The United States is investing billions of dollars each year in subsidies and tax breaks to domestic ethanol producers in the hope that biofuels will become a major plank of an energy security and fuel diversification program. Moreover, the investment has grown in recent years. This study assesses the value of the expensive program and its potential to meet the goal of enhancing energy security in an environmentally sustainable fashion. The policy research is designed to identify the steps necessary to avoid unintended negative impacts on sustainable development and the environment, including deleterious impacts on domestic agriculture, surface and ground water, and overall air quality in the United States. It also addresses the daunting logistical and economic challenges of expanding biofuels supplies into the US fuel system and examines the costs and benefits of different options.