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I read somewhere that the Chevrolet Volt's engine would be designed to be E85 compatible. If this is true, this is a great way to cut back on petroleum usage and reduce our foreign and domestic oil dependency even further.

If this is not being considered, it should be. When the Volt needed fuel away from home, filling with ethanol would require only 15% petroleum. I would think that our domestic oil could easily provide this.  

From everything I've read and heard, the Volt will have E85 capability. I personally have changed my opinion somewhat about E85. I don't think it's the panacea to our nation's energy problems. In fact, current ethanol production methods are very inefficient, and some would argue actually consume more energy than the end product produces!

If the cellulosic technology being pioneered right now goes mainstream, then I may change my tune.  

It's true... the Volt's engine is E85 compatible.

esanchez has it right. Right now, E85 isn't a viable biofuel.  We were just having a discussion about the Ford F-150 yesterday about the cost of fuel with gasoline vs. E85.

According to the EPA, the annual fuel cost for an f-150 2wd using gasoline is $1464 (with gas at $1.66...I have no idea where they get their price estimates from, but obviously not from planet Earth).  Using E85, it goes up to $3524 (with e85 at $2.82).  And yeah, the E85 leaves a much smaller carbon footprint... 20.1 barrels vs. 6.7 barrels... but if it's not economically viable, it's just not viable at all.  

The burning of E85 vs. gasoline itself may have a smaller carbon footprint, but if you look at the entire "life cycle" of E85, it's not as clear-cut.

The only major bonus to E85 that I've heard is its much higher octane rating (generally over 100 octane rating). Performance enthusiasts with E85-capable cars can get more power out of their engines, at the expense of poorer fuel economy.

Out here in California, it's nearly impossible to find E85 anyway.