It will play out about like you think it will.
The US Government's official policy is the country desperately needs to explore alternative sources of energy and fuel, but they don't mean you and me. They mean corporate America.
Only corporations are "allowed" to do the explorations that result in new products and new sources of money. Once we come home from our corporate jobs, we are consumers, and are expected to buy everything we need from corporations. When we strike out on our own, and try and be self sufficient within our neighborhoods, we will always be struck down for the common good.
...and to a certain degree, that makes sense, having a bio-fuel operation of that size, in a garage, in a residential neighborhood, infringes on the safety and quality of life of every other person in that neighborhood. I think we can be pretty certain that the guy doing this isn't following most of the safety rules that a corporation would have to follow.... something amply demonstrated by the large fuel spill, that brought attention to the operation.
It's hard to say what the balance between your personal liberties, and the rights of your neighbors should be.
And before you jump on me for saying that, think for a minute how you would feel if you lived in a small suburban neighborhood, and your next door neighbor thought it might be profitable for him to move 3 dozen pigs into his backyard and start a small pig farm. Pig smell and noise doesn't bother you? That's OK because your other neighbor decided to open an all night Hip-Hop club and speakeasy...
"Bump-da-bump-da-bump-wicca-wicca-wicca Oink! Oink! Squeee! Soo-eee! Soo-eee! Snort! Snort! Bump-da...."
-Chuck