We've seen cars that run on biodiesel and even those propelled by wood pellets, but neither of these alternative fuel sources pose a near-term alternative to petrol-based gasoline. But, what if we could produce gas from a more abundant, clean source of energy than oil? That's exactly what Primus Green Energy hopes to do.

Primus recently dedicated their new plant--a test facility that will convert natural gas and biomass into biogasoline--in Hillsborough, New Jersey. The plant uses natural gas as the feed-stock to produce so-called "drop-in" biogasoline, a replacement for traditional petroleum-derived gas. Eventually, Primus will use wood chips and other biomass to produce their gas alternative. The term "drop-in" refers to the fact that the fuel can be used as a gallon-for-gallon replacement for conventional gasoline. It is not an additive to gasoline, like ethanol to create E85, or biodiesel.

To drive home the viability of "drop-in" gas as an alternative to conventional petrol, Primus demonstrated how it powers a new 2012 Chevy Cruze on biogasoline exclusively. Primus will produce both high quality, 93-octane gasoline that is virtually identical to gasoline produced from petroleum, as well as jet fuel.

Primus biogasoline Chevy Cruze

While it sounds like an all new process of fuel production, it is actually an improvement over an existing and commercially proven method developed by Mobil (now ExxonMobil) to produce conventional gasoline in the 1980s and 90s. Primus says its process produces a higher and better yield of fuel, compared with Mobil's old process. It can also yield jet fuel and feedstock fuels to the plastics and chemical industries.

"The construction of our new demonstration plant is a tremendous achievement that showcases our ability to scale our technology," said Primus CEO, Robert J. Johnsen. "We have gone from the concept to the demonstration stage in only five years and now, with the demo plant, we can further refine our technology with the goal of moving us toward commercialization next year."

The company believes biogasoline will be a game-changer for the auto and energy industries for a variety of reasons. Most importantly, the fuel offers a seamless integration into gasoline engines, without modification or adjustments. Clean, flexible and more efficient than standard gasoline, biogasoline also bypasses some of the issues encountered by ethanol-based biodiesel.

The cost of Primus' gasoline is about $65 a barrel, which makes it highly competitive against traditional petroleum-based gasoline, with crude oil now trading for about $83 a barrel and recently well over $100.

The obvious challenge in providing cars and trucks with biogasoline will be infrastructure and scale. Traditional gasoline stations are either owned by the oil companies, or are have exclusive licenses with an oil company. Primus and other players in the biogas space may be able to find success selling to white-labeled gas stations once they are producing fuel on a large scale, offering consumers the choice between oil-based gas and biogas.

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