The fact is that at the moment there are no significant long term solutions, yes there have been substantial increases in alternative fuel technologies but these are far from a major production stage. Especially if we have people complaingin about power reductions of ethanol there is no way hydogen combustion engines will be widely accepted by the general public. Ethanol is just a band-aid while there is R & D in the area, lets face it petroleum fuels is the major source of energy of the world, once it runs out it runs out. With the addition of bio-fuel or mixes we may prolong this giving us a further time to develop our technologies while at the same time creating a cleaner and more productive fuel.
As for fuel consumtion, the large concern is with carbie engines, a fuel injected engine will have an increase of 2% yes thats 10L/100km to 10.2L/100km and the conversion to the petrol bowser your still going to be coming out ahead at the end of the day. Id rather have $6 extra in my pocket everytime i fill up the money adds, maybe $300+ a year if u fillup once a week.
There are system analysis to show the positive and negative sides to the arguement but the fact is the government releases very few of them but it would be safe to say at the present time australia would already have an easy capacity to produce 200+ million litres of ethanol per year, and this is a more sustainable market than the sugar industry atm, but remember its not only the sugar industry there are many other crops that a simply thrown away as they are not deemed good enough quality for the market. At the end of the day though everybody thinks about themselves consumer will worry about what effect they will see on their car business what will it do to its profit and so on, policy is not always introduced as it is the best thing there are many other factors ($$$$$ lining big business pocket being the big one)