Finally I found an article that picked up on the president’s reference to a “new kind of ethanol” and provided some good information on the potential for cellulosic ethanol. Kudos to reporter Craig Rose for his story in the San Diego Union-Tribune. Here’s just an excerpt from that article:
…Bush raised the prospect of producing ethanol from waste material, which holds the potential for making it cost effective and reduce its environmental impact. Supporters say the president’s goal is within reach.
“He said that in six years we want to have competitively priced ethanol from cellulose (waste plant material),” said Reid Detchon, executive director of the Energy Future Coalition, a bipartisan public policy group.
“What that involves is moving from small scale pilot projects to full scale commercial facilities. I might be a little more aggressive. Ethanol can make a large difference in the shorter term.”
Environmentalists see big benefits to producing ethanol from waste material compared with grains such as corn.
“With this new technology, resources to produce ethanol would be much more widely available,” said Daniel Lashof, a senior scientist at the Natural Resources Defense Council.
Lashof noted that producing cellulosic ethanol – the industry term for the fuel made from waste material – does not require fertilizer and other petroleum products.

Here’s a little bit more:
Neil Koehler, chief executive of Fresno-based Pacific Ethanol, said that the U.S. energy act passed last year sets a production target of 7.5 billion gallons of ethanol by 2012, which would be about 5 percent of the nation’s fuel supply.
He said gas-powered vehicles are capable of running on a blend of up to 10 percent ethanol without modification.
“That would be a very meaningful contribution to our energy future,” said Koehler, whose company expects to begin operating its first California plant in Madera later this year.
Koehler said that the United states is capable of producing up to 12 billion gallons of conventional ethanol a year before it would begin to strain grain supplies.
By that time, he expects cellulosic ethanol production to be commercially viable.
But the technology involved requires advances in engineering enzymes, which are used to break down cellulose.
“We’ve already reduced costs from about $5 per gallon to about 50 cents per gallon for that process,” Koehler said. “We need to get it down to about 10 cents a gallon. And the five-to six-year time frame the president mentioned, that is generally considered the time it will take.”

This is a great article and worth reading the whole thing.