I strongly oppose subsidizing specific technologies, and I'd argue that all libertarians who care about the environment ought to be - even if they weren't already opposed to legalized theft.
Pouring time, money and research into something we're not sure will succeed, like ethanol, could be at the expense of something much better that could have been developed with those resources, like an effective solar cell or some sort of technology no one has even thought of.
Besides, government is never ahead of the curve when it comes to new technology - they're always scrambling to try to catch up and regulate after the fact. Do we really want to rely on them for innovation in any field?
In Canada, they pummel us with Nickelback to make sure we're exposed to Canadian culture, whatever that is, so I can attest to the dangers of government getting involved with anything related to music.