Genetically engineered or transgenic trees can play a major role in providing the feedstock for an energy sector that relies increasingly on renewable energy. Biomass energy sources such as wood, both in the form of direct combustion and in the production of liquid biofuels for transport, are being viewed as a major energy source of the near future. Worldwide there is a growing emphasis to shift from fossil fuel to renewable energy sources largely in recognition of the GHG emissions associated with fossil fuels. The potential exists for customizing trees to provide energy, both as a feedstock for liquid biofuels and for direct combustion either as raw wood chips or a wood pellets. However, in the U.S. all transgenic plants, including trees, automatically come under regulation and must be deregulated if they are to be grown in large commercial operations. Although there is a process for deregulating transgenic plants through the US Department of Agriculture – Animal Plant Health Inspection Service (APHIS) and other government agencies, the process has become increasingly slow and cumbersome, particularly for perennial plants including trees. Indeed, it is argued that the obstacles to deregulation have been increasing. This paper looks at that situation and identifies some of the elements that contribute to the slowing of the process. It notes some inherent conflicts and social tradeoffs between a timely deregulation process and concerns about environmental obstacles given current legal decisions.