For $9,995, your car could run on sugar and tequila

The E-Fuel Micro-Fueler, on display in New York. Click for photo gallery.

(Credit: Caroline McCarthy/CNET News.com)

NEW YORK--"Henry Ford had it right all along," E-Fuel founder and CEO Thomas Quinn declared, referring to the fact that many original Model T Ford automobiles ran on the ethanol, not gasoline. But that was before the era of Prohibition, which banned production of the biofuel along with other forms of alcohol.

Now, he hopes ethanol can have a real revival.

In a press event at Revel, a Meatpacking District restaurant that features a greenhouse-like roof and trees growing inside, Quinn and his fellow executives unveiled the EFuel100 MicroFueler. It looks like a cross between a gas pump and an old-fashioned refrigerator, it'll cost $9,995, and it'll be available for customers in the fourth quarter of 2008 (if all goes well).

What is it, exactly? It's a home ethanol refinery. Connect it to a power source and a water source, add sugar "feedstock" and yeast or discarded alcohol (yes, that could mean last week's tequila) and in a week it can produce 35 gallons of ethanol that Quinn said any car can run on.

"I'm from Silicon Valley and I've worked with some very talented entrepreneurs in my lifetime," explained Quinn, whose previous start-up Gyration was responsible for a patent in Nintendo's "Wiimote" controller. "A couple years ago, I sensed this paradigm shift that we're all feeling today." He was referring to fossil fuel shortages and the rising cost of gasoline. With gas prices well over $3 per gallon, and no real middle ground in the market between industrial biofuels (there are still only 1,200 ethanol stations in the U.S., and only three in the entire state of New York) and "moonshining" operations that can be difficult and dangerous, he saw the opportunity to create the EFuel100.

"It's almost third-grade science to make ethanol," Quinn said. Anyone in the U.S. can obtain a license to produce alcohol, ethanol included.

But ethanol, for better or for worse, has gotten a bad rap. Some have connected rising food prices to the fact that corn-based ethanol means crops are going toward fuel rather than human consumption, and some reports have claimed that ethanol's carbon footprint isn't as "green" as it appears.

E-Fuel's executives have attempted to counter this rumor by saying that its sugar-based ethanol won't hurt food prices because sugar is a surplus crop, and that sugar ethanol is inherently more efficient than corn. And it's safe to make at home, because no combustion is involved.

Throughout the press conference on Thursday, Quinn reiterated that there's nothing unusual about making car fuel in your backyard.

"We're already in the ethanol business," he explained, gesturing to the bar at the back of the restaurant, "but we're using it as a beverage drink."