Realities of cellulosic ethanol commercialization

The first commercial cellulosic ethanol plants are expected to come online in 2014 in North America.  With the advent of this expanded ethanol capacity, where will this ethanol go with a level to declining and restricted gasoline market in the U.S.?  At the same time, a more diverse set of products are entering the market.  Already, other fuels such as drop-in gasoline and diesel are being produced while the market is also calling for additional products like jet fuel and various chemicals currently not limited by market restrictions, only product specifications.

What will drive success in these endeavors?  Will it be open market access?  Or will it be cost competitive operations?  Or will it be something else?  If historical drivers are any predictor of the future, then we can expect that (1) feedstock cost, (2) operating expense, (3) capital expense, and (4) technology performance will win the day.  For example, there is a reason that dry fractionation of corn is used for food production: it provides a reasonable separation of the three major corn components, albeit imperfect, for producing corn grits used in a variety of finished food products.  That doesn’t mean that it is the best selection for a non-food biorefinery.  In much the same way bolt-on, co-located, and greenfield cellulose to ethanol plants have their own set of advantages – or – disadvantages.  How do they appear to stack up today in a world of shrinking gasoline demand and increasing production capacity?