The volatility of the price of crude oil is causing world to turn to alternative energy sources such as biofuels. Biofuels production continues to grow on global scale and ethanol fuel is together with biodiesel the most popular biofuel energy option.
To thoroughly answer the question whether ethanol is good or bad energy source we need to look at it from several different perspectives. From the environmental point of view ethanol has clear edge over gasoline as it burns significantly cleaner, emitting fewer greenhouse gases in the process.
Being beneficial from environmental point of view is not enough to describe certain energy source as good. It's clearly an important advantage but there are some other things that need to be mentioned here before coming to final conclusion.
Ethanol production is still primarily connected with food crops such as corn which leads to food vs. fuel debate. Increased production of biofuels from food crops could result in higher food prices and create even more hunger in the world.
In a world where there are millions if not billions of hungry people using arable land to produce fuel instead of food is anything but moral. This is the main reason why biofuels such as ethanol must be primarily produced from none-food crops, algae or waste.
Gasoline has significantly bigger energy content than ethanol fuel. In fact, the fuel consumption is around 50% bigger with pure ethanol (E100) when compared with gasoline.
Using ethanol fuel also requires sophisticated filtration systems because ethanol can easily absorb water and therefore tends to cause corrosion inside the engine block.
While there's no doubt that going for more ethanol could cut our dependence on foreign fuels, lower the fuel costs and account for less emissions, this still doesn't seem to be enough to predominantly describe ethanol as a good source of energy, at least not while there is a still ongoing food vs. fuel debate.
To turn ethanol into a "good source of energy" we need commercially viable technologies that would focus on producing ethanol from non-food crops because fuel production mustn’t interfere with food production.