In the Cato-at-Liberty blog post "Wishful Thinking on Cellulosic Ethanol," Indur Goklany, author of the Cato book The Improving State of the World, writes: "If cellulosic ethanol proves to be as profitable as its backers hope, farmers will divert even more land and water to producing the cellulose instead of food. All this means we'll be more or less back to where we were. Food will once again be competing with fuel. And land and water will be diverted from the rest of nature to meet the human demand for fuel.

Wishful Thinking on Cellulosic Ethanol
Supporters of ethanol, stung by the backlash over its unintended but foreseeable consequences (see, e.g., here and here), namely, increasing hunger due to a run-up in global food prices and increased threats to biodiversity, now tell us that cellulosic ethanol will come to the rescue. The theory is that cellulosic ethanol, which is still in the research and development phase, would be produced from non-edible plant material, e.g., switchgrasses, crop residue and other biomass that is not currently grown or used as edible crops. Thus, it is implied, it would have no effect on food prices.

http://www.cato-at-liberty.org/2008/05/01/wishful-thinking-on-cellulosic-ethanol/