Seems like a viable starting point, but ethanol does require a decent biome and infrastructure or a great stockpile of sugar, dirt and plant matter which can be the cane you use for sugar.There's also a different route you can take if you have sugarcane available:
Blast Furnace -> Worktable -> DC Engine -> Fermenter -> Gasoline Engine -> Grinder
That's one block more to craft, but it eschews the worm gear, which you will never use again. It also makes the grinder quite a bit faster, since you don't have us use any form of transmission. 18 seconds per item, as opposed to >30 for steam engine with worm gear, or 24 for steam engine with 4:1 gearbox. Ethanol crystals are a renewable fuel source, and gasoline engines are easy to use and suited for a large number of machines.
By contrast, steam engines are much weaker, require you to either have nether access or build a cooling fin (which you really should have mentioned) unless you fancy a violent explosion, require an extra dc engine + pump + plumbing for hands-off operation, cannot be throttled, cannot be redstone controlled, and make a far more aggravating sound (that in contrast to other engines cannot be muffled)
I'm using gasoline engines all over the place, often on ECUs. My base currently has one gas turbine (intermittently producing RF for a Buildcraft refinery, a Forestry ethanol production line and a small AE system), one fuel powered engine (running the extractor), one dc engine (running a pump), andfourfive gasoline engines (running grinder, friction heated furnace, fuel enhancer, liquid distillery + liquid crystallizer, Buildcraft oil pump). Currently pondering a set of 4 gasoline engines for a boring machine, which may or may not be fast enough for my humble needs once properly enchanted. I'll be finding that out once I try it.
But all that stuff is very doable and using steam engines efficiently requires a piece of netherack where as the other options are using lava and cooling fins or sitting there with a flint and steel lighting logs on fire.
