Cellulosic ethanol costs are coming down.

Poet's cellulosic ethanol production costs are within $1 per gallon of its corn ethanol and are dropping, says Doug Berven, corporate affairs director for the Poet, Sioux Falls, S.D., the nation's largest ethanol producer.

But the industry won't build any commercial plants if there's no additional demand for ethanol, Berven says.

Berven was in Jamestown, N.D., recently drumming up support for the ethanol industry's effort to convince the EPA to approve E15.

Poet – which is headquartered in Sioux Falls and has 26 corn ethanol plants in seven states -- is breaking ground on a commercial-sized cellulosic ethanol pilot plant at Emmettsburg, Iowa, this year. It will make ethanol from corn cobs.

Poet is paying farmers around Emmettsburg $45-$65 per ton for corn cobs. USDA will pay producers up to another $45 per ton under a special energy crop incentive program.

"You'll want to be an early adopter," he says. "That's where the money will be."