President Bush may up the ante tonight in his State of the Union address, many analysts think, by setting new targets for ethanol use or encouraging automakers to shift to engines capable of handling E85, a fuel that is 85 percent ethanol.

The ethanol industry is already on a roll: This year's production will surpass the mandate set for 2012 -- 7.5 billion gallons -- in the Energy Policy Act of 2005. And investors drove up the stock prices of ethanol companies yesterday in anticipation of Bush's speech. Though the stock market fell, shares of VeraSun Energy Corp. soared 7.2 percent and Pacific Ethanol Inc. jumped 7.6 percent. (One senator has invited VeraSun's chief executive to attend Bush's speech.)

But an increasing number of economists and energy experts are questioning whether the benefits of producing ethanol -- especially ethanol made from corn -- have been oversold. They say that rising ethanol production is driving up corn prices, adding to summer smog and draining investment from other energy projects.

"We think that corn-based ethanol will grow to about 10 percent of the total gasoline pool, which is a significant number. It's the same level as Indonesia's oil production," said Daniel Yergin, chairman of Cambridge Energy Research Associates. "But then you really do run into the fuel-versus-food tradeoffs, which we're already beginning to see some signs of."

There are 111 ethanol refineries nationwide, with the capacity to produce more than 5.4 billion gallons annually, according to the Renewable Fuels Association. There are 78 ethanol refineries and eight expansions under construction with a combined annual capacity of more than 6 billion gallons.