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Actors are not necessarily as rational as Econ 101 would have us believe. Incomplete information, misinformation and advertisement distort the market. As well as monopolistic practices.

A lot of conspiracy theories are paranoid, but the propaganda machine of the oil industry is very real and managed to incite a lot of economically counter-productive policies.

He said "inexpensive", not "economical". The whole process isn't economical yet. Perhaps conversion is more economical with their particlar sorts of alcohol though.

Understood, although eventually it has to become "economical" or it doesn't fly.

My point was, you can view the alcohols as a feedstock for the gasoline production, and given that, you might just stream in large quantities of already-produced and cheap grain ethanol etc. from Indiana.

It is more likely that polluting methods (net non-zero) will be forced to become uneconomical.

Ethanol mixed fuel is common in a lot of places.

I might have misunderstood your point, but I believe alcohol is commonly used as a fuel in Brazil, where most cars are capable of using it directly.