This paper analyzes energy efficiency of the industrial corn-ethanol cycle. In particular, it critically evaluates earlier publications by DOE, USDA, and UC Berkeley Energy Resources Group. It is demonstrated that most of the current First Law net-energy models of the industrial corn-ethanol cycle are based on nonphysical assumptions and should be viewed with caution. In particular, these models do not (i) define the system boundaries, (ii) conserve mass, and (iii) conserve energy. The energy cost of producing and refining carbon fuels in real time, for example, corn and ethanol, is high relative to that of fossil fuels deposited and concentrated over geological time. Proper mass and energy balances of corn fields and ethanol refineries that account for the photosynthetic energy, part of the environment restoration work, and the coproduct energy have been formulated. These balances show that energetically production of ethanol from corn is 2–4 times less favorable than production of gasoline from petroleum. From thermodynamics it also follows that ecological damage wrought by industrial biofuel production must be severe. With the DDGS coproduct energy credit, 3.9 gallons of ethanol displace on average the energy in 1 gallon of gasoline. Without the DDGS energy credit, this average number is 6.2 gallons of ethanol. Equivalent CO₂ emissions from corn ethanol are some 50% higher than those from gasoline, and become 100% higher if methane emissions from cows fed with DDGS are accounted for. From the mass balance of soil it follows that ethanol coproducts should be returned to the fields.