Venture capitalists betting on biofuels

EL CENTRO, Calif., March 7 (UPI) -- U.S. venture capitalists are racing to be the first to replace crude oil with biofuel.

Clean Edge, a research and consulting firm, says U.S. venture capital in clean energy was $2.4 billion in 2006, double the amount from previous year,

The New York Times reported.

The newspaper says there are hundreds, if not thousands, of start-ups in the alternative energy business. The companies are looking at everything from wood chips to algae.

One company, LiveFuels Inc., is looking at ways to grow massive amounts of algae and use its natural photosynthesis to produce biofuel. Another start-up, Prometheus Energy, has opened a plant in California that produces liquid natural gas commercially out of landfill methane gas, the newspaper said.

Energy Secretary Samuel W. Bodman said in a speech in Houston last month that this the first time that he has seen the venture capital community put sizable amounts of money into energy.

"This is real money," he said. "They are betting, if you will, that clean, safe, affordable energy represents the new innovation frontier."