It's a biofuel production scheme that makes the skin crawl – feed waste food to zillions of black soldier flies, and turn the resulting tons of fly larvae into oil to make biodiesel.

Still, New York-based EcoSystem Corp. says it's a great way to turn wasted food into something useful – and it's asking the Department of Energy for $1.75 million to prove the concept.

"The black soldier fly is a very voracious and very efficient converter of waste material," said Glen Courtright, EcoSystem CEO and president, Friday. You feed them 100 kilos of food scraps, and you end up with about 20 kilos of larvae." (For a glimpse of the larvae he's talking about, check out the company's Website.)

And those larvae can be flash-frozen and rendered into proteins and fibers for fish food and other feeds, and into oils that can be used for biodiesel The idea is to take food waste from an Ohio waste transfer station and feed it to lots and lots of flies. Those flies will lay eggs that will hatch as larvae

The larvae can be converted into oil for use as a biodiesel feedstock, EcoSystem says. It's seeking a matching grant from DOE's Biomass Research and Development Initiative to build a $3.5 million demonstration project that would use 24,000 tons of food waste from an Ohio waste transfer station to feed a "bioreactor" full of flies.

Those flies will lay eggs that hatch into larvae, Courtright said. As the larvae reach maturity, they'll exit the waste pile on ramps, looking for a good place to pupate – and that's when EcoSystem will catch them and render them into oil to be turned to biodiesel at an Adrian, Mich.-based refinery.

"It's insanely simple," Courtright said – and at commercial scales, it can be done at prices competitive with petroleum-based diesel, he promised. The pilot plant could produce between 150,000 to 195,000 gallons of oil per year, he said.

EcoSystem, which is traded over the counter under the symbol ESYM and was reorganized in December to work on its new business plan, isn't revealing how much money it has raised so far through self-funding or how much its now seeking from potential investors, Courtright said.

But beyond getting DOE funding for that demonstration plant – which EcoSystem hopes to secure late this year – the company envisions turning the massive amount of food going into landfills and decomposing into methane, a potent greenhouse gas, every year to massive use as a biofuel feedstock.

Americans dump about 26 million tons of food scraps into landfills each year, and only about 3 percent of that is being recovered today, Courtright said. Most of that goes to composters or anaerobic digesters or for animal feed.

Give EcoSystem one-quarter of all those food scraps, and it could make 100 million gallons of oil every year, he said. Add in livestock manure and other agriculture wastes and that amount could increase – particularly if the company can be paid to take it off waste handlers' hands, which is an important part of many waste-to-biofuel business plans (see Enerkem Plans $250M Mississippi Waste-to-Ethanol Plant and Biofuels and Electricity Take Out the Trash ).

EcoSystem isn't the only place where bugs are being enlisted to make biofuel. Researchers at the Department of Energy's LAB in Walnut Creek, Calif. are studying how humans might utilize the microbes inside termites' guts to capture the critters' ability to eat wood and turn it into sugar.

But as far as Courtright knows, EcoSystem is the only company looking to commercialize the fly larvae-to-biodiesel process.