The purpose of this paper is to examine the role of biomass energy in the federal government policies of Canada, Mexico and the USA on the development and utilization of biomass energy. These policies span the entire spectrum from poor to excellent. One of the main driving forces displacing fossil fuels today is environmental issues. But there are still major barriers that are affected by government policies and that must be overcome to facilitate the displacement of large amounts of fossil fuels by biomass. Among these are development of large-scale systems that can supply sustainable amounts of biomass energy and biofuels at competitive prices, and nationwide distribution systems that simplify consumer access. These and other barriers must ultimately be addressed if any federal government decides to institute policies to help establish large-scale biomass energy markets. Otherwise biomass energy utilization will continue to rely on government subsidies and will be limited to niche markets for many years until oil depletion and supply disruptions become a fact of life. This indeed may turn out to be the third oil shock in the 21st century.