James Liao may be one of the most important people in the nation's energy sector.

And while his name may be unfamiliar to just about everybody not intimately involved with biofuel innovation, that could quickly change.

He leads a team that has developed a microbe capable of turning cellulosic material, or grassy and woody matter, into isobutanol, a fuel with huge potential. Just how huge, we'll likely find out in coming months. But suffice to say it's important, especially with gas prices pushing $4 per gallon.

This fuel is a far bigger deal than ethanol, which is made in this country from corn. Liao's team's feat is the first time isobutanol has been coaxed directly from cellulose.

"Unlike ethanol, isobutanol can be blended at any ratio with gasoline," Liao said in a statement from Oak Ridge National Laboratory. "Plus, it may be possible to use isobutanol directly in current engines without modification."

The last sentence is a big one. It certainly captured my attention.

Liao's statement implies that should this process reach commercialization at a cost consumers will accept, the United States has a shot at providing an alternative fuel at a reasonable price to compete with foreign oil. Don't expect panacea, or cure-all, but an alternative fuel that could substitute for refined petroleum would no doubt exert economic pressure on retail fuel prices.

The conflict in Libya between Gadhafi and separatist forces shut off the oil production spigot in that country and illustrates what eliminating a small percentage of the world's crude can mean to prices. At this writing, the price remained above $100 per barrel, according to oil-price.net, but showed a decline. And the one year forecast dropped by about $10.

Injecting an alternative source, cellulosic isobutanol for instance, likewise could push prices lower -- perhaps far lower.

But, as energy seer Paul Johnson just told me, it's hard to tell initially future junk bonds from the next Microsoft. And that may be the case here. But I hope not.

Paul is executive director of the nonprofit I work for, the San Joaquin Valley Clean Energy Organization and just returned to Seattle after attending REXPO, the recycling exposition in Stockton, Calif. put on by Frank Ferral with the Greater Stockton Chamber of Commerce.

Paul said clean energy opportunities abounded at the event and noted "very positive energies given the fact of the economic gloom and doom."

Liao wasn't at REXPO, but he is one of clean energy's bright spots. He serves as chancellor's professor and vice chair of Chemical and Biomolecular Engineering at the University of California Los Angeles Henry Samueli School of Engineering and Applied Science.

The isobutanol work was conducted at the Department of Energy's BioEnergy Science Center, led by Oak Ridge National Laboratory. The team's findings were published online in Applied and Environmental Microbiology.

U.S. Energy Secretary Steven Chu called the advance "yet another sign of the rapid progress we are making in developing the next generation of biofuels that can help reduce our oil dependence."

Chu said the technology promises the potential of a new industry that can convert wheat and rice straw, corn stover, lumber wastes and specialty plants into fuel.

DOE has given extra attention to the biomass sector of late, offering a series of webinars on the subject that even included algae, another of my cool fuel picks. The agency is coordinating peer review meetings of advancements on various processes that will continue through June 2011. DOE plans to use the information as it considers future funding decisions.

Expect Liao to continue making news in the cellulose sector. Last year, he was awarded the 2010 Presidential Green Chemistry Challenge Award from the U.S. Environmental Protection Agency. The award, according to a story for the UCLA Engineering Department by Wileen Wong Kromhout, promotes research on and development of less-hazardous alternative technologies that reduce or eliminate waste.

In the story, Liao sounds committed to providing an alternative to fossil fuels. "It is essential to develop a renewable source to replace petroleum as the major chemical and energy source," he says.

I know a bunch of guys on my street in Clovis, Calif. who would maybe turn their noses up at the concept of plant fuel. But if it enables them to keep their mondo lift Chevy trucks on the road, they'd be big supporters.