"Alternative Fools: E85"
The Truth About Cars has a critical analysis of the limits of ethanol as an alternative fuel.
As with most alternative fuels, ethanol faces limits to growth. Bush wants ethanol production to double by 2012, but even if gas consumption were to stop growing, it would only be enough to turn U.S. gas supplies to E05. Double again by 2018 and U.S. gas would be E10--the same as the gasahol sold now that any car can use. Furthermore, to be economicly viable gasahol needs to be sold close to the cornfields where it is produced because it has such a low EROEI.
But the Auto industry has jumped on the ethanol craze and will design new E85 capable cars and new E85 pipelines and pumps. A great publicity stunt, but not a real solution.