It will, as soon as it becomes price competitive with gasoline made from crude, which may happen earlier than many people think. The government could care less, as long as gasoline is cheap. The oil companies, well, some are already in the bandwagon, i.e.:
Alternative energy | Environment and society | BP
Harvesting can be done with a filter or a centrifuge, they both much simpler and require much less energy than what's needed for traditional crops like corn or wheat. As for energy inputs -- the Sun is still free.
Some other people are using the flue gases of a coal fired power plant for extra dose of CO2 and heat; the latter can be very useful in a colder climate.
-Ken
