Yes, biofuels reduce American dependence on foreign oil, because they give us something else to use. If we use so much oil per year, if we can get that oil from somewhere else, we are going to use less of it from foreign sources. This will help us look domestically for our energy.
Right now, biofuels are not developed enough or funded to a point that they have any significant effect on the dependence of foreign oil. If we were more accepting of them, funded research of developing them more, and actually gave them a chance to flourish, in only a few years time they could certainly be relevant.
Developing biofuels will not reduce American dependence on foreign oil. Companies will continue to sell the cheapest fuel available - that is how they attract customers. As America develops more biofuels, foreign countries will reduce the price of their exported fuel, causing companies to continue purchasing foreign fuel. Biofuels will not be able to get the market share needed to outlast temporary markdowns by foreign exporters. Biofuels will be a niche market until the price of foreign oil after tariffs.
I do not believe bio fuels reduce American dependence on foreign oil. There is no major attempt to reduce our dependence on foreign oil rather than trying to get more oil out of our own sources. Oil companies have no interest in lessening oil dependence because they want to make money. It is doubtful this dependence will decline until the resources dwindle.