Biofuel production has grown dramatically in the last thirty years. In 1980 the United States consumed only 83 million gallons of ethanol in vehicle fuel, and by 2007 this number had reached almost 6.8 billion gallons (Figure 1). Biodiesel consumption was about 9 million gallons in 2001(when statistics were first published) and increased to almost 0.5 billion gallons in 2007.¹

FIGURE 1 U.S. ethanol vonsumption and production capacity 1980-2008.

Market gains of this magnitude are significant but the promising future originally imagined by biofuels’ biggest proponents has not materialized, caught, in part, by declines in world petroleum prices and the general economic downturn. At the same time, larger questions of environmental sustainability and economic efficiency have emerged. Advanced ligno-cellulosic biofuels derived from more complex organic feedstocks like wood or grasses are being promoted as more environmentally beneficial than so-called first-generation biofuels and are seen as a way to avoid impacting food supplies and prices. Aggressive goals have been set for advanced biofuels production to be met by 2015. But the transition to large scale commercial advanced biofuels production is still some years away.²

Policies to promote the use of biofuels have lowered the cost to producers of entering the market and encouraged increased consumption of biofuels as an