In papers around the country General Motors (GM) is touting its “live green, go yellow” campaign that emphasizes the role of E85 as an alternative fuel. We noted earlier the pros and cons of ethanol, i.e. alcohol, in light of the push in the State of the Union speech.

Dimitra Defotis in Barron’s reviews the environment for ethanol and the stock market. Unfortunately for investors who want to try and play this trend there is little in the way of investment opportunities. With oil prices still elevated the appeal of ethanol infrastructure remains attractive.

But at the average oil prices anticipated by the futures market this year — near $65 per barrel — developing ethanol infrastructure remains attractive.

Last year, private-equity firms nearly doubled the amount of money they invested in oil alternatives, to $181 million, according to a survey conducted by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association.

“I think the demand for ethanol will increase in the next few years faster than the capacity to produce it,” says Clinton Mayer, an analyst at brokerage firm Burnham Securities.

One trend that could emerge is pressure on sugar prices. How would that work? As more corn is diverted to creating ethanol this could put upward pressure on high fructose corn syrup prices. As HFCS is a substitute for sugar it could allow sugar prices to continue their upward trajectory.

Patrick Barta in the Wall Street Journal noted that the entire range of starchy commodities could see higher prices as they get diverted into the ethanol stream.

The market’s sugar high raises a dilemma that could apply to other commodities such as corn and palm oil — even tapioca, a root starch perhaps more familiar to pudding lovers. All of these can be used to produce ethanol or other alternative fuels, such as biodiesel (a fuel made from vegetable-oil derivatives). Farmers world-wide are rushing to increase production in anticipation of a bigger global appetite for such alternative fuels.

It will be interesting to see how this plays out. A permanent shift in agricultural demand due to ethanol consumption could have a wide variety of effects. The question that still needs to be answered is whether this ethanol push is real and long standing.