The National Renewable Energy Laboratory and Arkenol Holdings have signed a cooperative research and development agreement to develop "better bugs" for converting cellulose to ethanol. The parties will work to develop superior strains of a patented genetically altered bacterium that could result in faster and more efficient fermentation of rice straw to ethanol. The bacterium, Zymomonas mobilis , can expand by up to 40 percent the amount of cellulose that can be converted into ethanol. If successful, the bacterium would be put to use at a planned Arkenol refinery in Sacramento, California. It may also assist in reducing the cost of bio-based chemicals and products.