Is It Legal?

Yes, and no.

The 'no' comes from the fact that ethanol is simply the stuff that 'revenuers' have attempted to prevent the 'moonshiners' from producing for decades. Yes, ethanol is consumable but it's use is highly discouraged due to health concerns as well as that of making untaxed whiskey.

The yes comes from obtaining a small fuel producer permit from the Bureau of Alcohol, Tobacco and Firearms. As far as getting a permit goes, it can be simple but there is a form you will need to submit prior to commencing with the distilling process needed to produce ethanol.

How difficult/expensive is the US licensing process for making alcohol?

Getting a license from the Bureau of Alcohol, Tobacco, and Firearms (BATF) is not difficult, taking about a month.

Click the link below to see the form and instructions for the "fuel distillers' permit". Be sure to check the box showing that you will produce less than 10,000 gallons per year, or you will have to post a bond.


Application form 5110.74 and additional information are available from the:
Bureau of Alcohol, Tobacco and Firearms,
National Revenue Center, Spirits Unit A,
550 Main Street, Room 8002,
Cincinnati, OH 45202-3263
1-800-398-2282 or (513) 684-7150
natlrevctr@cinc.atf.treas.gov

Here is where you can access the government form for small fuel producers:

[link]