Absolutely, you can use olive wood for grilling. A Tuscan specialty, Bisteca Fiorentina, which is a grilled porterhouse steak, is traditionally prepared over an olive wood fire. The beef is from the indigineous cattle breed called, Chiaminna (sp?). These are huge beasts that produce really nice beef. The thickness for the Bisteca Fiorentina is usually gauged as "three fingers." This yields an impressive slab of beef. The preparation is simple: grilled/seared briefly on both sides with liberal amount of salt. Serve nearly bloody rare and purple on the inside.
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