I have a friend that is benefitting from the ethanol boom in that his company makes components for the plants. He is not a believer in the economic viability of it in the current arrangement - ethanol plants burning huge amounts of nat. gas and the subsidy of $0.51 per gallon. However, in the situation where the ethanol plants can use waste heat from a power plant in the fermentation and distillation processes, the net energy (EROEI) can be made much better. Go from 1.25 to 3.0 or more. With greater net energy output the subsidy would not be needed. Right now with natural gas at $10.40 per million BTU I doubt many plants could be run at a profit sans subsidy.

The best case for supplying transportation fuel from crops is biodiesel from canola and other oil seed crops. Soybeans are priced too high in the world market for use in making biodiesel. Jatropha trees are very good producers of oil seed because they need such little water and NPK fertilizer compared to most crops. Problem with Jatropha is the warm climate as the trees are indiginous to the Southwest US and Mexico/Central America. I have heard 300 gallons per acre per year with Jatropha that has almost no imputs (irrigation or cultivation or fertilizer). Not sure what the pest problems might be.

My preference is for farm land to be used for food crops plus any fuel crops to aid farm production & crop transportation (hopefully by railroads). Energy for the automobile driver should come from solar/wind/hydro/tidal/etc. And if that is very expensive then people will have to use electric powered railways built with government help - just as ethanol is subsidized. Other transport options will be too energy intensive per passenger and thus too costly. Better dump your airline stocks while they still have some residual value.