Over at The Energy blog they report that:
It could take some of the pressure of corn for ethanol in the medium term. The more you look at it, it seems to me that may be trees could be the one of the best biofuel sources, if they are managed properly.
The U.S. Department of Energy (DOE) on May 1 announced that it will provide up to $200 million, over five years (FY'07-'11) to support the development of small-scale cellulosic biorefineries. This funding announcement seeks projects to develop biorefineries at ten percent of commercial scale that produce liquid transportation fuels such as ethanol, as well as bio-based chemicals and bioproducts used in industrial applications