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Eighteen million dollars in government grants are up for grabs as the U.S. Departments of Agriculture and Energy announce solicitations for biomass research and development.

This press release from USDA’s web site says the money will go to researching and developing biomass-based products, biofuels, bioenergy and related processes:

“Making these funds available represents this Administration’s ongoing commitment to promoting clean energy technologies to help diversify our nation’s energy mix in an environmentally sensitive way,” Energy Secretary Samuel Bodman said. “I am hopeful that these projects will play a critical role in furthering our knowledge of how we can cost effectively produce more homegrown, bio-based products to help reduce our reliance on imported sources of energy.”

“These grants are one of many steps we are taking to meet the President’s goals of reducing petroleum dependency,” Agriculture Secretary Mike Johanns said from South Dakota, where he was addressing the Western Governor’s Association. “They will fund essential research that not only will lead to the creation of new, sustainable energy sources, but also will create new uses and markets for agricultural products.”

The grants will go to four main areas: the development of technologies to convert cellulosic biomass into intermediaries for biobased fuels getting 45% of the money; product diversification receiving 30% percent) feedstock production, 20%; and analysis for strategic guidance getting 5%.

Each award won’t exceed $1 million. State and federal research agencies, national laboratories, private-sector groups and nonprofit organizations are eligible to submit their grant applications by July 11, 2007.

Congress’ financial watchdog, the Government Accountability Office, says the U.S. Department of Energy lacks a plan for how to match up increased biofuels production with infrastructure and vehicles to use the green fuels.

This highlight report on the GAO web site says that America’s reliance on oil poses significant economic and environmental risks. But ethanol and biodiesel could replace oil for transportation fuels. However, the government doesn’t seem to be ready for the challenge:

DOE has not yet developed a comprehensive approach to coordinate its strategy for expanding biofuels production with the development of biofuel infrastructure and production of vehicles. Such an approach could assist in determining which blend of ethanol—E10, E85, or something in between— would most effectively and efficiently increase the use of the fuel and what infrastructure development or vehicle production is needed to support that blend level. In addition, DOE has not evaluated the performance of biofuel-related tax credits, the largest of which cost the Treasury $2.7billion in 2006. As a result, it is not known if these expenditures produced the desired outcomes or if similar benefits might have been achieved at a lower cost.

The report recommends that the Secretary of Energy collaborate with public and private sector stakeholders to develop a plan that coordinates expected biofuel production with gthe infrastructure to get it into the tanks of the vehicles that will need to be built, and coordinate with the Treasury Department to make sure biofuel tax credits and grants are doing what they afre supposed to do.