Picture this: A congressional staffer laden with a massive, multivolume set of books containing the president’s 2011 budget. We all saw this a couple weeks ago, when Mr. Obama released his blueprint for the government’s next fiscal year.
 
It’s a ridiculous document, not because of its roadmap of how to spend some $4 trillion in public funds, but because no one is going to read the thing. All four volumes are 2,450 pages long. The set weighs 10 pounds. Anyone in his right mind is going to use the online version. But the White House orders the budget printed every year, mostly so news photographers will record the image I mentioned. After all, staffers carrying huge documents around make for good Page One art. Your government in action, doing the hard work of, well, of whatever is in that massive document that no one is going to read. 

The budget is printed a stone’s throw from Union Station in Washington, D.C., at the Government Printing Office (Proud motto: “Keeping America Informed”). The Printing Office, five blocks from the Capitol, is the largest printing facility in the world and encompasses the U.S. Government Bookstore, where shoppers can find such intriguing reads as the proceedings from “The Thirteenth International Conference on Computerization of Welding.”

It’s not much of a page-turner, but it’s what these pages can be turned into that’s exciting.

Paper, of course, is made from plants. Most paper comes from wood pulp, though it sometimes can be made from linen. U.S. bank notes are printed on 100% cotton. All of these materials share a common property: Each contains cellulose, a sugar found in the cell wall of plants that can be converted into ethyl alcohol, a clear substance most people know as ethanol.

Which brings me to Fiberight, a Maryland startup that has big plans for all the paperwork Washington generates. Its idea is to turn the budgets, bills, working papers, reports and everything else made of paper and convert it into cellulosic ethanol. According to its website, “Fiberight has leveraged the best innovations and technology from the waste and irsofuel industries for a new, integrated approach to solving the challenge of creating a cost-effective, sustainable, and practical biofuel product.” It can derive 85 gallons of biofuel from a ton of useless trash — a remarkable figure given that a ton of corn, a perfectly good food crop, yields only 95.2 gallons.

Writ large, Fiberight’s process could produce 10 billion gallons of fuel from the 170 million tons of trash U.S. citizens generate each year. That’s more than 1,500 times the government’s current mandated cellulosic ethanol output quota for 2010 and more than half the output expected in 2022. (The 2010 figure was just revised: See my recent article about it and learn about another company that’s going to benefit from the cellulosic ethanol boom.)

#-ad_banner-#In other words, Fiberight has found a way to actually get something useful out of Mr. Obama’s budget. (Sorry, I just can’t resist sometimes.)

Problem: Fiberight is privately held. You can’t buy stock in it.

Which brings me to Cellic CTec2.

This is not, admittedly, a brand name that rolls easily off the tongue, but this Novozymes (OTC: NVZMY) product is the backbone of the Fiberight business model. When Fiberight said it had leveraged “the best innovations and technology from the waste and biofuel industries,” it was talking about this enzyme. CTec2 can produce cellulosic ethanol for less than $2.00 a gallon, which is roughly equal to the cost of producing gasoline. The enzyme, which has taken 10 years to develop, will be used in cellulosic ethanol plants that are expected to go online next year.

Readers of my Government-Driven Investing newsletter have read my latest research into the biofuel arena and heard me discuss the potential gains to be earned as the energy industry moves closer to the inevitable green future. As Washington produces new legislation to support the green-energy future — and as Fiberight promptly turns them into E85, a mixture of 85% ethanol and 15% gasoline — investors who latched onto the companies that control the key technologies — like Novozymes — are likely to be richly rewarded.

Let me be clear: No part of this article is science fiction. Fiberight is right now driving a cellulosic-ethanol-powered Chevy HHR around Washington to demonstrate the technology. Novozymes just unveiled CTec2, which, incidentally, was developed with a $29.3 million grant from — wait for it — none other than the U.S. federal government.