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As many on here probably already know, the enthusiasm for cellulosic
ethnanol as a major advanced biofuel pathway has really started to wane
over the past year. However, venture capitalists and the federal
government are becoming much more interested in so-called "drop-in"
biofuels that, if produced successfully at a commercial scale, would be
much more compatible with existing infrastructure than ethanol.

Here's a recent news blurb about pending DOE loan guarantees for
construction of drop-in biofuel facilities in several southeast states by
a company called Kior. Like many other biofuel start-ups, Kior has
significant venture capital backing from Vinod Khosla.

http://www.sustainablebusiness.com/index.cfm/go/news.display/id/21819