The report describes the present status of an emerging technology that could be used to produce ethanol, an octane booster widely blended in unleaded gasoline, from New York State's abundant low-grade hardwoods. The technology, utilizing enzymes which can convert cellulose to sugars, was assumed to be embodied in a plant built in Jefferson County. Results, based on conservatively derived enzyme production rates and coproduct sales projections, were subjected to a sensitivity analysis. The results show that economic viability depends on the ability of the technology to produce marketable coproducts. In particular, the ligneous residue must be sold for at least $0.12 per pound. One suggested application, plywood resin extender, would displace petroleum-derived phenol formaldehyde which sells for about $0.35 per pound. The report also describes cogeneration of electricity by the plant, and areas of future research and development that would reduce costs of production.