Will biofuels ever turn the corner?

I’ve been wondering if biofuels will ever turn the corner. Not for the foreseeable future at least. Kior turned in a very disappointing quarter when it disclosed that it had only shipped 75,000 gallons of biofuel. The market had been expecting between 300,000 and 500,000. Not surprisingly, the stock got hammered is now under $3 after trading going public at $15 in 2011. I wonder if even guys like Vinod Khosla have been able to trade out of the company, given the depressed stock price.
The poor production news also gave rise to one of the standard issue lawsuits that occur when a company misses a major goal. Specifically the shareholder suit will claim that Kior either made misleading statements about its production capability or failed to disclose that it was going to miss those goals. These lawsuits are standard when there’s bad news but it’s likely one more headache that Kior doesn’t want to think about.
So might biofuels ever be the foundation of a decent business model? Probably but the engineering and commercialization hurdles are bigger than many of these companies anticipated. Scaling to millions of gallons a month is proving very challenging. I’ve personally been more interested in bio chemicals because they have higher price points and lower volumes can still be profitable. In many ways the best hope of the biofuels industry is another spike in gas prices.