While corn into ethanol is at
best energy neutral. Their is some other issues that have pushed ethanol into a positive light.
In the US I think anyone would be hard pressed to find a person who feels sending BILLIONS of dollars off to some Saudi Prince is a good thing.....(if anyone knows of such a person I sure would like to have a civil debate with them. DO NOT expect the US government to ever back off their support of the Saudis, their is a key reason for that and it is much more complex than the oil they have.)
Hence one of the reasons ethanol has become attractive. Ethanol is here to stay. The infrastructure has been put into place. The auto makers have tweaked engines to run on E-85. It is not difficult to find a filling station selling E-85 in many places. Consumers are willing to accept the concept of ethanol.
Please note I am not debating whether it is good or bad for an engine nor the environment. Simply stating. In the US it has become an accepted form of fuel to use.
Once a product is accepted in mass distribution. It is much easier to get companies to pour money into research of the product. If a company can see a need for its product, they will spend money to capture market share.
Years ago I was asked about my view on investing in a corn based ethanol plant. I said no then and I still say no today, even though I live in the middle of corn country. Given that corn based ethanol is at best energy neutral.
This does leave the door wide open for many alternatives to corn based ethanol.
Once again I am going to point out that the infrastructure does currently exist for the product. The demand does exist for the product. The product is not going away. Money is to be made off of ethanol.
What I do feel will happen in the not to distant future is a replacement for corn will be found to produce ethanol. The concept of making ethanol from corn is very old science.
What I feel shows the strongest long term promise to ethanol production is Algae. (a brief explanation of the concept.
http://www.popularmechanics.com/science/energy/biofuel/4213775 )
If science today can manipulate the genes of a complex plant like corn. Manipulating the genes in a plant like algae will take place.
The genetically altered algae will be able to produce more of the desired products just like genetically altered corn can and does. The big difference being the amount of energy needed to grow algae compared to corn is a lot less. Algae can double is mass in 24 hours...something corn scientist have not been able to do yet. Once the energy neutral can be over come. Corn ethanol will die.
The US government did accomplish one thing, and it is something they can do. They did provide the infrastructure and created the consumer demand for the product. Now simple capitalism will result in a more efficient way to produce the product.
If you are a corn farmer I would suggest you DO NOT bank on the idea that ethanol will always demand corn...or switchgrass