Discussions of alternative fuel and propulsion technologies for transportation often overlook the infrastructure required to make these options practical and cost-effective. We estimate ethanol production facility locations and use a linear optimization model to consider the economic costs of distributing various ethanol fuel blends to all metropolitan areas in the United States. Fuel options include corn-based E5 (5% ethanol, 95% gasoline) to E16 from corn and switchgrass, as short-term substitutes for petroleum-based fuel. Our estimates of 1−2 cents per L of ethanol blend for downstream rail or truck transportation remain a relatively small fraction of total fuel cost. However, for even the relatively small blends of ethanol modeled, the transportation infrastructure demands would be comparably larger than the current demands of petroleum. Thus if ethanol is to be competitive in the long run, then in addition to process efficiency improvements, more efficient transportation infrastructure will need to be developed, such as pipelines. In addition to these results, national and regional policy challenges on how to pay for and optimize a new fuel and distribution infrastructure in the United States are discussed.