Yes, but widespread adoption of diesels would threaten the ethanol racket, so I would expect farm-state Congresscritters to vote against pro-diesel measures.
Nah. The ethanol racket depends purely on the consumption of gasoline, and the mandated rate at which ethanol is blended into gasoline. Right now, ethanol is replacing MTBE, and is blended into gas at 10% rates. If they want to peddle more ethanol, they merely increase the mandatory blend by 5 or 10%.