Displacement of petroleum by fuel ethanol is approaching 3% of the liquid transportation fuel used in the United States. Expanding ethanol to replace more than 10% of fuel needs will require development of additional and lower-cost feedstocks. Only lignocellulosic biomass is available in sufficient quantities to augment starch as an ethanol feedstock source. As discussed previously, corn fiber and corn stover are potential sources of lignocellulosic biomass for fermen­tation. Other possible feedstocks are agricultural residues such as wheat and rice straws and sugar cane bagasse, energy crops including switch grass and softwood trees, and waste materials such as pulp and paper sludge and recycled office paper. The capacity to process and ferment even one of these categories of biomass would significantly increase production of ethanol; however, practical aspects of collection and storage must be addressed for many of these resources.

Several technological constraints limit fermentation of biomass feedstocks. Lignocellulosic biomass can be pretreated and enzymatically hydrolyzed to yield a mixture of sugars including glucose, galactose, arabinose, and xylose [32]. However, hydrolytic enzymes are inefficient and expensive. More-effective pre­treatment methods, as well as active and cost-effective enzymes, are needed for an economical process. As mentioned previously, microbes that efficiently fer­ment multiple sugars to ethanol must be developed in order to convert biomass to ethanol. Fermenting microbes also must tolerate the inhibitory compounds generated during biomass hydrolysis, or alternatively, cost-effective methods for inhibitor abatement must be in place. A study comparing dry-grind production of ethanol from corn and ethanol produced from corn stalks concluded that producing ethanol from corn stover would cost $1.45 per gallon compared to $0.96 from corn starch [33]. Despite these obstacles, one company, Iogen Corp. (Ottawa) has begun to produce ethanol from biomass.