There are definitely a few bugaboos here.... I'm going to go into Informed Opinion Mode, if you'll excuse me in advance
And hey, been away awhile but happy to be back, if seriously part time. Rum is running well and people call it "Magical"
Ethanol costs more energy to produce than it contains. Yep. So does gasoline. What? You didn't know that? Neither did I until I checked into it. Check on the transport, distillation and associated energy costs for it (the numbers touted by the energy companies forget a lot of those 'associated energy costs' like safe storage concerns and the capital costs involved since gasoline is so toxic, let alone clean up costs for old gasoline stations, military costs, etc) The point is, it doesn't MATTER. Ethanol is a transportable fuel, and so can be created at a location that uses a stationary energy source, like geothermal, hydro, nuclear, or whatever. And given we essentially have an infinite supply of geothermal energy, it doesn't really matter what the energy density of ethanol is, as long as it isn't too dismal, which it isn't.
Quote: ""Adding up the above, the hidden cost of oil imports skyrocketed to $779.5 billion in 2005. That would be equivalent to adding $4.10 to the price of a gallon of gasoline if amortized over the total volume of imports. For Persian Gulf imports, because of the enormous military costs associated with the region, the "hidden cost" was equal to adding $7.41 cents to the price of a gallon of gasoline. When the nominal cost is combined with this figure it yields a "true" cost of $9.53 per gallon."" -- Milton Copulose, senior fellow with the Institute for the Analysis of Global Security and with the National Defense Council Foundation (from 2005!!! Its gotten a lot higher since then folks)
Secondly, Ethanol is a bad choice anyway, as a primary road fuel. It only It only has two carbons. We should be focusing on Butanol (4 carbons), since there is a public domain process and bacteria strains that handle ABE fermentation, and produce the stuff. Weak solutions, yes, so it costs more energy to distill, but Butanol is as energy dense as gasoline.. so much so, you can run a gasoline car on it without any modification. Which means its a no brainer additive. Its less toxic than gasoline, but more toxic than ethanol and methanol, so it requires gentle handling, but we're used to that from the petro chems already. Check around.. there are a lot of folks trying to work out how to make this happen within the current profit models. Personally, I would develop the process just as an alternative.. for a future when gasoline tops $6 a gallon or better. I'd be shocked if this wasn't already happening in Chevron/Exxon/etc labs.
Anyway, without going all crazy into Methane synthesis being a pretty damn cheap way to go for everything, discounting stationary energy costs, and so on.. Ethanol production from a cost per gallon point of view requires innovation to reduce distillation costs. Supply is one side.. lets assume you can get really cheap sugar (like Brazil does on its 40% - 50% ethanol economy), you've figured out the nitrogen source problem and made it really cheap as well, and the problem is energy cost of distillation. That means you start thinking about moving to Alaska or the equator to get heating or cooling for free. Or a really cold river combined with a solar assisted heating element. Parabolic mirrors heating kettles, along with booster heat, and a naturally cool water source would go a long way to reducing costs. If indoors, then you could think about digging a deep hole and run a condenser down into it, saving condensing costs. Zeolites as a more high tech solution for removing the lion's share of the water from an already partly distilled batch, since you could make an inexpensive solar oven to bake them once they were saturated. Or using Potassium Carbonate to salt out the ethanol (google search that sentence to see how it works), then baking it out (since we don't care about drinking it). The possibilities are endless, but the focus is heating the wash/removing the water and cooling the vapor from free sources of heat/cooling.
) more than the cheapest bottled wines! Modifying your ecu and running on ethanol-methanol is nearly convenient here! running vegetable oil on diesels already is it by years. Guess! inappropriate automotive fuels are illegal and fined severely! 
