TODAY THE FACTORIES THAT MAKE GASOLINE, diesel and jet fuel are huge clusters of steel pipes and tanks that consume prodigious amounts of energy, release toxic fumes, and run on an exhaustible resource, petroleum. But tomorrow they might be microscopic, and they might run on the garbage hydrocarbons that are all around us—the paper of this magazine, scrap lumber from a construction project, or the leaves you raked off your lawn last month.

The trick is to transform the hydrogen- and carbon-based molecules inside these everyday items into a liquid at room temperature, thus making them suitable for use in internal-combustion engines. The most promising efforts involve genetically modifying single-celled organisms to do this conversion work for us. Many of these organisms already build hydrocarbons out of raw materials found in the environment, though not in a way that makes the product available for human use. For example, algae are very good at turning carbon dioxide into fatty acids that can be refined into fuel, but getting the algae out of the water and the fatty acids out of the algae requires so much effort that the process is mostly used for pricey products, such as cosmetics.

A better solution would be to create organisms that directly “secrete” the hydrocarbon. (Commercial firms understandably don't like the more accurate, but less pleasant, “excrete.”) With an organism that secretes, “you transform biomass from something you harvest into something that comes from little chemical factories,” says Eric Toone, an Energy Department official in charge of making grants to companies with novel biofuel ideas.

Creating genetically modified fuel factories raises other complications, however. Many people worry about engineered organisms finding their way into the environment; vats of single-celled bugs would be almost impossible to contain.

The organisms must also be kept well fed—the question is with what? One approach is to use sunlight. In September, Joule Unlimited, a biotechnology start-up in Cambridge, Mass., won a patent for a gene-altered bacterium that uses sunlight and carbon dioxide to create components of diesel fuel.

Another strategy is to use sugars. When plants capture energy, they chemically lock up that energy in sugars located in the woody portion of the crop. Many researchers are devising ways to recover the sugars from these “cellulosic sources” and turn them into ethanol, which gets a tax credit but has a lower energy density than gasoline and does not run well in conventional cars at high concentrations.

Instead scientists and engineers hope to make more useful chemicals directly from those sugars. In July scientists at LS9, a company in South San Francisco, said they had modified E. coli bacteria to enable the organisms to convert sugars into alkanes, a class of hydrocarbon that is identical to many of the molecules produced in standard oil refineries. With a few more tweaks to the genome, the fuel in your tank could even come from sugars pried from the scrap heap.