So what's the deal w/ biofuels and all those promises of cellulosic ethanol from the Bush years?
Here's a great post that explains what has happened. As a biological engineer and native Brazilian I couldn't help but to follow the biofuels talk in the US. People from Sloan (the MIT business school) were paying a lot of attention but the chemical engineers here weren't buying it. What was going on?
Energy is a commodity product, and as such is immune to branding or hyping. How immune? Think about issues associated with the oil brand now: terrorism, wars, dictatorships. Yet we still buy it at the pump w/o a second thought, because we need that energy and we don't particularly care where it came from. People like Friedman are trying to change our minds, but greenwashing really only works on people with disposable income. Meanwhile the color of everyone's exhaust is still clear, making it simply too easy to ignore.
So what can you gain from branding energy? Subsidies, for one. Technology investment - and that's a good thing. But you can't change the fact that it's a commodity market (a few buses and vans running biodiesel around the country notwithstanding). And in a commodity market the lowest-cost supplier wins, regardless of how sexy other suppliers can make themselves. For all it's problems, petroleum is still amazingly cheap and useful, and any alternatives have to better that mark to succeed in the marketplace. Best of luck to those who are trying for real.