One of the most controversial issues relating to ethanol (and more recently to biodiesel as well, see below) is what environmentalists call the "net energy" of ethanol production: is more energy used to grow and process the raw material into ethanol than is contained in the ethanol itself?
It's especially controversial in the US. In the US most ethanol is made from corn (maize), which is far from the best energy crop (Brazil uses sugar cane). Nonetheless, a US Department of Agriculture study concludes that ethanol contains 34% more energy than is used to grow and harvest the corn and distill it into ethanol.
Learn more by reading the entire article here.