One researcher calculates that cows from two large dairies could fuel all public buses in a medium-sized American city.

Institute director Eric Leonhardt says he's had his eye on the dairy herd as a source of transportation fuel for a long time. He calls it "cow power to horsepower."

Leonhardt says the challenge is to cost-effectively remove impurities from the manure-derived methane. "When the gas comes off the digester, it has not only methane in it - 60 percent -- it also has carbon dioxide -- 40 percent, roughly. And it has a trace of hydrogen sulfide," says Leonhardt. Those impurities rapidly corrode engine parts.

Powering vehicles with clean natural gas is not new. Nor is generating fuel from renewable sources. But cars and trucks that run on methane are still a novelty in the U.S.

However, since last year, biogas has gotten renewed attention from the Obama Administration as part of a larger push to promote domestic renewable energy.

By Cody Ellerd, NWsource The Viking 32, built by students and faculty at Western Washington University, runs on biofuel.

The economics of methane-powered cars

The U.S. Department of Energy gave the Vehicle Research Institute a $500,000 grant to improve the biogas refining process and then demonstrate whether the fuel can be cost-competitive in cars. Leonhardt says a lot depends on the price of traditional fossil fuel.

It would have to climb higher to give consumers a financial incentive to switch. At present, the average price of gasoline in the United States is well below Leonhardt's barely-competitive threshold of about 75-cents per liter.