Barely a year after the federal government enacted an energy law to foster a huge national enterprise capable of converting plants and agricultural wastes into automotive fuel, its goals for the ethanol industry are in serious jeopardy.

As recently as last summer, factories that make ethanol from corn were sprouting across the Midwest. But now, with motorists driving less during the economic downturn, the industry is burdened with excess capacity and factories are shutting down virtually every week.

In the meantime, planning and construction have fallen behind schedule for new factories that were supposed to produce ethanol from substances like wood chips and crop waste, overcoming many of the problems associated with corn ethanol. That nascent branch of the industry concedes it has virtually no chance of meeting federal production mandates that take effect next year.

The decline in fortunes has been extreme for both kinds of ethanol since last summer, when oil at $145 a barrel appeared to shift the economics of the fuel industry to favor biofuels.

Only a few months ago, some refiners were buying up as much corn ethanol as they could to blend with pricey gasoline in an effort to restrain prices at the pump. Meanwhile, investors seemed willing to finance factories to produce next-generation biofuels, given predictions that they would compete against oil that might soon cost $200 a barrel.

But since the summer, oil prices have plunged while the price of corn, from which virtually all commercial ethanol in the United States is made, has remained relatively high. Refiners are limiting their ethanol purchases to a level required to meet federal blending mandates, a level far below the industry's capacity.

"The ethanol industry is on its back despite the billions of dollars they have gotten in taxpayer assistance and a guaranteed market," said Amy Myers Jaffe, an energy industry analyst at Rice University. "Congress passed something that was economically, logistically and scientifically implausible."

In its recent annual forecast, the Energy Information Administration, a part of the U.S. Department of Energy, predicted that the industry would miss by 17 percent the targets in the 2007 law for expanded use of ethanol and other biofuels by the year 2022.

"It's possible we may have to look at the targets again," Senator Jeff Bingaman, a New Mexico Democrat who is chairman of the Senate Energy and Natural Resources Committee, said in an interview.