A chemist told me that ethanol is actually cheaper to produce directly from petroleum, than via corn. I'm not sure he meant oil or natural gas. The ethanol subsidies are strictly for corn based.
On the other hand, it allows oil companies to pretend they're doing something about climate change (without changing any of their infrastructure) and it gives farmers more money, so you'd have to take on the oil lobby AND the farming lobby to get rid of it.
say you have 100 barrels of revenue, but you must expend 60 barrels to get the 100 barrels, then you have 40 barrels of profit.
you consume more barrels than you produce. See?
Diesel engines originally were developed to burn peanut oil. So lets run the peanut farm on locally grown peanut oil.
Lets say the tractors and trucks take 100 barrels of peanut oil per year to run. Oh fertilizers and poisons and all that petroleum derived stuff take oil too, but whatever, we'll imagine the total energy cost of running a farm is 100 barrel equivalent of peanut oil. Sure some of the 100 barrels equivalent is the UPS dude pumping diesel into his brown truck to drive out and drop off your herbicide or seed or whatever. And the power plant is shoveling some energy in the form of coal to make the electricity to run the irrigation pumps. Still, ignore the details and stick with me on the big pix, "doing farmin for a year" takes 100 barrels of energy.
If your farm averages 101 or more barrels of peanut oil production, you win, and get to sell at least 1 barrel a year (or more) for profit, or more likely debt service and taxes, whatever. At least next year on average you'll have a stockpile of 100 barrels needed to run the farm next year. You have a magic perpetual motion machine that turns sunlight into a trickle of peanut oil as long as the soil doesn't wash away and the sun keeps on shining. Cool.
If your farm averages 99 or fewer barrels of peanut oil production per year, then aside from massive government intervention you'll never get to sell any peanut oil on the open market, and even worse, you'll have to buy at least 1 barrel per year of crude oil to continue to operate your farm. This farm eats oil well pumped crude oil and outputs, well, nothing at all, at least without massive central government control and regulation and subsidy, like having the .gov take my money at gunpoint to give you 50 barrels of crude oil in exchange for votes so you can sell 40 barrels of peanut oil to greenwash the market.
Guess which scenario describes actual ethanol operations? We would net conserve crude petroleum if we shut down ethanol production today. This would eliminate uncountable government provided socialized jobs, so you can guess the likelihood of that ever happening.
Correct, this is the real question, whose answer is debated and depends severely on the production mechanism.