Unfortunately The Paper  is closed source. I can't find much information; no comparison with existing, chemical synfuels processes (like methanol via syngas [CO]).
There's a serious problem with the general idea: "clean" CO2 is hard to get. You can get concentrated (>10%) CO2 streams from a power plant, which could work for synfuels, but ultimately that's still transferring fossil carbon into the air (if more efficiently). The "nice" idea is to capture CO2 from the atmosphere (I think they are implying this?); this gives you a carbon-neutral cycle (CO2 => fuel => CO2). This is difficult because CO2 in the air is so dilute -- 0.04% vol., or 0.8 grams/meter^3.
Can you get CO2 from the air? There's research in this; the APS assessment  thinks it could be done at around $600-800/tCO2, which translates to e.g. $7/gallon gas equivalent of methanol, just for the carbon. The process uses an inorganic base (NaOH) to scrub CO2, so maybe you'd think you could genetically-engineer superbacteria to do better. But the absorbent is not the bottleneck -- it's the extreme volume and flow of air that needs to be brought to the absorbent, over an insanely large surface area. The scale is visualized in  figure 1.2 (http://i.imgur.com/Y0D2f.png): a very small, 10^6 ton CO2/year capture plant is designed as a 1km * 1km grid of rows of giant, sucking fans. And the NaOH process isn't particularly inefficient -- it captures 50% of the CO2 in air.
Some more about atmosperic CO2 capture from David Keith  and his startup ; this was featured in the Economist this month . Wikipedia is a starting point for synfuels in general ; George Olah advocates a methanol/dimethyl ether economy using CO2 recycled from air .
Starting from the other end of things, it clearly is possible to synthesise organic compounds from atmospheric concentrations of CO2 as nature does it already, the question is what sort of yield you can get.
My understanding is that using algae to do this via photosynthesis is limited by the fact that with wild strains you need to harvest and extract the biomass before you can get at the fuel, and you need to spread things out in a very thin film to get enough sunlight. Using modified strains helps solve the first problem, using (more efficient) synthetic photovoltaics, or another power source, with a process like this potentially helps solve the second.
To respond to another reply to this post, I don't think complex structures that maximise surface area would be necessary - you could just bubble air through the tank. As mentioned above, bubbling CO2 rich waste gasses from a power plant would likely be even more efficient.
You could do it effectively if you could create some massive dendritic type structure with a huge surface area of flat panels to absorb CO2 directly from the atmosphere. Since the CO2 concentration is so low you would need vast areas of these CO2 farms and so you would have to put some effort into making them look artistically pleasant to avoid public opposition.
The construction costs would be incredible, the only solution would be some sort of von-Neumann type nano-machines that could manufacture copies of themselves and gradually 'seed' the system over a large landmass.
Liquid fuel would be easily tapped from the trunk of these structures - although persuading people to consume a high colorific value syrup type liquid produced by bacteria on their pancakes could be tricky (unless they were Canadian)
Somebody already tried this but had issues monetizing after multiple governments nationalized it. From there it suffered the tragedy of the commons. I don't think something like this would work unless the rights could be secured.
Suppose you have about 1 square meter of solar cells on the roof of your car. From Wikipedia, a typical solar PV installation in the US or Europe gets 1kWh/sqm/day (depending on latitude, of course). How far will 1kWh take you? Let's see, gasoline contains about 37 kWh/gal (US), which at 40mpg is a little over 1 mile/kWh.
So if your electricity-to-fuel conversion process is 50% efficient, you'll get about half a mile on a day's charge.
Exactly right. The premise that this technology would be integrated into cars is ridiculous, and my guess is it was added by the "journalist". This technology would most likely be used in places where feeds of concentrated CO2 are already available, such as coal power plants, water treatment, waste management, compositing, etc., and the fuel would be sent off to be distributed through fuel stations just as it is now.
The only impact this might possibly have on automobile design would be to try to recuperate the carbon from the exhaust using some of the power generated from the combustion to convert the exhaust CO2 into formic acid, to be exchanged for fuel in the next refueling. My guess is it's not going to pay to do that though.
It is difficult to get hard numbers, but probably the limiting resource is the energy in form of electricity, not the availability of carbon dioxide. So, if this is a good idea, the producing plant should be near a cheap electricity plant.
Good point, but it does end up depending on the vehicle. A 6 m^2 15% efficient array parked outside in a desert climate could generate 5.4kWh a day and over 37kWh a week. GM's EV-1 had efficiencies of over 6mi/kWh. As such, a vehicle could be built that could go 32 miles a day off sunlight alone, using ho-hum $1/W solar cells and without any tracking.
Of course, at that point, you don't need to futz with bacteria and internal combustion, when batteries store and release that energy much more efficiently.
32 miles a day... in Arizona... in a car 80% of whose upper surface area is solar cells, leaving little room to see out. I can imagine some enthusiast building one, but I don't think it's a mass-market product.
None of this, I hasten to add, is to impugn the idea of using bacteria to fix CO2. It's just that the idea of doing it in your car, driven by solar cells on the roof, is silly. The numbers just don't pencil out.
(And as you point out, it's doubly silly since you would use batteries anyway.)
Reminds me of a TED talk, about how we'll probably have to eat a lot of lower-trophic-level food in the next few decades, as the population of Earth increases -- stuff like crickets, and other insects.
What's wonderful about the two butanols they are making is that they are near drop-in replacements for gasoline. If this scales up, this would make an excellent alternative to expensive fuel deliveries for isolated places.
Yet another encouraging bridge between the grid and the internal combustion engine.
Or, you know, you could just use the electricity to convert water to hydrogen (itself a usable fuel). How much of the energy required for this reaction is actually coming from the carbon / atmosphere? I would guess very little.
The thing is that hydrogen has very limited utility as a fuel. Compressing it is as energy-intensive as producing it in the first place, and even compressed, it takes up a very large amount of volume. A pressure vessel identical in volume to a standard 15gal gas tank would hold less than 2.5 gge (gasoline gallon equivalents) of 700bar compressed hydrogen.
There are all sorts of storage media under development to get around this hydrogen volumetric density problem, but none are much closer to market than this butanol project. At the very least, an existing vehicle fleet would require significant engine modifications to run on hydrogen (not to mention fuel storage and delivery system modifications).
I have never heard of this organism as a human pathogen in my bacterial pathology classes, so it's at least not a common one. My guess is if it likes a liquid environment rich in formic acid, it might be more at home in your gut than in your lungs, but it would likely be out-competed by your existing intestinal flora, unless maybe you just killed them all off with an antibiotic regimen or some-such.
edit: since I am being downvoted, I will state it explicitly. We are creating a simple, resiliant lifeform that grows and reproduces as long as it can eat carbon dioxide, of which there are essentially unlimited supplies on earth. We know from observing complex fragile invasive species that are brought in to new environments with unlimited food and no controls on growth what happens. They reproduce and grow until they run out of their food source. For example, bringing cats to australia to control rodents. Releasing this bacteria, which is neither complex nor fragile, into the wild has a reasonable chance of consuming vast amounts of CO2, producing petrochemicals as a waste product. The easily predictable outcome of this release is the elimination of nearly all life on the planet and creation of a toxic atmosphere similar to that on Titan.