The Wall Street Journal called it a fiasco, when Range Fuels suspended its operations in Soperton, Georgia in February this year before making hardly any of the cellulosic ethanol that it was expected to produce.  The grants and loans have been called welfare for the rich venture capitalists and WSJ calls for an end to stop throwing more money after bad!  The WSJ piece also notes that "no Google was created" after millions in private and public investments.  The second generation biofuels plants as they are often termed are seeking to deploy technologies that can convert non-food based feedstock to produce cellulosic ethanol.  A market for second generation biofuels has largely been created by the Energy Independence and Security Act (EISA) of 2007 which requires 16 billion gallons of cellulosic biofuels by 2022 as part of the national Renewable Fuels Standard (RFS).  The United States Department of Energy (USDOE) and the United States Department of Agriculture (USDA) have become the primary sources for providing financial assistance to new second generation biofuels ventures in the forms of grants and loan guarantees.  The USDOE has actually been banking on specific companies and technologies to meet annual goals that eventually get the nation to the 2022 mark.  Unfortunately these intermediate goals have not been met for 2010 (100 million gallons) and the expectations for 2011 (250 million gallons) are low as well.  Compliance with the RFS has been called into question by many industry groups and enforcement has been weak.  I am personally not a fan of mandated markets either, especially when targets are set without analyzing the true state of technology providers to supply the quotas.  While mandates definitely kick start a market in the short term, they limit long term growth of an industry.  That said there are plenty of reasons why we should not let the Range Fuels fiasco deter us from pursuing renewable forms of energy that can supplement the use of fossil fuels.  National security should be on top of everyone's list followed closely by rural economic development.  The renewable energy industry has to be honest with itself in terms of what it is capable of supplying in the face of competing with an extremely well developed and highly optimized supply chain of fossil fuels that has evolved over the last 100 years.  Policy makers and investors on the other hand have to realize that the renewable energy sector, especially the second generation biofuels technologies, are still in their infancy and need critical financial and policy support to achieve viable economies of scale.  The valley of death for energy technology development is also inherently very deep and long requiring significant investments and rigorous testing at various production scales, unlike a typical information technology venture.  The Renewable Energy Venture Development (REVDA) course taught by Strategic Biomass Solutions walks energy entrepreneurs in understanding the basic elements of a good energy venture and provides a framework economic developers, policy makers and investors to assess the viability of early stage ventures.  For more information on REVDA, or to respond to this article, please contact me at sarora@mta.ms or 601-960-3610.