Ethanol subsidies bring into production many acrea of what would otherwise be marginal or very low productivity land, and mostly is the land that farmers are paid a subsidy on which NOT to grow crops or pasture livestock. All the ingredients necessary to create a huge new Dust Bowl if drought conditions prevail in a goodly portion of the US.
Further, a rather stiff tariff is imposed on the ethanol that Brazil would be all too happy to export, and which they can produce for considerably less per unit than can the US sources. Brazilian ethanol is produced from excess sugar, a comparatively simple process compared to the growing, harvesting, processing of corn into a medium to convert into alcohol (ethanol), and the distillation afterword. The only point at which the US production of ethanol has any advantage is in transportation costs, and those are surprisingly high in this country, as ethanol does not move well through pipelines, but must be transported either by rail cars or truck transport.
Etrhanol does not store well, as it is prone to corroding the storage vessels, it evaporates quickly, and it tends to absorb water from the atmosphere, diluting its original properties.
This is not to say that ethanol subsidies make the least bit of sense.
Published: January 1, 2012
WASHINGTON — A federal tax credit for ethanol expired on Saturday, ending an era in which the federal government provided more than $20 billion in subsidies for use of the product...
...“We may be the only industry in U.S. history that voluntarily let a subsidy expire,” said Matthew A. Hartwig, a spokesman for the Renewable Fuels Association, a trade group for ethanol producers...