It sounds like we are getting a bit closer to cellulosic ethanol. 

A new study published by a team of USDA Agricultural Research Service  and the University of Nebraska scientists revealed the on-farm economic costs of producing switchgrass for cellulosic ethanol.  The study focused on both the farm-scale production costs of switchgrass, and the economic costs of producing switchgrass biomass on commercial fields.  

In short, “switchgrass, when used for cellulosic ethanol, yielded over five times more energy than required to produce the fuel.” 

The study worked like this; ten farmers were contracted to grow the crop in Nebraska, North Dakota and South Dakota.  Each farmer recorded all costs for producing the crop from including seed, fertilizer, equipment and labor costs. The total baled biomass yields were then recorded for each farm. 

Switchgrass average production costs were $60 per ton.   Interestingly two of the farmers in the study had previous experience growing the crop and were able to limit their costs to only $39 a ton.  Five farmers (including the two previously mentioned) limited production costs to $50 or less per ton.

Based on the $50-per-ton figure, and assuming a conversion efficiency of 80 to 90 gallons per ton, production cost of cellulosic ethanol from switchgrass would be around $0.55 to $0.62 per gallon. It is believed that farmers in other parts of the country could probably achieve the $50 per ton cost also once they gain production experience with this crop. It is also believed that production costs will decline additionally as new, machinery is  developed to for this new crop.

Here is some additional USDA research about Switchgrass:

Switchgrass: Bridging Bioenergy and Conservation

Scientists Turn Genetic Keys to Unlock Bioenergy in Switchgrass

Switchgrass Economics