Recently, there are quite a lot of discussions and proposals concerning the utilization of gasoline-ethanol mixture as fuel for automobiles. This paper analyzes the benefits and problems of this kind of use from the point of view of resources, cost, energy security, grain security and environment. The conclusion remarks are: utilization of corn-produced ethanol as fuel for cars could be one the measures for“digesting” the stale grain, but should not be the long term strategic solution to the liquid fuel shortage problem. This is because the concrete situation in China is different from USA and Brazil. Besides, according to the experience in USA, utilization of gasoline - ethanol mixture needs strong government subsidies, it is not reasonable form long term point of view. A preliminary assessment related to production of ethanol by enzymatic hydrolysis of cellulose materials is also presented in this paper. Finally, in order to mitigate the pressure of increasingly import of oil and ensure energy security in China, some strategic measures derived for sustainable development are proposed.