Growing a fungus in some of the leftovers from ethanol production can save energy, recycle more water and improve the livestock feed that's a co-product of fuel production, according to a team of researchers from Iowa State University and the University of Hawaii.

"The process could change ethanol production in dry-grind plants so much that energy costs can be reduced by as much as one-third," said Hans van Leeuwen, an Iowa State professor of civil, construction and environmental engineering and the leader of the research project.

The Iowa State project is focused on using fungi to clean up and improve the dry-grind ethanol production process.

That process grinds corn kernels and adds water and enzymes.

The enzymes break the starches into sugars.

The sugars are fermented with yeasts to produce ethanol.

Van Leeuwen estimated it would cost $11 million to start using the process in an ethanol plant that produces 100 million gallons of fuel per year.

But, he said the cost savings at such a plant could pay off that investment in about six months.