"Do you guys think biofuels and biomass production have a chance in the short term?"

A couple of years ago I believed if given the right incentives we could increase ethanol production from the then production levels of around 1.8 billion gallons to 10% of the US gasoline demand over the next decade.

We have basically reached that level with the bulk of the expansion occuring at the peak of the credit bubble. Over a three year period production capacity went from just over 4 billion gallons to last January's level of 10.5 Billion gallons.. and when you include the shuttered plants.. almost 12.5 billion gallons with still another 2 billion gallons under construction according to the RFA site.

http://www.ethanolrfa.org/industry/statistics/#A

So we now have the capacity to convert grain into ethanol across the whole country at the 10% level... If all the plants were operating.. 14.5 Billion gallons of capacity would utilize somewhere just over 5.27 Billion bushels.. as noted not all of the capacity is "online" as the economic downturn has ravaged some in the industry harshly.

The USDA forecasts that about 4.2 billion bushels will be utilized this year for ethanol production.. which should pencil out somewhere around... 11.5 billion gallons.. give or take.

If we can ever get the crop in.. I do believe we will have enough production this year.. thanks to record yields and a near record production.  However it was a good year.. in order to maintain this level there will have to be some adjustments in the crop mix.. more feed grains.  We can expect an upward sloping trendline in yields over time but from year to year there will be ups and downs.

Within the existing ethanol industry we should have the ability to capture the oil from the corn which could also be used in biofuel production or something else.. also our conversion factors will have room to improve.

The next big hurdle will be cellulosic.. the grain ethanol buildout has gone faster then expected...which is part of the solvency problem.. however the cellulosic or 2nd generation ethanol production has progressed slower.  I believe that society in general can do a better job of utilizing it's trash for fuel.. which could be some of the easy pickings.. cellulosic material that is already centrally located.. seperation is an issue but people pay to have their trash hauled away anyway so part of the economics is solved...not all of it though..yet. 

Whether further expansion comes from wood, or switchgrass, or ??? is yet to be determined.

I don't see the grain ethanol industry exploding much beyond the general land base today... yes there are 30+ mln acres in the CRP but I think most of that will stay put.  I would promote the harvesting of the grass from that CRP land for cellulosic ethanol as a further buildout of existing grain ethanol facilities.  Half way through the conversion process grain as well as cellulosic ethanol can join a single production stream.  This should be a symbiotic realationship that can further add efficiencies.  Also I believe this is what is good for the land.. as you can maintain most of the benefits of the CRP in existing grass.. increase the revenue stream for the landholder.. reduce the costs for the gov't.. to someday.. pay the bills. 

Maybe you harvest a third or half of a CRP quarter every year.. strips.. etc.. to allow the most favorable wildlife impacts.. so again most all of the benefits of the CRP could be maintained.. as well as adding real jobs and real tax revenues to the land base.

I don't see any of this in the current Cap and Trade / high energy scheme and device.  I don't see how you build a "green economy" around the premise of high energy prices.  I think as per my previous post that high energy prices are "problem enough."

So far it appears that the current administrations "green jobs" have been fantasy.. If under Cap and Trade you envision maintinance workers at wind farms (where electrons are produced at wind speeds above 7 mph... something which occurs at best maybe 33% of the time...) replacing all the workers in the Coal for electricity economy.. including the workers at Cat who build the heavy equipment to mine the resource, the railroads who haul it and the utility companies that generate the power..  I just don't see that as a net jobs gainer... and I don't see that model working... aka look at the jobs numbers.

So I believe we are going to have to refreshen our thinking about the whole energy economy and "get real" about our solutions.  One of the great concerns is Energy invested on Energy Return.. and as the costs of energy continue to increase over time... this could be a real headache in the future.  Again that is what is so great about the grain ethanol industry so much of what was needed... for instance Concrete Grain silos built in the 1950's when Crude costs was a couple of dollars per barrel.. which still have another 50 years of life left if maintained properly... etc.  These are the "out of the box" thinking that must continue... It is going to take a coordinated effort from policy to engineered solutions to an assessment of the realistic use of resources.

jmho.