I'm against the ethanol requirement, but for totally different reasons. I think its just bad science. Ethanol is generally produced from crops like corn. Corn, which requires nitrogen fertilizer which is generally produced from massive quantities of natural gas and electricity. Ethanol crops displace food crops and every added acre of land needed for ethanol crops comes from somewhere - leading to either deforestation or the loss of prairie grasslands. In addition, fertilizer runoff is one of the main sources of environmental degradation in river estuaries (massive algae blooms leading to ocean dead zones).
In short, even if the math pencils out slightly in favor of ethanol in terms of net carbon into the atmosphere - it comes with other environmental externalities that really make me question the overall benefit. I don't know if ethanol is just a massive farm subsidy in disguise - but its certainly not good climate policy. The fact that ethanol is no good for my outboard is only a minor thing - and frankly, if that were the only reason, I'd suck it up.