was really critical. ... We're trying to be disruptive in an old industry."

Apfelbach, who also led Madison laser-diode developer Alfalight in its early years, left Virent in October but said he is helping with the transition.

'The perfect time'

Edwards' mission will be to take the technology to the next level, to demonstrate that it works at a larger manufacturing scale. A pilot plant under construction will be able to produce 10,000 gallons of fuel a year. The next step will be 10 million gallons; it will take about three years to get there, Cortright projected. And then, the goal will be 100 million gallons. When Virent gets that far, it will be ready to go commercial.

"We'd like to be there sooner, but it will probably take five to seven years (to reach)," said Cortright, who also is Virent's executive vice president and chief technical officer.

It's too soon to say where a refinery that big might be built, but it will cost hundreds of millions of dollars, Edwards said.

Can it be done?

"Oh yeah. I wouldn't be here if it wasn't doable," Edwards said. "It's a question of how big and how quickly."

Virent is one of many companies working on fuel alternatives. Most involve ethanol, whose opponents have raised questions over transforming acres of land used to grow food, mainly corn, into fodder for fuel.

"Nobody does it like Virent does it," Edwards said.

Virent's biofuel is not ethanol and does not use corn kernels. Its agricultural sources include wood waste, switchgrass, sugar cane plant residue and cornstalks. Bioengineered crops are also being considered. Virent says its fuels have twice the net energy yield per acre as ethanol and produce "near zero" carbon dioxide emissions.

Also, its fuels can use the existing system of gasoline pipelines and pumps, which means that Virent officials can envision a day when motorists might pull up to a gas station, much as they do today, and fill their vehicle's tank with Virent biofuel.

With oil at $50 or $60 a barrel, the cost of producing Virent's fuel is comparable, Cortright said.

And small-scale plants can be built anywhere close to biomass.

"Now is the perfect time" for Virent's biofuel, Edwards said. "This will create new jobs. It will let consumers feel better about what they're driving."