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GAIA Host Collective
You're not the only one to figure out the ag-subsidy angle.
The problem with your analysis is that, at 51¢/gallon subsidy and an EROEI of 1.3 at best (and perhaps as low as RR's calculated 1.09), each gallon-equivalent of new energy is receiving at least $2.21 (1.3:1) and possibly as much as $6.18 (1.09:1) in subsidy.
There are a lot of ways to save petroleum at far lower cost than even the lowest estimate. Ethanol subsidies are money down a rathole.
1.3 * ethanol in = ethanol out
1.3 * 3.33 = 4.33
and observe that ethanol out - ethanol in = 1
If 4.33 gallons are produced and there are no other energy inputs or outputs, 3.33 gallons is used to produce the ethanol and only 1 gallon is aviable for something useful. I assume that some of the wasteproducts could be used to something useful but this must be really bad anyway.