Well, despite the hoo-haa created by recent activity in the ethanol sector, it remains deeply vulnerable to the oil prices set by the oil barons of Middle East (governments). They have the power to drop the prices of oil for just a few years to completely kill any viable renewable fuel industry that tried to survive in absence of state subsidies and regulatory support.
So that is exactly how the renewable fuel industry is going to try and protect itself from the Saudi/Iranian/Venezuelan grip on its business plans. The renewable fuel industry will ask the government for help. And they should, as long as, in my opinion, they make a case not just for oil security, but for cleaner environment and better energy efficiency. Replacing fossil fuel with non-fossil fuel that has same emission factors is not really an answer. Here’s a news item that tell us where regulations are heading to support this industry:
8 September 2006: The US EPA proposed a Renewable Fuels Standard (RFS) Program which would require that 3.71% of all the gasoline sold or dispensed to US motorists in 2007 be renewable fuel. The program would boost the use of corn-ethanol as automotive fuel—from 3.5 billion gallons in 2004 to estimated 6.95 – 9.35 billion gallons in 2012. Biodiesel would be also eligible for renewable fuel credits under the program’s banking and trading provisions. The use of biodiesel would increase from 0.025 billion gallons in 2004 to 0.3 billion gallons in 2012, estimates the EPA.