GH

Ethanol Growth Faces Tremendous Obstacles

The four points you quoted about ethanol's natural limitations are correct and present an interesting contrast with butanol, which is a different alcohol-family chemical that can just as easily be made from the same feedstocks as ethanol using similar processes or others (such as Fischer-Tropsch) that are well-established. Here are the four points, rewritten for butanol:
• has 95% of the energy content of gasoline (and generally produces more power and lower emissions in internal combustion engines due to more complete combustion)
• can be transported in any pipeline that can carry gasoline or oil
• can replace a gasoline grade point of sale with minor infrastructure changes (e.g. pump re-calibration)
• has (at this time) little support by car manufacturers

BP and DuPont are developing butanol biofuels. Competing against ethanol, given the 3 advantages listed above, my money is on butanol. Ethanol is a good MTBE replacement but a relatively poor fuel.