Pimentel at Cornell University has long been a critic by pointing out that it takes more energy to produce fuel ethanol than is present in the product.
ref: D. Pimentel, Letters, Chem. and Engr. News, Sept. 12, 2005, pp. 28
This analysis uses old data. Modern distillation technology and substitution of drying agents instead of fancy distillation to get around the azeotrope problem have greatly reduced the energy for alcohol purification.
Latest technology and factoring in energy value of byproducts prove that fuel alcohol shows positive energy balance. ref: A.E. Farrell, R.J. Plevin, B.T. Turner, A.D. Jones, M. O'Hare, and D.M. Kammen, "Ethanol can contribute to energy and environmental goals", Science, 311: 506-508 (2006)
Another refutation is to consider energy quality. Electrical energy suffers from a minus 235 % net energy comparison. Alcohol fuels are as good or better than other fuels on the basis of net energy and are valued on economic merits and environmental considerations.
ref: B.E. Dale, Letters, Chem. and Engr. News, Oct. 10, 2005, pp.6 N E X T