Fuel economy

In theory, all fuel-driven vehicles have a fuel economy (measured as miles per US gallon, or liters per 100 km) that is directly proportional to the fuel's energy content. In reality, there are many other variables that come in to play that affect the performance of a particular fuel in a particular engine. Ethanol contains approx. 34% less energy per unit volume than gasoline, and therefore in theory, burning pure ethanol in a vehicle will result in a 34% reduction in miles per US gallon, given the same fuel economy, compared to burning pure gasoline. This assumes that the octane ratings of the fuels, and thus the engine's ability to extract energy from the fuels, are the same. For E10 (10% ethanol and 90% gasoline), the effect is small (~3%) when compared to conventional gasoline, and even smaller (1-2%) when compared to oxygenated and reformulated blends. However, for E85 (85% ethanol), the effect becomes significant. E85 will produce lower mileage than gasoline, and will require more frequent refueling. Actual performance may vary depending on the vehicle. The EPA-rated mileage of current USA flex-fuel vehicles should be considered when making price comparisons, but it must be noted that E85 is a high performance fuel, with an octane rating of about 104, and should be compared to premium. In one estimate the US retail price for E85 ethanol is 2.62 US dollar per gallon or 3.71 dollar corrected for energy equivalency compared to a gallon of gasoline priced at 3.03 dollar. Brazilian cane ethanol (100%)is priced at 3.88 dollar against 4.91 dollar for E25 (figures July 2007).

(from wikipedia)