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>2) It is cost-competitive at current and recent gasoline prices
Only with massive hidden subsidies. Of-course, gasoline has these too.
>3) It is produced domestically, improving the United States' trade balance and employment
A trade imbalance is predominantly with China, not Oman.
What about the fact that this wastes edible food to inefficiently produce fuel? If you love ethanol, there are are better ways of producing it.
As for the ozone, this is not news. Mario Molina warned of this in a lecture I attended several years ago. Regardless, it should be pretty clear by now that there are ramifications to everything, especially combustion.