The issue with all renewables - with just about anything for that matter is - how does its value stack up vs the next-best alternative? If it takes government subsidies, upsets other industries and prices, or has other unintended consequences, biobutanol will be a non-starter. Or should be, if the government lets the market decide.
I disagree. There is a legitimate government interest -- national security, in particular -- in alternative fuels. It is important to find sources of energy that do not depend on unstable, corrupt, and dangerous foreign sources.
The problem with those alternatives is that they entail very significant R&D costs, and have a long lead-time, in a business where the current alternative is well-established and, currently, lower-cost. It's not something you really want to wait for until the last minute, and there's no short-term profit potential, so it's unattractive to the business world....
So some form of government involvement is appropriate on the R&D and basic infrastructure level. Of course it can be abused.... but the general need is legitimate.
I attended a seminar on a hydrogen fuel cell power car which was being road tested. The project manager said the only things wrong with the car was it was ten times too expensive and three times too heavy, other wise it was fine. Such is the fate of most alternative energy sources. There may be a nitch market, but gas and oil energy content is hard to beat.