Actually, the bio version of
butanol (C4H9OH) has around 10% less energy density than gasoline. But, it's a alcohol based fuel source. Bio
gasoline from certain GMO strains of algae (or other biomasses) on the other hand, is a hydrocarbon fuel, nearly identical to the (C6H14) through (C10H22) alkane hydrocarbons. Some reports even put it as having a higher energy density.
The reason it isn't being considered is amount required vs. the amount available for production. The problem isn't the energy conversion at the user end, it's in current production scaleability, current production cost vs. normal fuel, and a serious lack of research funding for the last 30 years.
This paper, if you scroll down to Appendix 1, shows the different groups interested and involved in the current research. EPA, DOE, NASA, GM, Lockheed, Boeing, USAF Office of Scientific Research, Oak Ridge National Lab, etc etc. Granted, this was in 2010, and little progress has been made since then, but you have to ask why that is. Mostly because the people running fuel companies these days are looking for quick, high return-to-investment ratios. They're looking at more "traditional" biofuels and "established processes" as opposed to dumping lots of funding into something that is, by scientific testing standards, brand new and unproven. But the entire reason its so untested is because
no one is willing to put the money to it, despite the high yield-to-input possibility, and sharply lower air pollution quotient.
Apparently, biofuel for aviation is an idea on the move. Jatropha produces seeds with 20-40% oil to weight yield, but
requires more water to process.. Camelina is another plant with a high oil seed, but also has a high fatty acid content that, if not processed right, will render the fuel unusable in a shorter amount of time, making storage a possible issue. Babassu and coconut oils have also been tested, but have the same potential problem as the Camelina. The reason these and other land based plants are so attractive over algae fuel is the same as above: established processes, simple cultivation with current tech, and the "quick return" idea. If the oil lobby didn't have such a grip on DC for so many decades, we would be 15-20 years ahead of where we are now. Instead, there is almost no research on storage that I could find without dropping a few C-notes to purchase university produced research papers that contain limited specifics on the subject.
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