Christine Wietzki, a former farm kid from western Nebraska, is technical manager for one of the newest and most advanced ethanol plants in the country, the E3 BioFuels plant in tiny Mead, Nebraska, population 564. She's spent much of her young career turning food into fuel and believes it's a good deal all around. "If we don't have to export corn and can use it to get off foreign oil, that's fantastic," she says. In a cold spring downpour, Wietzki shows off the plant, a cluster of new white buildings, tanks, and a grain bin rising from thick gray mud next to a pungent, 30,000-cow feedlot.

Much of what happens in its tanks and pipes is typical of any large distillery—after all, people have been turning grain into alcohol for eons. The corn is ground, mixed with water, and heated; added enzymes convert the starch into sugars. In a fermentation tank, yeast gradually turns the sugars into alcohol, which is sepa srated from the water by distillation. The leftover, known as distillers' grains, is fed to the cows, and some of the wastewater, high in nitrogen, is applied to fields as a fertilizer.

The process also gives off large amounts of carbon dioxide, and that's where ethanol's green label starts to brown. Most ethanol plants burn natural gas or, increasingly, coal to create the steam that drives the distillation, adding fossil- fuel emissions to the carbon dioxide emitted by the yeast. Growing the corn also requires nitrogen fertilizer, made with natural gas, and heavy use of diesel farm machinery. Some studies of the energy balance of corn ethanol—the amount of fossil energy needed to make ethanol versus the energy it produces—suggest that ethanol is a loser's game, requiring more carbon-emitting fossil fuel than it displaces. Others give it a slight advantage. But however the accounting is done, corn ethanol is no greenhouse panacea.

"Biofuels are a total waste and misleading us from getting at what we really need to do: conservation," says Cornell University's David Pimentel, who is one of ethanol's harshest critics. "This is a threat, not a service. Many people are seeing this as a boondoggle." But Wietzki and her colleagues in Mead think they can do better. They hope to improve the energy balance and greenhouse gas benefits of ethanol by creating a closed-loop system—which is where those cows come in. They plan to fire their boilers with methane from two giant four-million-gallon biodigesters fed with cattle manure from the feedlot next door—in effect using biogas to make biofuel. The increased efficiency, she says, isn't only good for the environment, it's also good business, especially if the price of corn keeps rising or oil drops below $45 a barrel or so, the lowest price at which ethanol backers say the fuel can compete with gasoline in the U.S. "The last people standing," Wietzki says, "will be highly efficient producers like us."

It's easy to lose faith in biofuels if corn ethanol is all you know. A more encouraging picture unfolds some 5,500 miles southeast of Mead, where the millions of drivers of São Paulo, Brazil, spend hours a day jammed to a standstill in eight lanes of traffic, their engines, if not their tempers, idling happily on álcool from Brazil's sprawling sugar belt. The country had been burning some ethanol in its vehicles since the 1920s, but by the 1970s it was importing 75 percent of its oil. When the OPEC oil embargo crippled the nation's economy, Brazil's dictator at the time—Gen. Ernesto Geisel—decided to kick the country's oil habit. The general heavily subsidized and financed new ethanol plants, directed the state-owned oil company, Petrobras, to install ethanol tanks and pumps around the country, and offered tax incentives to Brazilian carmakers to crank out cars designed to burn straight ethanol. By the mid-1980s, nearly all the cars sold in Brazil ran exclusively on álcool.

Formula One-loving Brazilian drivers embraced the cars, especially since pure ethanol has an octane rating of around 113. It burns best at much higher compression than gasoline, allowing alcohol engines to crank out more power. Best of all, the government subsidies made it significantly cheaper. Not that ethanol didn't hit a few bumps in the road. By the early 1990s, low oil prices led the government to phase out the subsidies, and high sugar prices left the sugar mills, or usinas, with no incentive to produce the fuel. Millions of alcohol car drivers like Roger Guilherme, now a supervising engineer at Volkswagen-Brazil, were left high and dry.

"Guys like me had to wait in long lines two hours or more to fuel up," Guilherme says in his office at the massive Volkswagen plant in São Bernardo do Campo. "Consumers lost confidence in the alcohol program." A decade later when oil prices started to rise, Brazilians wanted to burn alcohol again, but given their past experience, they didn't want to be wedded to it. So Guilherme's bosses gave him a challenge: Find an inexpensive way for one car to burn both fuels. Guilherme's team worked with engineers at Magneti Marelli, which supplies fuel systems to Volkswagen, to write new software for the engine's electronic control unit that could automatically adjust the air-fuel ratio and spark advance for any mixture of gasoline and alcohol. Volkswagen introduced Brazil's first TotalFlex vehicle in 2003, modifying a small soccer ball of a commuter car called the Gol, which means—you guessed it—"goal!" It was an instant hit, and soon every other carmaker in Brazil followed suit.