Pros

Greenhouse Gas Reduction - Cellulosic ethanol reduces GHG emissions by 85% to 94% compared to petroleum-based fuels.

Cheap, Non-Food Feedstocks - Cellulosic ethanol production uses biomass feedstocks which are not suitable for human consumption. Such feedstocks include switchgrass, paper pulp, sawdust, municipal solid waste (MSW), and non-edible plant parts (corn stover, sugarcane bagasse, etc.). As these are generally all considered waste products with few other uses, the feedstock costs are low or free. In some cases it may be possible to get paid to take MSW, as these producers would otherwise pay for landfill space.

Positive Net Energy Balance - Cellulosic ethanol has an estimated positive net energy balance of 2 to 36 times input energy. (Note: there were no citations on this link from National Geographic, most other sources seemed to indicate a positive net energy balance between 2 and 12 times.)

No Crop Displacement - Fast growing “energy” crops can be grown in poor soil. This allows acreage to be added nearly anywhere without displacing food plantings in traditional farms.

Most Infrastructure In-place - There are few changes that would need to be made to widely adopt ethanol. Most automobiles available in the U.S. are Flex Fuel capable and there are roughly 2,000 stations already serving E85. While most of these stations are lumped in the Midwest, they are increasing nationwide.

Biodegradable - As ethanol is made with organic materials it is highly biodegradable making spills far less worrysome than petroleum spills. When spilled, 74% of ethanol is broken down within 5 days.

Cons

Few Commercial Plants - Nearly all cellulosic ethanol plants are in pilot plant scale and some have found difficulties transitioning to commercial scale plants.

Government Incentive Driven - Many plants being funded for construction in the U.S. have substantial government grants providing the key capital. Failure to attract private funding will slow or stop cellulosic ethanol plant construction.

Reduced MPG - Based on 2009 flex fuel vehicles, E85 miles per gallon is expected to be roughly 28.5% lower in the city and 26.5% lower on the highway. This means it takes 1.35 to 1.40 gallons of E85 to equal the mileage of 1.00 gallons of gasoline.

High Enzyme Price - With low feedstock prices, the cost of enzymes are crucial to the production of cellulosic ethanol. While there is a great deal of research in this area, the cost of enzymes per gallon of ethanol produced is $1.00 per gallon translating into a total cost of $3.00 per gallon of ethanol.

Water Absorbtion - Ethanol absorbs water, which can contaminate it as a fuel and makes it more difficult to ship through pipelines. As a result, ethanol has a shorter shelf and tank life than gasoline.

Fuel Transportation - Ethanol absorbs water and is corrosive, which make it difficult to ship through existing pipelines from the Midwest of the U.S., where most production occurs. Remedies include shipping or building dedicated ethanol pipelines, however the most likely scenario seems to involve rail or road transport. The best scenario would be local ethanol plants, with the easiest way to accomplish this through continued development of cellulosic ethanol, where feedstocks are abundant everywhere as opposed to corn or sugar.

Fueling Locations - There are roughly 2,000 E85 fueling stations in the U.S., with the majority in Illinois, Indiana, Iowa, Minnesota and Wisconsin. A U.S. E85 fueling station map and locator can be found here.