Originally Posted by turboost
The octane rating is higher but ethanol does not have as much BTUs as gasoline so it would take more ethanol to equal the performance of gasoline. Gasoline octane is obtained by blending in light ends like butane, butylene and sometimes toluene to raise it (used to be MTBE which was cheaper but EPA won't allow it anymore so there is some price increase there).
Yes, which explains why lower compression cars get less MPG on the newer fuels compared to about 10-20 years ago. Too much oxygenation of the gas...