US Department of Energy secretary Steven Chu and US Department of Agriculture Secretary Tom Vilsack have announced that the two agencies will be providing $6.3 million dollars for 7 projects at research institutions throughout the US to improve the use of plant feedstocks in biofuel production.

Although biofuels have fallen out of favor in the public eye recently, the federal government — led by Secretary Chu — is still forging ahead with providing money to research next generation biofuels.

“Part of the solution to the energy problem will be home-grown energy crops,” said secretary Chu in a statement. “These projects will help us unlock the true potential of advanced biofuels, decrease our dependence on foreign oil, and create new jobs and a thriving biofuels industry in America.”

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Today at Noon, a Shell service station in Ottawa, Ontario will quietly begin selling cellulosic ethanol blended into regular gasoline. The biofuel is made locally from wheat straw, and as far as we know is the first time cellulosic ethanol has been made publicly available.

The new fuel will only be available for one month, starting on June 10th, but it’s a major step forward for the production of advanced biofuels. All gasoline purchased at the Ottawa station will be a blend of 10% cellulosic ethanol and 90% gasoline (CE10).

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Yesterday was a big day for the biofuels industry. President Obama issued a presidential directive to the USDA to expand access for biofuels that includes $800 million to fuel biofuels research. The purpose of the directive, in part, is to aggressively accelerate the investment and production of biofuels. What the directive does not do, is set dollars aside to help improve the infrastructure for higher ethanol blends including E85 although it encourages production of more flex-fuel vehicles.

This announcement appears to be serious, at least as serious as a government proclamation can really be– they created another committee to oversee that the presidential directive. The USDA, EPA and DOE will form a Biofuels Interagency Working Group with a mission to increase energy independence in part through the development of the nation’s first comprehensive biofuels market development program.

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This according to the Biotechnology Industry Organization as they presented key findings from a Bio Economic Research Associates (bio-era™) research report entitled U.S. Economic Impact of Advanced Biofuels Production: Perspectives to 2030.

The research analyzed how the growth of the advanced biofuels industry will impact four areas critical for recovery of the U.S. economy: job creation, economic output, energy security, and investment opportunity. The report forecasts that 190,000 new direct industry jobs will be created, with $37 billion dollars in direct economic growth, by 2022. 

The impact throughout the economy could be as much as $148.7 billion, creating 807,000 jobs within the same 2010-2022 period. 

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Beyond these entrenched extremes, ranging from wild optimism to abject skepticism, comes the real heavy lifting - understanding there are significant hurdles inherent in getting second generation biofuel from the lab into full-scale sustainable commercial production, but seeing those hurdles as challenges to be overcome, not as roadblocks from which to retreat, and working to bridge the gap from current reality to potential promise.

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On Wednesday, BP anounced a joint venture with Verenium to build the world’s largest cellulosic ethanol facility.  BP’s total investment—now $112.5 million—will be the largest by an oil company in advanced, non-food-based biofuels.

The Florida-based plant would be 25 times larger than Verenium’s existing (and operational) cellulosic ethanol facility in Louisiana, which began operation earlier this month and is expected to produce 60+ million gallons of cellulosic ethanol per year when at full capacity. This new, larger facility is schedule to break ground in 2010 and commece operations in 2012.

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