Charger, you've been a great addition to C&G with many great ideas and insightful posts...... this isn't one of them.
Let's start with your errors:
1. You can't make the blanket statement that it takes 3 times as much energy to produce Ethanol then it does to produce the same quantity of gasoline. Ethanol can be made from many many different plant sources... each one takes a different amount of energy to get ethanol out of... it takes more energy to get ethanol out of woodpulp then it does switchgrass.. for example.
2. You're not burning "food".... that is unless you eat sawdust, grass, waste sugar cane, or rotten apples. Yes it can be produced from corn and wheat, but it isn't like we can't grow more.
3. You say that the cost of ethanol is artificially low because of government subsidies. I say the cost of oil is artifically low because it doesn't take into account the amount of money we spend in the Middle East. Where would you rather your tax dollars go to subsidize your fuel... the Middle East, or the Mid-west?
4. I think you're mixing up some statistics. There is around 30% less "energy" or BTU in a gallon of Ethanol then there is in a gallon of petrol. Currently, because our infrastructure isn't set up to produce large quantities of ethanol, we don't achieve the same economies of scale the petrol producers do.
Some facts:
1. Ethanol is completely renewable.
2. The plant sources for ethanol are very flexible. Just some of the examples are: Corn, Potatoes, sugar cane, wood pulp, saw dust, rotten fruit, fruit pealings, switch grass, hemp, peanuts <amongst other nuts>, grains, cheese whey, waste sucrose, potato waste, brewery waste, and food and beverage wastes.
So... have a bum crop of corn this year? No matter, call up the folks at Budwiser and see if they have any brewery waste they'd like to get rid of.
3. Ethanol is as close as we'll ever get to having a Net 0 CO2 emissions vehicle without going to solar powered cars. The amount of CO2 emitted from an ethanol burning car is never greater then the amount of CO2 absorbed by the plant while it was growing. Petrolium on the otherhand pumps dormant/stored CO2 up from the ground and releases it out into the air.
4. More agriculture in the US is a good thing. It improves the quality of your air and keeps the money you spend on fuel local <at least on the country level>.
5. Ethanol is water soluble, non-toxic and biodegradable. Making the envirmental cleanup of a spil as simple as a rain storm.
I suggest you check out E85Fuel.com for more information.