I am not an expert in the various alternative fuels that are available today, however a letter to the editor from the Jan. 23, 1906 NYT hints that tax policy might have shifted us AWAY from alcohol based fuels?

I'll let you decide:

In this country much pure ethyl alcohol is made from sugar waste - and, by the way, a great deal of our whisky is made from this product by suitable diluting and "doctoring" - the cost of production being as low, perhaps, as 8 cents per gallon. In fact, it has been seen sold in the past as low as $2.25 per gallon in carloads. As the tax is $2.07 per gallon, this is proof positive that the cost of production does not exceed 18 cents per gallon. At anything like 20-cents a gallon it would prove a formidable competitor of gasoline for use in explosion motors.

In other words, the excise tax on liquor made it cost prohibitive to use alcohol in combustion engines. Therefore, we moved towards gasoline/diesel engines and subsequent technology focused there. One wonders what we would be driving today if we had spent 100 years on advancing the alternative-fuel engine and how geopolitics would be different if crude oil wasn't as important as it is today. We have made substantial strides in the past ten plus years of working hard to improve fuel efficiency and it is difficult to judge just how important such a tax was in making us "path dependent."

However, it is fun to think about.