Oil futures first reached $100 a barrel in January 2008, marking a quadrupling of price in five years since 2003. Oil trades now around $95 a barrel.
The push for more ethanol production comes amid federal requirements that the petroleum industry mix 36 billion gallons of the additive into the nation's fuel supply by 2022.
The Environmental Protection Agency has required that 16 billion gallons of that ethanol be cellulosic, providing another incentive for companies to pursue cellulosic research. Only about 25,000 gallons of cellulosic ethanol were produced last year, but 10 million gallons are expected in 2013.
"Suddenly technological development started to occur," said Adam Monroe, president of Novozymes North America, which makes enzymes used in cellulosic production.
Scientists found enzymes that more efficiently break down the plant material and better yeast strains to convert sugars to alcohol, clearing the way for cellulosic production.
About 70 cellulosic projects are under way, reflecting billions of dollars of private investment.
In Iowa, the nation's leading corn producer, two cellulosic plants are under construction that will use corn plant leaves, stalks and cobs known as corn stover.
Near Nevada, a small Iowa farming community about 40 miles north of Des Moines, DuPont is building a $200 million factory that when completed in 2014 will be the nation's largest cellulosic ethanol plant, capable of making 30 million gallons a year.
Scientists said it's a major step forward.
“We had lab experiments. That's all we had five years ago,” said Jan Koninckx, a chemical engineer and DuPont's global business director for biofuels.
The DuPont plant will work with 500 local farmers to collect more than 375,000 tons of corn stover annually.