Will ethanol be the fuel of the future?

A question from Yahoo! Answers:

Will ethanol be the fuel of the future?

Possibly. Actually, if the U.S. government’s protectionist tendencies could be reigned in, it would be the fuel of today.

In Brazil, ethanol is made of sugar cane and is economical when oil prices are at $40 a barrel or above. In the U.S., ethanol is made of corn and is economical (meaning, equally expensive to gasoline) at oil prices of $60 a barrel or above. The U.S. government pays subsidies to domestic producers of ethanol (the largest of which, incidentally, is Archer Daniels Midland), while at the same time keeping the Brazilian ethanol out by imposing countervailing tariffs on it.

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