Using watermelons to make ethanol is certainly nothing new. The National Watermelon Association began working with the USDA in 2006 to see if the 700-800 million pounds of blemished melons (and late-season melons that are not worth it for big farms to harvest) could find another life as ethanol instead of being plowed back into the ground.
ARS researcher Wayne Fish has found a way to get about 7/10ths of a pound of ethanol from a 20 pound watermelon. While that sounds like a pretty tiny amount, remember that these melons aren't being grown as a biofuel crop; it's just a way to get some oil independence out of leftover melons.
Photo by moreno0101. Licensed under Creative Commons license 2.0.