The New York Times reported in this article Home Brew for the Car, Not the Beer Cup that a new company E-Fuel is working on a home ethanol mini production appliance. The unit would cost $10k and would use sugar, water and electricity to make ethanol. They say that it could make ethanol for as little as $1 a gallon if using cheap inedible sugar.
Interesting idea for sure. I'll be curious to watch it and see what comes of the product in the future.