"One of the goals of this initiative is to accelerate research and make "cellulosic ethanol" cost-competitive by 2012, offering the potential to displace up to 30 percent of our nation's current fuel use by 2030. The goal of the solicitation announced this week is to demonstrate that commercial biorefineries can be profitable once initial construction costs are paid. There is a $100,000,000 cap on any single-demonstration award, and projects are required to show a 60/40 (industry/government) cost share."
When you take the total annual cellulose from woodlands in the U.S. & do the numbers it doesn't go very far. Especially when you are trying to replace more than 22,000,000 barrels/day of petroleum products. A lot of other energy sources (solar, wind, biomass, geothermal, hydro, methane hydrates, nuclear, etc.) are needed to make much of a dent. Conservation needs to play a very important role also. Still once peak oil production comes it won't be pretty.