Except that if we were able to replace oil from fossil fuels with oil from biodiesel or bio-engineered sources, without using something like corn/sugar ethanol,

Except that if we were able to replace oil from fossil fuels with oil from biodiesel or bio-engineered sources, without using something like corn/sugar ethanol, then this would also help solve the AGW problem. And an engine that is efficient enough that we could use less fossil petroleum and replace it with these sources is another tool we could use. The CO2 emissions themselves are not the whole problem. It's the fact that they are coming from a source that is introducing new carbon into the cycle. It's not the engine, it's the way it is produced and the fuel we use.