||High petroleum and gasoline prices, concerns over global climate change, and the desire to promote domestic rural economies have greatly increased interest in biofuels as an alternative to petroleum in the U.S. transportation sector. Biofuels, most notably corn ethanol, have grown significantly in the past few years as a component of U.S. motor fuel supply. Ethanol, the most commonly used biofuel, is blended in more than half of all U.S. gasoline (at the 10% level or lower in most cases). However, current biofuels supply of 6.8 billion gallons only represents about 4% of total vehicle fuel demand. The Energy Independence and Security Act of 2007 (EISA, P.L. 110-140) requires ever-larger amounts of biofuels produced from feedstocks other than corn starch, including sugarcane, oil crops, and cellulose, and promotes the development of these fuels. EISA requires the use of 36 billion gallons of renewable fuels annually in 2022, of which only 15 billion gallons can be ethanol from corn starch. The remaining 21 billion gallons are to be so-called advanced biofuels. The previous RFS in the Energy Policy Act of 2005 (P.L. 109-58) required the use of only 7.5 billion gallons in 2012, increasing to an expected 8.6 billion gallons in 2022, of which only 250 million gallons of cellulosic biofuels would be required. Although EISA has set the goal of significantly expanding biofuels supply and use in the coming decades, questions remain about the ability of the U.S. biofuels industry to meet the rapidly increasing mandate. Current U.S. biofuels supply relies almost exclusively on ethanol produced from Midwest corn. During the 2008 crop year, 31% of the U.S. corn crop is projected to be used for ethanol production. Due to the concerns with significant expansion in corn-based ethanol supply, interest has grown in expanding the market for biodiesel produced from soybeans and other oil crops. However, a significant increase in U.S. biofuels would likely require a movement away from food and grain crops as feedstocks. Other biofuels feedstock sources, including cellulosic biomass, are promising, but technological barriers make their future uncertain. Issues facing the U.S. biofuels industry include potential agricultural feedstock supplies, the associated market and environmental effects of a major shift in U.S. agricultural production; the energy consumed to grow feedstocks and process them into fuel, and barriers to expanded infrastructure needed to deliver more and more biofuels to the market. Key questions are whether a renewable fuel mandate is the most effective policy to promote the above goals, if government intervention in the industry is appropriate, and, if so, what level is appropriate. This report outlines some of the current supply issues facing biofuels industries, including implications for agricultural feedstocks, infrastructure concerns, energy supply for biofuels production, and fuel price uncertainties. This report supersedes CRS Report RL34265, Selected Issues Related to an Expansion of the Renewable Fuel Standard (RFS), by Brent D. Yacobucci and Tom Capehart.