1) Go to Obama's web site and look at his plan for cap and trade for carbon emissions. Looks like he plans to be incredibly stupid.
2) If you think rationality is going to come into these decisions take a look at ethanol. Massive government subsidies even though it takes many more BTUs to produce a gallon of ethanol than you get when you use it. And even though ethanol production uses huge amounts of clean water and good farmland.
Depending on the government to make sensible "green" decisions is not realistic.
You miss the point with #1 and #3. Even if it makes a useful fuel with a positive energy balance, the input materials make an even more useful fuel with no modifications for other applications, namely electricity generation and thermal energy (direct heat) systems.
#2 is a deflection away from the matter at hand. In fact, rising fuel economy diminishes the impact of lower carbon / lower pollution fuels.