Big oil kept ethanol bills from passing.
The American Petroleum Institute issued claims that alcohol was in every way inferior to gasoline. It went as far to claim that ethanol would cause a bootlegging atmosphere around filling stations while reducing state treasuries and hurting the oil industry. With this pressure, the government did not pass any of the ethanol incentives proposed in the Farm Chemurgy movement. Agrol production shut down, and by 1940, the Midwest ethanol push fizzled out.