The appealing prospect of throwing money at American farmers rather than Middle Eastern sheiks is just one reason that ethanol–the 200-proof moonshine used in early versions of Ford’s Model T–has come back into favor. This year, U.S. automakers will churn out a million flexible-fuel vehicles, and the number of ethanol-stocking gas stations will increase by a third, to about 1,000.

The catch? Most ethanol currently produced in the U.S. is made from corn kernels in a process that consumes significant amounts of fossil fuels, in everything from fertilizers to gasoline for farm equipment.

We can do better, says Berkeley’s Daniel Kammen, who sees corn-based ethanol as a “transition” fuel: “To have ethanol make a dent in gas consumption and global warming, we’ll need a wide-scale switch from corn to cellulosic ethanol,” a fuel made from switchgrass, wood chips and agricultural waste such as corncobs and stocks.

Today the cost of the enzymes needed to manufacture the fuel is high, although the solution to that problem may be very, very small. “Termites have microbes in their hindguts that they put to work to convert plant cellulose into carbohydrates,” says Eddy Rubin, director of the DOE’s Joint Genome Institute. “We’re sequencing the DNA of those microbes so that we can eventually consider bioengineering new organisms to secrete these enzymes.” And, essentially, run our cars on bug juice.