This is more research. At UC Berkley, they found a way to engineer bacteria that make fuel such as diesel by themselves. Though the research is still going on to make it more productive.

This article is about some research being done at MIT to see how it might be possible to use microbes lining cow intestines to break down cellulose and lignin into sugar and make fuel from that. Such compounds are found in grass and wood chips, consequently MIT also looked into termites but they proved to be too small to generate any significant data.

This deals with Duke's efforts in going green