Going back to an earlier post, would the presence of water in ethanol fuel matter as much as it does today? Surely if the water is completely miscible, then you wouldn't get the blockage problems that can occur today (where water doesn't mix with the fuel and remains separate) - perhaps that would stop it burning so efficiently, but as long as the ethanol remains over 100% proof (~50% by volume) then I can't see a problem.
As far as running a jet on it, I don't know, but as is said before, there is no shortage of oil, just a shortage of crude (which has to go through several processes before it is useable in any form of engine, so refining coal/shale oil/tar sands into oil is not such a far fetched principle)