Many of the corn to ethanol plants that started up a few years ago are going away again. No big surprise there, it happened thirty years ago, in just the same way.
As then, there are a number of reasons besides cheap oil. However, the biggest reason never gets discussed. We don't really have a market for ethanol. I know about flex fuel cars and E85 pumps all over Minnesota and Iowa, and the oil companies that blend alcohol into gasoline to boost octane. That's not much of a market.
Besides some prototype engines [from SAAB, Caterpillar, MIT, Ford, Ricardo, DELPHI….] there aren’t cars for dedicated ethanol use, and that is a shame. There have been decades [literally since the age of lamplight] of criticism against ethanol, and what has been lost to all but the engineers who design motors are the benefits it offers.
Ethanol is cleaner and cooler burning, less toxic, higher octane, less sensitive to mixture, has lower airflow requirements. Ethanol engines are as efficient as diesel engines, but cleaner, in a lighter, quieter, cheaper engine.
We don’t have cars like that, which is tragic, really. Only race car builders and some engineers will ever know what an engine designed for ethanol fuel can do, but that is politics and PR and, to some extent, technological progress and economics.
We may be really close to another, maybe our last, oil crisis, but I don’t think that alcohol engines will be built for that crisis. Technology is making electric cars the better choice in too many ways for alcohol to gain a foothold, except as a component in a new generation of ‘gasoline’. Since gasoline is a generic name, and not a specific chemical compound, it can be made from a blend of alcohols, without petroleum.