Photo of flowers on the Ulmo tree, in which the fungus was found: Wikipedia.
If there's a holy grail of biofuels industry it would be something like this... The Guardian is reporting on research done at Montana State University which has discovered that fungus which grows inside a tree in the Patagonian rainforest natural produces chemicals which are "remarkably similar to diesel" fuel.
Montana State plant scientist Gary Strobel describes the significance of the discovery,
This is the only organism that has ever been shown to produce such an important combination of fuel substances. We were totally surprised to learn that it was making a plethora of hydrocarbons.
Fungus Found Growing in Patagonian Tree
Strobel calls the chemical mixture 'mycodiesel', but the scientific name for the fungus which produces it (found growing inside the ulmo tree, Eucryphia cordifolia is Gliocladium roseum. Strobel says that this mycodiesel could be used in a modern diesel engine without modification.
And It Also Eats Cellulose
Strobel describes another advantage of the fungus, its ability to eat cellulose to produce mycodiesel,
Although the fungus makes less mycodiesel when it feeds on cellulose compared to sugars, new developments in fermentation technology and genetic manipulation could help improve the yield. In fact, the genes of the fungus are just as useful as the fungus itself in the development of new biofuels.
As is usual with this sort of discovery, a good deal of work remains before the commercial potential of this discovery is fully known. So don't expect your local filling station to have a mycodiesel pump anytime soon.
More on mycodiesel, including Strobel's speculations on the implications of this discovery on how fossil fuels were originally created: The Guardian. AFP also has some more on how Strobel came to find the fungus.
The full results of the research will be published in the November issue of the journal Microbiology.