Secretary Samuel Bodman, Department of Energy: "The goal is to achieve transformational breakthroughs in basic science that will help us chart a path to biologically based production of fuels. The further goal is to get these processes developed to make it so we can produce large quantities of fuel at low cost."

That work likely will include research on cellulosic ethanol. (corn stalks blowing) The driving force behind this innovative method of fermentation is that it uses all the sugar locked up in the woodier parts of plants. This would open the door to using other products like waste paper and sawdust.

Bodman also announced it will accept applications for 16 grants totaling $8.6 million to be used for expanding the E-85 infrastructure. Of the 170,000 service stations in the United States only 1000 sell the special blend of gasoline containing 85 percent ethanol. When combined with funds from private industry there will be $25 million devoted to increasing the reach of E-85.

The idea of using ethanol as fuel for the nation's estimated 130 million cars has been around for decades, but the industry didn't really take off until tax incentives were implemented in the late 70s. In the future, Bodman sees a different subsidy structure.

Secretary Samuel Bodman, Department of Energy: "I would hope that we could continue to play a role but at some point in time phasing out the subsidies and getting an industry that is free standing and effective."

"I think what one ought do is look at an approach that encourages all bio-products, whether it's butanol, whether it's ethanol, whether it's biodiesel. And so, that's my own view, but as I said before the President will have to make a judgement."