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"None of us, no matter what continent or island or ice cap, asked to be born in the first place, and that even somebody as old as I am, which is 80, only just got here."
- Kurt Vonnegut, Jr.

Culture Tank  
  Germs that eat garbage and produce oil.  

In the novel, the main character, Bob Kinnaird, lives on an island that supplies it's own oil through a series of "culture tanks" that create fuel oil from waste.

"They call 'em culture tanks. They have bugs -- germs -- growing in them; germs that eat pretty near anything, and produce oil as a waste product. That's the purpose of the whole business. We dump everything that's waste into the tanks, pump the oil off the top, and every so often clean the sludge out of the bottom -- that's a nasty job."
Technovelgy from Needle, by Hal Clement.
Published by Not known in 1950
Additional resources -

Bio-diesel and other fuels from organic waste have been around for a long time but almost 60 years ago, Clement had an island relying on it and creating a surplus for sale. The original impetus to research occurred in 1942, when two chemists (Harder and Von Witsch) were the first to propose that microalgae be grown as a source of lipids for food or fuel.

Thanks to Mike for writing in with the reference and the quote for this one.

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Additional resources:
  More Ideas and Technology from Needle
  More Ideas and Technology by Hal Clement
  Tech news articles related to Needle
  Tech news articles related to works by Hal Clement

Culture Tank-related news articles:
  - Samsung W7900 Show Cell Phone Digital Projector
  - Biofuel From Algae
  - Reprogrammed Microbe Makes Butanol From Cellulose
  - Bacteria Now Make Biofuel Like Oil
  - Engineered Bacteria Produces Gasoline
  - Oil from Algae - Can It Be Done?
  - Mechanical Milking Of Microalgae For Fuel Production

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Tsunami Forecasts Improved By Ionosphere Signals

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