Norm you write “The fundamental problem with ethanol is that the process of making it is very energy intensive ”
The problem with getting oil out of the tar sands is that it is very energy intensive also. This does not mean that getting this oil makes no sense. As long as one can make a profit who cares?
The point is that there is a huge untapped source for energy that is produced every year from agriculture. In order to grow food, you have to grow a lot of cellulose that, basically, gets wasted. If it can be economically turned into fuel, who cares about anything else? And it means that continental North America is just that little bit more fuel self sufficient.