When I first read this I thought about my grandfather. He has some vineyards and obtains spirit by the old method of distilling wine, something which is not precisely cheap, known as orujo or grappa. However, making alcohol for cars is different. Using the same principle, albeit at a different level and speed, you can now mix sugar, water and yeast to produce ethanol in your backyard with the 35-gallon capacity MicroFueler, from E-Fuel, a start-up from Silicon Valley.

Brew your own fuel? E-Fuel claims you can obtain about 1 gallon of ethanol from 10 gallons of sugar and the price of the device ($9,995) can be offset by federal, state and local credits. They also claim you can obtain raw sugar below $1 through a system of carbon trading coupons.

Thomas Quinn, founder and CEO of E-Fuel, claims that this ethanol can be used straight in your car, without further modifications, or even mixed 70/30 percent with water or gasoline.

[Source: Popular Mechanics (thanks to Matt for the tip)]