STORRS–Think of biofuel, and what comes to mind is vast acres of Midwest corn for ethanol, or a hobbyist fueling his tractor with old French fry fat. But in a lab at the University of Connecticut, researchers are looking into commercial-scale biofuel manufacturing using cooking oil, switchgrass and–perhaps most intriguing–algae.

The UConn team has received a $1.5 million federal energy grant they will use to transform a tiny lab where the dining halls’ used cooking oil bubbles into fuel and runs the campus buses. This small room will become the test site for an industrial scale production of biofuels. They believe this could be the basis of a solid, local fuel economy.

Biofuels can be made of many things, from cooking oil to plants. Producing them requires relatively little space and leaves little environmental impact, said Richard Parnas, professor of chemical engineering at UConn, pointing to a cone-shaped container smelling like French fries in his campus lab.

Connecticut began to make small steps toward a biofuels industry six years ago, by classifying biofuel as a renewable energy resource. The UConn venture is one result, along with another biofuel producer and several biodiesel distributors.

For a few years now, Parnas has been producing biofuels in his own reactor on campus to help power the campus buses. The operation uses waste oil from the dining halls and will aim to use waste oil from restaurants around the region. But the big possibilities for biofuels remain the growing of algae, he says.

One acre of algae can produce about 20,000 gallons of fuel, compared with the 18- to 20-gallon yield from an acre of corn, making commercial production feasible for a densely-populated state like Connecticut. But the work with algae remains experimental: Parnas said he has witnessed some tests with algae so far only in Rhode Island. A colleague will be experimenting with other plants on the Storrs campus.

Biofuel research, nationwide, is still in its early stages. The federal government concluded after a research symposium a few years ago that even if plant-based fuels can be produced, it’s not clear that they will find market demand.

Connecticut could take a leading role in biofuel research, said Fred V. Carsensen, director of its Connecticut Center for Economic Analysis and another partner in the UConn biofuel enterprise.

Five years ago, he noted, Connecticut committed itself to becoming a leader in stem cell research with an initial $20 million investment and a pledge of continued support. That effort, he said, “attracted world class researchers.”

“Here’s the analogy: If we did in biofuels or in alternative energy what we did in stem cells, the potential is enormous,” Carstensen said.

But last year, he noted, then-Gov. M. Jodi Rell tried to cut the fund’s allocation in half, to $5 million, though she was overruled by the legislature.

“The problem is that Connecticut does not have a tradition or a commitment to these kinds of well-designed, collaborative frameworks which are sustained,” he said. “What was so scary about Rell proposing to cut the commitment to $5 million, it immediately calls into question the entire commitment.”

The UConn biofuels project, RPM Sustainable Technologies, is an expansion of a consortium that has been producing biodiesel from waste cooking oil for the university’s bus fleet. Boosted by the grant, and looking for investors, five partners will test a larger reactor that produces biofuels out of waste oil and study the potential of growing cellulosic plants and algae here.

Parnas is the main partner behind this project. He said that he is a “biofuels fanatic,” and won an environmental award from the university in 2007 for his biofuel research. Biofuels can become part of the solution to the nation’s energy problems, he believes, with more research, investment, and state policies to help those along.

Right now, with a $3.7 billion deficit, the state can’t commit to incentives, Gov. Dannel P. Malloy said. He said, though, that biofuels interest him.

“I’m all ears, very interested in it,” Malloy said “I’m also interested in different waste sources for the creation of fuel.” But for the next five or so years, Malloy said, the only strategic investments the state can afford are those “that are not going to drive costs substantially higher. This is not a time to drive costs substantially higher.”

But Connecticut already has a nascent biofuel industry and policies in place to help it grow. The state’s first commercial biodiesel refiner, BioPur, moved from a goat-farm garage to a factory in 2006 and began producing 400,000 gallons a year from waste vegetable oil to blend with car and truck fuel and home heating oil. Other refiners have opened in Southington and Waterbury and one is planned in New Haven.

Starting next year, state law will require a minimum of 2 percent of biodiesel in home heating oil sold in the state. The percentage will increase to 5 percent by 2012, 10 percent by 2015, 15 percent by 2017, and 20 percent by 2020.

Michael Devine, a consultant who promotes biodiesel in heating oil, said that if Connecticut accelerates the move to 5 percent biodiesel in heating oil, local small businesses could produce and/or sell the roughly 32 million gallons of biodiesel that would represent.

Devine said he started his company, Earth Energy Alliance in Westport, after selling home heating oil for two decades and deciding that it is “a lousy product”–expensive and subject to supply uncertainties.

He thinks that the small group of distributors selling biodiesel now would grow to perhaps hundreds, since home heating fuel must be delivered by truck. “It allows entrepreneurship to flourish,” he said. “It takes a marketing quandary and replaces it with local fuel distributed locally.”

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