Twenty-five years ago today, the first compact disc -- a joint development by Sony (NYSE:SNE) and Royal Philips Electronics (NYSE:PHG) -- was created, to relatively little fanfare.

Yet for those of us who are at least 30 years old, this was a seminal event. In time, it not only encouraged many of us to replace our aging cassettes and vinyl records, it also spurred consumers to purchase more music because of the improved sound quality that CDs offered. I might also add that the technology allowed users to repeat their favorite songs quickly and effortlessly, and even gave them the freedom to program the songs in the order they wanted -- a luxury my 8-year-old daughter takes for granted as she incessantly plays her favorite songs from Disney's High School Musical on the family iPod over and over again.

I mention this little history lesson because I just learned that researchers had achieved another technological milestone that, I believe, investors will look back at in 25 years as equally important. It was just reported in a recent issue of Science: Scientists from the J. Craig Venter Institute have completely transformed a species of bacteria into another species by transplanting its complete set of DNA. In short, they have created an artificial life form. And just as the CD revolutionized the music industry, this advance could transform the oil industry and might have profound implications for companies such as ExxonMobil (NYSE:XOM), ConocoPhillips (NYSE:COP), and Chevron (NYSE:CVX).

In its simplest form, the research offers proof that synthetic biologists might soon be able to manufacture designer bacteria that can be made to do a lot of very useful and unique things. For instance, new bacteria might be made that could bioremediate old toxic landfills (the new bacteria would just eat the toxic chemicals and render them inert); create chemicals and textiles without the use of industrial solvents; and, perhaps most significantly, efficiently convert cellulosic material into ethanol or other biofriendly fuels. This last application implies that a variety of cleaner fuels might eventually be produced in a manner that would make their price competitive with fossil fuel.

Recall that earlier this summer, BP (NYSE:BP) made a major investment in Synthetic Genomics -- Craig Venter's private synthetic biology start-up company -- in the hopes that just such a breakthrough was possible.

It's still too soon to know whether designer bacteria will transform the energy industry to the degree that CDs affected the music business, but history suggests that this promising new field is worth keeping an eye on, because just as Sony and Royal Philips were able to parlay their patents and early products into a competitive advantage in the commercial marketplace, BP might be able to do the same thing with synthetic biology.

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Fool contributor Jack Uldrich recently purchased a Romeo Void cassette at a garage sale for 25 cents. Unfortunately, he failed to note that his car doesn't have a cassette player. He does not hold positions in any of the companies mentioned in this article. The Fool has a strict disclosure policy.