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That makes sense. There was a thread a while back about using enzimes to break up the cellulose -- so that entire corn stalks, etc. could be fermented. I wonder how the economics of that process will compare to burning the material for process heat.

I'm generally suspicious of anything that needs a government subsidy to work (beyond the initial R&D and startup phases). If people can make a profit from producing ethanol, then the onus will be on opponents to show why it isn't a good thing.

enzimes = enzymes

I expect to see production costs go down as new technologies are introduced. Big companies are now getting in on the game and they'll figure out how to reduce costs. I just read that Chevron invested in a big ethanol plant that's being built. I think we'll see ethanol production costs going down while gasoline prices continue to rise.

I don't know just how much the ethanol industry is subsidized, but any need for subsidy should decrease as the price of oil climbs. I don't think we'll ever see really cheap oil prices again. Reserves are depleting and what is left is harder and more costly to get and refine. Also, demand for oil is increasing as countries like China and India become more industrialized and the people their want to live more like we live. The cost of producing ethanol relative to the cost of producing gasoline kept ethanol from being a viable option before. Now production costs for producing ethanol are going down while the cost of oil is rising so ethanol is looking a lot more promising.

In Brazil now from what I understand more than 40% of all fuel burned in passenger vehicles on their roads is ethanol. They no longer have to purchase foreign oil. From what I understand their ethanol industry is not subsidized, but taxes are lower on ethanol and cars capable of running on ethanol. They do have the advantage of having dirt cheap labor and huge amounts of sugar cane (much better than corn for ethanol production). I am confident that good old American ingenuity can level the playing field though.

One thing they have in Brazil that we should have here are cars capable of burning 100% ethanol, 100% gasoline, or any combination of the two. I think most of those cars are actually produced in the U.S., but they are not marketed here. An awful lot of our new cars are capable of burning E85 though. It costs very little extra to build cars that handle E85 and manufacturers get tax breaks for doing it, so apparently an awful lot of the new vehicles on the road will run on E85 (5 or 6 million to date) even though manufacturers weren't making a point of telling people about that. These tax breaks are a subsidy of sorts, but if it ends up reducing our dependence on foreign oil it's worth it. That's a matter of national security. And besides, it keeps some of the money we are giving to the Arabs here at home. I'd rather see American farmers and other American businesses rake in that money rather than some jerk offs who fund terrorists. Even our oil companies benefit to a degree because they get tax breaks for mixing ethanol with gasoline. They could benefit more if like Chevron they would get into producing ethanol.